Alyeschem Plans Methanol Plant Near Prudhoe Bay, Cutting Costs

Alyeschem, a private equity backed chemical company, revealed plans on November 21 to construct a small methanol production facility on Alaska's North Slope near Prudhoe Bay. The company said the facility will cost about $150 million and will use local natural gas and water to produce methanol and a coproduct stream of ultralow sulfur diesel. The project is targeted to begin operations by 2027 according to Wall Street Journal reporting.

The announcement included a supply and purchase partnership with ConocoPhillips, under which ConocoPhillips will provide feedstock and commit to buying product from the plant. The Alaska Industrial Development and Export Authority has committed up to $70 million in financing for the project. Alyeschem plans to use surplus hydrogen from methanol production to upgrade diesel, creating an integrated process that captures multiple value streams from local resources.

For North Slope Borough residents and operators, the immediate impact is likely to be logistical and financial. Local oil and gas operations currently import methanol from distant suppliers for hydrate inhibition and corrosion control. Producing methanol on the slope can reduce shipping costs, shorten supply lines, and lower exposure to winter transport delays and global freight volatility. The plant also promises local jobs and contracting opportunities during construction and operation, and the use of regional natural gas can anchor additional value added activity in the borough.

From a market and policy perspective, the deal highlights state and private cooperation to keep more energy sector value on the North Slope. AIDEA financing of up to $70 million shows public willingness to support downstream processing to reduce dependence on imports. The use of low sulfur and ultralow sulfur diesel coproducts aligns with regulatory pressure to limit sulfur emissions in on site equipment and marine support fleets, although specific environmental approvals and permitting will shape project timing.

Looking ahead, the project could signal a modest shift toward localized petrochemical manufacturing on the slope, providing more resilient supply for critical field chemicals. With a 2027 target start, the next year will focus on permitting, final investment decisions, and construction planning that will determine how quickly the North Slope begins to realize the operational and economic benefits described in the announcement.