If Alaska petrochemical facility can be built, Williams believes it is company that can do it

Kristen Nelson

PNA Editor-in-Chief

If an Alaska petrochemical facility can be built, Williams believes it is the only company that can build it. Cavan Carlton, director of Williams Arctic Project, told the Governor’s Alaska Highway Gasline Policy Council Sept. 25 that the company believes its refinery and land in North Pole, its connection with the Alaska Railroad and its facilities at the Port of Anchorage — combined with its experience — give it a lock on building an Alaska petrochemical facility.

If such a facility is found to be commercial.

Williams began the study of the whether an Alaska petrochemical plant would be economic in May, after several months of internal analysis, and expects to reach a conclusion by November.

Williams is testing a hypothesis, Carlton said: that a petrochemical business in Alaska can work and preliminary results are encouraging. Williams has hired CMAI, one of the world’s leading petrochemical consulting firms, to assist with the analysis.

The project includes: a gas processing facility near North Pole to extract methane for local use, extract ethane and possibly propane and re-inject the unused gas and gas liquids. An ethane cracker would to convert ethane into ethylene and a polyethylene plant to convert ethylene into polyethylene. Some 2 million tons a year of polyethylene, in the form of pellets, would be shipped to Anchorage by rail and from Anchorage to global markets.

Carlton said Williams has additional acreage near its North Pole refinery that potentially could be used for a petrochemical facility and is in discussions with the Alaska Railroad about shipping the pellets. Williams currently accounts for 60 percent of shipping on the railroad, he said.

Just getting the gas out of the pipeline and re-injecting after natural gas liquids are removed will be expensive — requiring de-pressurizing, dealing with liquids which fall out and re-pressurizing for re-injection, Carlton said. And because there is no source in the Fairbanks area from which Williams could purchase “make-up gas” to replace the volume not re-injected, the company would have to make up in value for what it took out.

The plant would cost more to build in Alaska than elsewhere, Carlton said, although having the gas coming close to the plant in a pipeline would be a benefit.

If a petrochemical plant were built in the Fairbanks area it could mean 350 full time jobs and a potential payroll of $18 million a year and $15 million paid to the Alaska Railroad for transportation, Carlton said. And methane produced when NGLs are stripped out could potentially be used in the Fairbanks area.

There are about 60,000 barrels per day of NGLs in the trans-Alaska oil pipeline today, Carlton said, and a finite amount of NGLs are available. They will go wherever the higher value can be realized, he said. If a petrochemical facility isn’t built in Alaska NGLs would go to feed the existing petrochemical business in Alberta.