Westlake Chemical on Tuesday filed for an initial public offering to spin off its $2.1 billion ethylene production business. The assets of the new business, to be named Westlake Chemical Partners, will include Westlake’s two ethylene production units in Lake Charles, La., and one in Calvert City, Ky., and a 200-mile ethylene pipeline from Mont Belvieu to Longview, Texas. Westlake said in a document filed with the SEC it would upgrade production capacity at one of the Lake Charles units by 250 million pounds in late 2015 or early 2016. The three units in Louisiana and Kentucky currently produce 3.4 billion pounds of ethylene per year.
Per a sales agreement between the two firms, Westlake will buy 95% of the ethylene produced annually by the new company through the end of 2026.
