Westlake Chemical Partners LP (WLKP): Business Model Canvas [Dec-2025 Updated]

You're looking to understand the engine behind Westlake Chemical Partners LP, and honestly, it's a textbook example of a stable, fee-based Master Limited Partnership, or MLP. The whole operation hinges on one massive, captive customer relationship: a long-term Ethylene Sales Agreement with Westlake Corporation that guarantees a fixed cash margin of $0.10 per pound. This predictable setup generated $1.13 billion in revenue over the last twelve months ending Q3 2025, directly supporting the $0.4714 per unit quarterly distribution declared for Q3 2025. If you need a clear blueprint for generating reliable MLP cash flow, check out the full Business Model Canvas below; it shows exactly how they manage those three production facilities and that critical pipeline.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Key Partnerships

Westlake Corporation (WLK) as the parent company and general partner

• Westlake Corporation (WLK) formed Westlake Chemical Partners LP (WLKP) to operate, acquire, and develop ethylene production facilities and other qualified assets.
• Westlake Chemical Partners GP LLC, the general partner of Westlake Chemical Partners LP, declared a second quarter 2025 distribution of $0.4714 per unit, payable August 27, 2025.
• Westlake Chemical Partners LP reported net income attributable to the Partnership of $14.6 million for the second quarter of 2025.

Westlake Chemical OpCo LP (OpCo) as the operating entity

Westlake Chemical Partners LP owns a 22.8% interest in Westlake Chemical OpCo LP. The operational assets are held within OpCo.

Suppliers of natural gas liquids (ethane and propane) feedstock

• OpCo has a Feedstock Supply Agreement with Westlake Petrochemicals LLC, a Westlake Corporation subsidiary.
• The agreement supplies OpCo with ethane and other feedstocks required for ethylene production.
• OpCo primarily uses ethane as feedstock for its Lake Charles Olefins (Petro 1 and Petro 2).
• Calvert City Olefins can use propane as a feedstock.
• Petro 2 can use an ethane/propane mix, propane, butane, or naphtha.

Financial institutions for $400 million in long-term debt financing

The consolidated long-term debt at the end of the second quarter of 2025 was $400 million. The specific financial institutions involved in this current debt structure are not detailed, but the allocation of this total is known.

• Consolidated Long-Term Debt (End Q2 2025): $400 million
• Long-Term Debt at Westlake Chemical Partners LP (End Q2 2025): $377 million
• Long-Term Debt at OpCo (End Q2 2025): $23 million

The Ethylene Sales Agreement with Westlake Corporation covers 95% of OpCo's planned production, providing a fixed margin of $0.10 per pound, net of operating costs and capital expenditures.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Key Activities

You're looking at the core engine room of Westlake Chemical Partners LP, which is all about making and moving ethylene under a very specific contract structure. The key activities revolve around operating the physical assets, managing the critical sales contract, handling necessary downtime, and paying out the resulting cash.

Operating three large-scale ethylene production facilities and managing the 200-mile ethylene pipeline system are the physical backbone. Westlake Chemical OpCo LP's assets, in which Westlake Chemical Partners LP owns a 22.8% interest, include the three facilities located in Calvert City, Kentucky, and Lake Charles, Louisiana, plus the pipeline. The combined annual production capacity is approximately 3.7 billion pounds. The pipeline itself is a 200-mile common carrier running from Mont Belvieu, Texas, to Longview, Texas.

The stability of the entire model hinges on executing the fixed-margin Ethylene Sales Agreement with Westlake Corporation. This agreement was recently renewed through December 31, 2027. This contract secures the offtake for 95% of OpCo's ethylene production. The pricing formula provides a fixed cash margin of $0.10 per pound, which is calculated net of operating costs, maintenance capital expenditures, and reserves set aside for future turnarounds. This fee-based structure is designed to minimize exposure to volatile market swings.

A necessary, albeit disruptive, activity is conducting planned maintenance and turnarounds. The major event in 2025 was the Petro 1 turnaround at the Lake Charles, Louisiana facility. This routine maintenance started at the end of January 2025 and idled the unit for over two months. The impact was immediate: First quarter 2025 distributable cash flow (DCF) fell to $4.7 million, a 73% drop year-over-year, and net income attributable to the Partnership was only $4.9 million. The turnaround costs reduced Q2 cash flow by $112.8 million compared to Q2 2024. However, the successful completion in the second quarter positioned the Partnership for a rebound, with Q2 2025 net income hitting $14.6 million (or $0.41 per unit) and DCF reaching $15.0 million. Management noted that no further turnarounds are scheduled through 2026.

Finally, the ultimate purpose of these operational activities is distributing quarterly cash to unitholders. Westlake Chemical Partners LP has maintained a consistent payout history, making 45 consecutive quarterly distributions since its 2014 IPO without any decreases. The most recent declared distribution for the third quarter 2025 was $0.471 per unit, payable on November 26, 2025. This distribution level represents a trailing twelve-month yield around 9.96% as of late 2025.

Here's a quick look at the key operational and financial data points supporting these activities:

The Partnership's resilience is definitely tied to that fixed-margin contract; it helps smooth out the bumps from planned downtime like the Petro 1 event. The fact that they have no further turnarounds planned through 2026 is a key operational advantage for the near term.

• Convert ethane into ethylene at three sites.
• Transport ethylene via a 200-mile pipeline system.
• Secure revenue for 95% of output via contract.
• Manage maintenance capital expenditures for asset upkeep.
• Declare distributions every quarter, hitting 45 consecutive payments.

The agreement extension to December 31, 2027, secures the cash flow structure that supported the $0.471 per unit distribution in Q3 2025. Finance: draft 13-week cash view by Friday.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Key Resources

The Key Resources for Westlake Chemical Partners LP center on its ownership stake in the operating partnership, OpCo, and the physical assets it controls through that interest. These resources are the foundation for its revenue generation via long-term contracts.

The Partnership's primary tangible assets are the three ethylene production facilities. These facilities are strategically located to serve key industrial markets.

The contractual arrangements tied to these physical assets are critical, providing stability against commodity price swings. The structure of the Ethylene Sales Agreement dictates the off-take of the produced material.

• Long-term Ethylene Sales Agreement with Westlake Corporation renewed through December 31, 2027.
• The agreement secures the offtake of 95% of OpCo's ethylene production.
• The agreement includes a fixed margin per pound, net of specified costs, providing predictable cash flows.

You should note that the Partnership's direct financial resources are supplemented by its ownership structure, which grants it a claim on the earnings and cash flows generated by the entire OpCo asset base.

The operational stability is further evidenced by the commitment to distributions, having declared the 44th consecutive quarterly distribution for the second quarter of 2025, at $0.4714 per unit.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Value Propositions

Predictable, stable cash flow for unitholders via a fee-based model

You're looking at a structure designed to smooth out the bumps of the commodity cycle. The core value here is the stability of the cash distributions, which Westlake Chemical Partners LP has maintained without a decrease for 45 consecutive quarters since its 2014 Initial Public Offering. This predictability is anchored by the fee-based nature of the primary revenue source. For the third quarter of 2025, the distributable cash flow provided a trailing twelve-month coverage ratio of 0.75x the declared distributions, which management attributed to the timing of maintenance capital expenditures. Still, the cumulative coverage ratio since the IPO remains at approximately 1.05x.

• 45 consecutive quarterly distributions maintained since IPO.
• Q2 2025 quarterly distribution declared at $0.4714 per common unit.
• Q3 2025 net income attributable to the Partnership was $14.7 million.
• Net Income Per Limited Partner Unit (Basic and Diluted) for Q3 2025 was $0.42.

Guaranteed supply of 95% of ethylene production to Westlake Corporation

The partnership has locked in the offtake for the vast majority of its output through a renewed agreement. This agreement extends through December 31, 2027, securing the sales channel for the core product. This contractual arrangement is the mechanism that delivers the stable cash flows you are interested in. For the nine months ended September 30, 2025, sales to Westlake Corporation represented approximately 87.3% of Westlake Chemical Partners LP's total net sales.

Fixed cash margin of $0.10 per pound on ethylene sales

This is the key insulation layer against volatile market pricing for ethylene. The Ethylene Sales Agreement specifies that 95% of the production sold to Westlake Corporation carries a fixed cash margin of $0.10 per pound. This margin is calculated net of specified items, including operating costs, maintenance capital expenditures, and reserves set aside for future turnaround expenditures. This fixed component is what allows the business model to demonstrate resilience even when broader chemical market conditions soften, as noted by management regarding soft global industrial activity in 2025.

Here's a quick look at the Q3 2025 performance metrics that flow from this structure:

Reliable, high-volume production of a key petrochemical building block

Westlake Chemical Partners LP owns a 22.8% interest in Westlake Chemical OpCo LP, which operates the production assets. These assets include three ethylene production facilities located across Calvert City, Kentucky, and Lake Charles, Louisiana, along with an ethylene pipeline. The Q2 2025 results showed the benefit of completing the planned Petro 1 turnaround in Lake Charles, which had previously impacted production volume. For instance, Q3 2025 Total Net Sales of $308.9 million represented an increase of 11.5% from Q3 2024, primarily driven by higher ethylene sales volumes to Westlake.

• Facilities located in Calvert City, Kentucky, and Lake Charles, Louisiana.
• Ownership stake in OpCo is 22.8%.
• Q3 2025 Total Net Sales increased 11.5% year-over-year.
• No further turnarounds were noted as planned for the remainder of 2025 or in 2026.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Customer Relationships

The Customer Relationships for Westlake Chemical Partners LP (WLKP) are bifurcated, involving a deeply integrated, long-term relationship with its parent, Westlake Corporation, and a purely transactional relationship with its public unitholders.

Highly integrated, long-term contractual relationship with Westlake Corporation

Westlake Chemical Partners LP is fundamentally tied to Westlake Corporation, which formed the Partnership in 2014 to operate, acquire, and develop ethylene production facilities and related assets. This integration is quantified by ownership structure and financial agreements. Westlake Chemical Partners LP owns a 22.8% limited partner interest in Westlake Chemical OpCo LP, while Westlake Corporation retains the remaining 77.2% limited partner interest in OpCo and a significant interest in WLKP itself. The stability of the Partnership's cash flows is explicitly linked to the Ethylene Sales Agreement with Westlake Corporation, which is designed to provide stable and predictable cash flows by minimizing market volatility and production risk.

The financial interdependence is evident in cash management practices. As of the end of the second quarter of 2025, WLKP had consolidated cash balance and cash investments with Westlake through an investment management agreement totaling $81 million. This figure was reported as $51 million at the end of the third quarter of 2025.

Here are the key structural relationships as of 2025:

This relationship is deep; it's not just a supplier-customer dynamic.

Dedicated account management and operational alignment with the parent

Operational alignment is managed through the structure where Westlake Corporation formed WLKP to operate specific assets, including three ethylene production facilities and an ethylene pipeline. The management of WLKP is handled by Westlake Chemical Partners GP LLC, the general partner. Financial reporting and communication are channeled through Westlake Corporation's Investor Relations contacts for both media and investor inquiries. For instance, the Q2 2025 distribution announcement directed both Media Inquiries and Investor Inquiries to Westlake Corp. contacts.

The operational alignment dictates cash flow predictability, as the Ethylene Sales Agreement with Westlake is specifically noted to minimize market volatility for WLKP. The Partnership's distributable cash flow for the third quarter of 2025 was $14.9 million, a decrease of $3.0 million compared to the third quarter of 2024, partially attributed to higher maintenance capital expenditures resulting from changes in the timing of maintenance activities in 2025.

Transactional relationship with public unitholders (investors)

The relationship with public unitholders is primarily transactional, centered on the consistent declaration and payment of quarterly distributions. Westlake Chemical Partners LP has a track record of 44 consecutive quarterly distributions announced since its Initial Public Offering in July 2014, as of the Q2 2025 announcement. The distribution amount declared for both the first quarter of 2025 and the second quarter of 2025 was $0.4714 per unit. The third quarter of 2025 also saw a distribution of $0.4714 per common unit. Distributions have increased by 71% since the Partnership's original minimum quarterly distribution of $0.275 per unit. The Partnership's distributable cash flow provided trailing twelve-month coverage of 0.75x the declared distributions for the third quarter of 2025. Since the IPO, the cumulative coverage ratio stands at approximately 1.05x.

You can see the consistency in the distribution schedule:

• Q1 2025 Distribution Declared: $0.4714 per unit
• Q2 2025 Distribution Declared: $0.4714 per unit
• Q3 2025 Distribution Declared: $0.4714 per unit
• Total Consecutive Distributions: 45 (as of Q3 2025 announcement)
• Distribution Growth Since IPO: 71%

For tax purposes, brokers and nominees must treat 100.0% of the Partnership's distributions to non-U.S. investors as being attributable to income effectively connected with a United States trade or business, subjecting those distributions to federal income tax withholding.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Channels

You're looking at how Westlake Chemical Partners LP moves its product and communicates with its owners. It's a very focused set of channels, heavily tied to its relationship with Westlake Corporation.

Direct physical pipeline delivery of ethylene to Westlake Corporation facilities

The primary channel for Westlake Chemical Partners LP's main product is physical infrastructure. Westlake Chemical OpCo LP's assets include an ethylene pipeline, which connects its production facilities in Calvert City, Kentucky, and Lake Charles, Louisiana, directly to Westlake Corporation facilities. This is governed by the Ethylene Sales Agreement. This agreement dictates that 95% of OpCo's ethylene production is sold directly to Westlake.

The financial structure of this channel is based on a set cash margin. The sale price is set for a cash margin of $0.10 per pound, calculated net of operating costs, maintenance capital expenditures, and reserves for future turnaround expenditures. This arrangement is designed to provide stable and predictable cash flows, which directly support the partnership's distributions. For the nine months ended September 30, 2025, sales to Westlake represented approximately 87.3% of Westlake Chemical Partners LP's total net sales.

Investor Relations website and SEC filings for unitholder communication

Communication with unitholders relies on standard regulatory and digital channels. The Investor Relations website, found at http://www.wlkpartners.com, serves as the central hub for official documentation. For instance, the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, was filed with the Securities and Exchange Commission on March 5, 2025, and made available on the site. Unitholders can request a hard copy of this report, including audited financial statements, free of charge.

Key financial updates are disseminated through press releases, which are then archived on the site. For example, the third quarter 2025 results were announced via press release on October 28, 2025, followed by an earnings conference call scheduled for October 30th, 2025. This digital channel ensures compliance and broad access to required disclosures.

Quarterly distribution payments to unitholders

The final, and perhaps most critical, channel for returning capital to investors is the direct distribution payment process. Westlake Chemical Partners LP has maintained a consistent quarterly payment schedule. This was the 45th consecutive quarterly distribution announced since the initial public offering in July 2014.

Here are the specific per-unit distribution amounts declared for the first three quarters of 2025:

• Q1 2025 Distribution: $0.4714 per unit, paid May 29, 2025.
• Q2 2025 Distribution: $0.4714 per unit, paid August 27, 2025.
• Q3 2025 Distribution: $0.4714 per unit, paid November 26, 2025.

The annualized distribution based on these figures would total $1.8856 per unit ($0.4714 multiplied by four). One source reports the current annual dividend as $1.89 per share, with a yield of 9.92% as of late October 2025. The partnership treats 100.0% of these distributions to non-U.S. investors as subject to federal income tax withholding.

The history of these payments channels the partnership's operational success directly to the unitholders. Here's a look at the 2025 distribution schedule:

The distributable cash flow for the third quarter of 2025 was $14.9 million, or $0.42 per unit, which covered the declared distribution for that period. Finance: draft 13-week cash view by Friday.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Customer Segments

Westlake Corporation (WLK) as the primary, captive customer

Westlake Chemical Partners LP is fundamentally structured around its relationship with its parent, Westlake Corporation. Westlake Chemical Partners LP was formed by Westlake Corporation to operate, acquire, and develop ethylene production facilities and other qualified assets. This relationship is formalized through a long-term supply agreement, which is key to the Partnership's predictable cash flows and stable foundation for unitholder distributions.

Westlake Chemical Partners LP holds a 22.8% interest in Westlake Chemical OpCo LP. OpCo's assets are the core revenue drivers, including three ethylene production facilities located in Calvert City, Kentucky, and Lake Charles, Louisiana, along with a 200-mile ethylene pipeline. The total annual capacity of these facilities is approximately 3.7 billion pounds of ethylene.

Here's a look at the structure that defines this primary customer relationship:

The stability of this fixed-margin ethylene sales agreement with Westlake Corporation minimizes market volatility for Westlake Chemical Partners LP.

Institutional and individual investors seeking stable MLP distributions

The second major segment is the unitholder base, attracted by the Master Limited Partnership (MLP) structure's focus on consistent cash returns. Westlake Chemical Partners LP has maintained stable quarterly cash distributions since its Initial Public Offering in July 2014. The Partnership has made 44 consecutive quarterly distributions as of Q2 2025.

You can see the commitment to this segment in the recent payout history:

• Quarterly Distribution (Q3 2025): $0.4714 per common unit.
• Last Ex-Dividend Date: November 10, 2025.
• TTM Dividend Payout (as of Dec 04, 2025): $1.89 per share.
• Annual Dividend Yield (as of Dec 04, 2025): 9.92%.
• Distribution Growth since IPO: 71% from the original minimum quarterly distribution of $0.275 per unit.

The current payout ratio sits at 135% of earnings, while the share price as of November 26, 2025, was $19.06/share. The institutional ownership base is significant, with 72 total institutional owners filing reports, holding 17,809,277 shares.

Downstream chemical manufacturers (indirectly, via WLK's derivatives)

While the primary customer is the parent, Westlake Chemical Partners LP's product-ethylene-is the fundamental building block for plastics and industrial chemicals, meaning downstream manufacturers are the ultimate end-users of the product stream flowing through Westlake Corporation. The financial results show that not all ethylene is captive; there are third-party sales. For instance, the Third Quarter 2025 net income was lower than Q3 2024 partially due to lower margins on sales of ethylene to third parties.

The overall scale of the business, which serves this broader market indirectly, is reflected in the revenue estimates:

• Full Year 2025 Revenue Estimate: $1.21 billion.
• Third Quarter 2025 Actual Revenue: $276.54 million.

The business model's fee-based structure is designed to insulate Westlake Chemical Partners LP from the commodity price volatility that directly impacts these downstream chemical manufacturers.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Cost Structure

You're looking at the cost side of Westlake Chemical Partners LP's business, which is heavily influenced by its fee-based structure with the parent company, Westlake Corporation. The costs are primarily driven by the operations of the three ethylene production facilities that Westlake Chemical OpCo LP (OpCo) owns, which Westlake Chemical Partners LP holds a 22.8% interest in.

The structure of the ethylene sales agreement dictates that 95% of OpCo's production is sold to Westlake for a fixed cash margin, net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures. This means that many of the direct costs of production are passed through or accounted for before the margin is realized by Westlake Chemical Partners LP.

Here are the latest reported figures for key cost components from the 2025 reporting periods.

Maintenance capital expenditures were definitely a cost factor impacting cash flow in the first half of 2025. The planned turnaround at the Petro 1 ethylene unit in Lake Charles, Louisiana, was the main driver for these higher maintenance CapEx figures.

• The decrease in MLP distributable cash flow for Q1 2025 compared to Q4 2024 was attributed to lower volume and higher maintenance capital expenditures due to the Petro 1 turnaround.
• Distributable cash flow for Q2 2025 compared to Q2 2024 also decreased primarily due to higher maintenance capital expenditures related to the Petro 1 turnaround.
• Similarly, the decrease in Q3 2025 distributable cash flow versus Q3 2024 was due to higher maintenance capital expenditures from timing changes in 2025 maintenance activities.

Regarding the debt structure, Westlake Chemical Partners LP maintained its long-term debt level at $400 million at the end of the third quarter of 2025. This debt is split, with $377 million at the Partnership level and $23 million at OpCo. Specific interest expense for Westlake Chemical Partners LP related to this $400 million debt for the 2025 periods isn't explicitly broken out in the provided data, but for context, Westlake Corporation expected its cash interest expense for the full year of 2025 to be approximately $160 million.

The general and administrative costs for the MLP structure, represented by Selling, General and Administrative Expenses, show a slight increase quarter-over-quarter for the periods reported:

• Q2 2025 SG&A was $6,300 thousand.
• Q3 2025 SG&A rose to $7,444 thousand.

To be fair, the Q3 2025 figure is higher than the Q2 figure, but both are below the full year 2024 SG&A of $28,495 thousand.

Westlake Chemical Partners LP (WLKP) - Canvas Business Model: Revenue Streams

The revenue streams for Westlake Chemical Partners LP are heavily anchored to its long-term contractual relationship with its parent, Westlake Corporation, providing a degree of revenue predictability.

The total revenue for the last twelve months ending Q3 2025 was reported at $1.13 billion.

The revenue generation for the third quarter of 2025 can be broken down by customer source, showing the reliance on the primary agreement:

A core element of the revenue stability comes from the Ethylene Sales Agreement (ESA) with Westlake Corporation, which was renewed through the end of 2027. This agreement dictates that 95% of OpCo's ethylene production is sold to Westlake for a specified $0.10/lb cash margin, net of operating costs, maintenance capital expenditures, and reserves for future turnaround expenditures.

Key financial performance and distribution metrics for the third quarter of 2025 include:

• Net income attributable to the Partnership of $14.7 million in Q3 2025.
• Quarterly distribution declared of $0.4714 per unit for Q3 2025.
• Distributable cash flow for the quarter was $15 million, or $0.42 per unit.
• The distribution marks the 45th consecutive quarterly payout to unitholders.