Westlake Chemical Partners Renews Ethylene Sales Agreement Through 2027
Westlake Chemical Partners LP (NYSE: WLKP), the master limited partnership formed by Westlake Corporation to operate and acquire ethylene production assets, announced that it has renewed its long-term Ethylene Sales Agreement with Westlake Chemical OpCo LP (“OpCo”) and Westlake Corporation (“Westlake”). The renewed contract extends the existing arrangement through December 31, 2027, and ensures continued stability in production offtake, pricing, and cash flow for the Partnership.
Under the terms of the renewal, the Ethylene Sales Agreement will continue through the end of 2026 and automatically renew for successive 12-month periods unless terminated at the end of the initial term or any subsequent renewal term with not less than 12 months’ notice. This renewal secures OpCo’s sale of approximately 95% of its ethylene production to Westlake on the same pricing and volume terms that have underpinned the Partnership’s consistent financial performance since its initial public offering in 2014.
Ethylene, a key building block for a wide range of chemical products such as polyethylene and PVC, is a cornerstone of Westlake’s operations. The renewal of this agreement ensures the continued integration of ethylene supply between the production assets held by the Partnership and Westlake’s downstream manufacturing operations.
According to the company, the extension maintains the same pricing formula and sales volume protections that have historically supported Westlake Chemical Partners’ strong distributable cash flow generation. Since going public in 2014, the Partnership has declared 45 consecutive quarterly cash distributions to unitholders, with no decreases. This steady payout history is a central part of the Partnership’s appeal to income-focused investors.
The renewal of the Ethylene Sales Agreement reflects the long-standing and mutually beneficial relationship between Westlake Chemical Partners, OpCo, and Westlake Corporation,” a company spokesperson said. “It provides continued visibility into future cash flows and reinforces our confidence in the Partnership’s ability to maintain stable distributions and pursue long-term value creation for unitholders.
The renewed contract continues to provide Westlake with a reliable source of ethylene to support its downstream operations, while ensuring that the Partnership maintains an offtake arrangement for nearly all of its production capacity at predictable and transparent terms. Ethylene pricing under the agreement is based on a formula that reflects the cost of feedstock and energy inputs, as well as a fixed margin component that provides OpCo with steady returns regardless of market volatility.
In connection with the renewal of the Ethylene Sales Agreement, OpCo and certain affiliates of Westlake have also amended the Services and Secondment Agreement. This amendment aligns the term of the Services and Secondment Agreement with that of the renewed Ethylene Sales Agreement, ensuring that both contracts remain consistent in duration and scope.
The Services and Secondment Agreement governs the sharing of personnel, administrative services, and operational support between Westlake and OpCo. By synchronizing the terms of these agreements, the parties aim to simplify contract management and maintain continuity of services essential to plant operations and production efficiency.
Additionally, Westlake Chemical Partners, OpCo, and certain affiliates of Westlake have entered into an amendment to the Omnibus Agreement, another foundational contract that outlines various operational and financial arrangements between the entities. The amendment specifies that the Omnibus Agreement will terminate automatically upon the termination of the Ethylene Sales Agreement. This change ensures that the core agreements governing the relationship between Westlake and the Partnership remain aligned and terminate concurrently, reducing the potential for contractual discrepancies or overlaps.
The amendment to the Omnibus Agreement also addresses certain procedural and administrative requirements related to Westlake’s obligation to indemnify the Partnership. These indemnifications cover a range of matters, including environmental, tax, and other liabilities, providing an additional layer of financial protection for the Partnership and its investors.
Industry analysts view the renewal as a sign of continued operational stability and confidence in Westlake Chemical Partners’ business model. The partnership’s structure — which centers on long-term, fee-based contracts — insulates it from the cyclical volatility often seen in commodity chemicals markets. With its predictable cash flows, WLKP has maintained one of the most consistent distribution records in the midstream and chemicals MLP space.
The ethylene market has faced varying dynamics over the past several years, influenced by shifts in global demand, feedstock costs, and energy price fluctuations. However, Westlake’s vertically integrated structure allows it to manage these market pressures effectively by balancing its production and downstream consumption of ethylene. The renewal of this agreement reinforces that integrated strategy, ensuring that Westlake’s chemical plants continue to receive reliable feedstock while the Partnership enjoys steady revenues.
Chemical For investors, the announcement underscores WLKP’s ongoing commitment to capital stability and sustainable returns. The Partnership’s business model — built around long-term contracts with its sponsor, Westlake — continues to provide visibility into future earnings and distributions. Analysts note that the unchanged pricing formula, coupled with volume protections, supports predictable distributable cash flow even in uncertain market conditions.
Westlake Chemical Partners operates primarily through its ownership of interests in Westlake Chemical OpCo LP, which owns and operates three ethylene production facilities located in Lake Charles, Louisiana, and Calvert City, Kentucky. Together, these facilities have an annual capacity of approximately 3.7 billion pounds of ethylene.
Westlake Corporation, the parent company, is a global manufacturer and supplier of materials and products used in construction, packaging, and consumer goods. Its vertically integrated operations span from ethylene and polyethylene production to building products and PVC-based materials.
As of the announcement date, Westlake Chemical Partners’ distribution policy and financial guidance remain unchanged. The Partnership continues to target stable and sustainable distributions, supported by its long-term contractual relationships and efficient operating model.
With this renewal, Westlake Chemical Partners and Westlake Corporation reaffirm their long-standing strategic alignment, positioning both entities for continued operational and financial stability through at least 2027.
About Westlake Chemical Partners LP
Westlake Chemical Partners is a limited partnership formed by Westlake Corporation to operate, acquire and develop ethylene production facilities and other qualified assets. Headquartered in Houston, the Partnership owns a 22.8% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP’s assets consist of three ethylene production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana, and an ethylene pipeline. For more information about Westlake Chemical Partners LP, please visit http://www.wlkpartners.com.
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