Alyeschem breaks ground on first Arctic petrochemical plant in Prudhoe Bay

Alyeschem LLC and the Alaska Industrial Development and Export Authority broke ground on May 15 on a Prudhoe Bay site that could change how North Slope operators get the chemicals and fuels they use every day. Built on an existing AIDEA-developed gravel pad, the project is being billed as the first petrochemical facility in the U.S. Arctic and the first industrial manufacturing plant on the North Slope.

The practical question for Prudhoe Bay is not the ceremony itself, but whether the plant makes operations cheaper and more reliable. Alyeschem and AIDEA say the facility will manufacture methanol, ultra-low sulfur diesel and hydrogen from North Slope natural gas and captured carbon dioxide. Methanol is a key field input used to help prevent corrosion, protect gas-compression equipment and keep wells and pipelines from freezing when they are shut in. If Alyeschem can supply it locally, operators may be able to avoid importing methanol by ship and truck from outside Alaska.

That matters in a place where logistics drive cost. AIDEA says the project should remove about 4,000 trucks from the Dalton Highway and support supply chains tied to the Trans-Alaska Pipeline System. The authority says the plant is expected to produce about 32,000 gallons of methanol and 63,000 gallons of diesel a day once running, with startup targeted for 2027.

The economic case reaches beyond fuel supply. AIDEA says the project should create about 150 construction jobs and 15 to 20 full-time operating positions, along with more than $5 million a year in tax and royalty revenue for the state and boroughs. The authority also says it expects at least $2.39 million a year from loan repayment and royalties. For North Slope Borough, the lasting question is how many of those jobs, contracts and revenue streams remain after construction is finished.

The project’s path to a groundbreaking has been years in the making. AIDEA first signed a cost-reimbursement agreement for feasibility work on Dec. 11, 2023. Its board unanimously approved a $70 million financing resolution on May 16, 2024, then AIDEA and Alyeschem signed another cost-reimbursement agreement and loan promissory note in February 2025. By July 9, 2025, AIDEA had executed loan agreements for up to $70 million.

ConocoPhillips Alaska, which describes Prudhoe Bay as the largest conventional oil field in North America, has been identified as both a supplier and a buyer in the project, providing gas and carbon dioxide while purchasing methanol and diesel. If the plant performs as promised, it could give the North Slope a new industrial anchor built around resources already in the field.