The Alaska Industrial Development and Export Authority Board of Directors an investment through financing construction and long-term operation of a pioneering chemical and fuels plant on the North Slope.
The Alyeschem facility will establish local production of chemicals (methanol) and fuels like ultra-low-sulfur diesel (ULSD), considered an important step to get more value from Alaska’s raw resources within the state, AIDEA said.
Methanol is used on the North Slope to help avoid pipeline corrosion, preserve the functionality of gas compression equipment, and prevent freezing in temporarily shut-in wells and pipelines. Ultra-low-sulphur diesel is also used in several ways as a fuel on the North Slope. The new plantwill use Alaska’s natural gas as a feedstock resource, creating an important internal market for North Slope stranded natural gas resources.
Local production from a new plant on the North Slope using Alaska gas could eventually eliminate the need to import methanol into Alaska using overseas shipping and trucking on the Dalton Highway. Local methanol production may even benefit the State of Alaska with cost savings to the TAPS tariff, creation of jobs, and generation of corporate and other tax revenues, including property taxes for the North Slope Borough, said AIDEA in a press release, adding that the project will also create new jobs.
Alyeschem estimates the plant’s operations will reduce carbon dioxide emissions by 93%, or 45,000 tons annually, by transforming a blend of natural gas and waste CO2 into methanol-reducing emissions associated with current supply methods on the North Slope.
The “up to” $70 million maximum loan financing will support construction by matching a similar investment from private equity investors, AIDEA said. After construction, the financing structure will provide AIDEA with loan payments of principal and interest while also providing AIDEA with a permanent royalty-based on a per-gallon output basis. This is expected to generate a minimum of $2.39 million annually in income and would increase as output increases.
AIDEA is Alaska’s economic development engine, working with private sector, lenders, and other entities to create a private-sector economy in Alaska.
