Westlake Chemical announce results and ethylene expansion
Published by Francesca Brindle,
Editorial Assistant
Hydrocarbon Engineering,
Westlake Chemical Partners LP (the partnership) has reported net income attributable to the partnership of US$9.8 million, or US$0.35 per limited partner unit, for the three months ended 31 March 2017, a decrease of US$2.3 million compared to 1Q16 net income attributable to the partnership of US$12.1 million. The decrease in net income attributable to the partnership as compared to the prior-year period was due to certain reimbursements from Westlake Chemical Corporation (Westlake) under the sales agreement between Westlake Chemical OpCo LP (OpCo) and Westlake that were recorded in the 1Q16. Cash flow from operations in the 1Q17 was US$149.1 million, an increase of US$36.5 million compared to 1Q16 cash flow from operations of US$112.6 million. This increase in cash flow from operations was primarily due to a decrease in working capital. For the three months ended 31 March 2017, MLP distributable cash flow was US$11.4 million, an increase of US$1.9 million compared to 1Q16 MLP distributable cash flow of US$9.5 million.
The increase in MLP distributable cash flow as compared to the prior-year period was due to higher production volumes at OpCo’s Petro 1 facility following the 250 million lb ethylene expansion completed in July 2016 and lower maintenance capital expenditures, offset by lower production volumes at OpCo’s Calvert City, Kentucky facility as it began its turnaround and expansion project.
The 1Q17 net income attributable to the partnership of US$9.8 million, or US$0.35 per limited partner unit, decreased by US$1.1 million from 4Q16 net income attributable to the partnership of US$10.9 million. This decrease in net income was due to lower production volumes primarily related to the planned outage at OpCo’s Calvert City facility to complete the expansion and turnaround project. 1Q17 cash flow from operations of US$149.1 million increased by US$38.7 million compared to 4Q16 cash flow from operations of US$110.4 million. This increase in cash flow from operations was primarily due to a decrease in working capital offset by an increase in turnaround activity due to the turnaround and expansion at OpCo’s Calvert City facility. 1Q17 MLP distributable cash flow of US$11.4 million decreased by US$0.4 million compared to 4Q16 MLP distributable cash flow of US$11.8 million.
OpCo's sales agreement with Westlake is designed to provide for stable and predictable cash flows. The sales agreement provides that 95% of OpCo's ethylene production is sold to Westlake for a cash margin of US$0.10/lb, net of operating costs, maintenance capital expenditures and reserves for future turnaround expenditures.
"We are pleased to announce the recent completion of the turnaround and expansion of OpCo’s Calvert City facility, which along with other initiatives, adds 100 million lbs of ethylene capacity," said Albert Chao, President and Chief Executive Officer. "This expansion, in addition to the 250 million lb ethylene expansion at our Petro 1 facility completed in July 2016, helps in continuing our path of increasing our distributions at a low-double-digit growth rate for our unitholders."
Read the article online at: https://www.hydrocarbonengineering.com/refining/03052017/westlake-chemical-announce-results-and-ethylene-expansion/
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