Westlake Carves Out Ethylene Operations

Westlake Chemical is carving out its ethylene operations as a tax-advantaged master limited partnership, or MLP. The new company, to be called Westlake Chemical Partners (WCP), has filed a prospectus with the Securities & Exchange Commission for an initial public offering of equity worth $272 million. WCP will control Westlake’s ethylene crackers in Lake Charles, La., and Calvert City, Ky., as well as a pipeline between Mont Belvieu and Longview, Texas. It will supply ethylene to Westlake’s polyvinyl chloride and polyethylene operations under contract. WCP would have had $1.2 billion in sales last year. The new firm says it will seek to acquire ethylene-related assets. Jefferies stock analyst Laurence Alexander says Westlake’s move could inspire other chemical firms to consider MLPs for some of their assets.