Eastman Eyes Petrochemical Sale

Confident that a pipeline dispute with Westlake Chemical is going in its favor, Eastman Chemical has resurrected plans to sell its excess ethylene capacity in Longview, Texas, as well as unnamed olefins derivative operations at the site. For several years, Eastman has been fighting with Westlake over the tariffs Westlake charges to use a pipeline leaving the Longview plant. Eastman sold its polyethylene business to Westlake in 2006 and since then has supplied that firm with ethylene. Eastman says Westlake’s fees prevent it from supplying the wider ethylene market. Following favorable rulings from the Texas Railroad Commission and an appeals court, Eastman has hired an investment bank to divest the ethylene capacity and other derivative operations. In a conference call with analysts, Chief Financial Officer Curt Espeland said the company will likely keep its largest ethylene cracker on the site but sell smaller units.