v3.26.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
Related Party Transactions Related Party Transactions
Related party transactions between the Partnership, OpCo and Westlake are primarily based on agreements such as the Ethylene Sales Agreement, the Feedstock Supply Agreement, the Services and Secondment Agreement, the Site Lease Agreements, the Omnibus Agreement, the Investment Management Agreement, the Exchange Agreement, the OpCo Partnership Agreement, the OpCo Revolver and the MLP Revolver. These agreements, discussed in detail in the Partnership's 2025 consolidated financial statements included in the 2025 Form 10-K filed on March 4, 2026, reflect the pervasive effect of the relationship with Westlake on the Partnership's operations and its consolidated financial statements. Pursuant to these agreements, the Partnership and OpCo regularly enter into transactions with Westlake. See below for descriptions and details of these related party transactions.
Sales to Related Parties
OpCo sells ethylene to Westlake under the Ethylene Sales Agreement. Additionally, the Partnership and OpCo from time to time provide other services or products for which they charge Westlake a fee.
OpCo sells a significant portion of its ethylene production to Westlake. Sales to related parties were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Net sales—Westlake$261,935 $276,539 $763,056 $736,396 
As of September 30, 2026, OpCo's production resulted in expected "excess quantities" of ethylene produced based on annual estimated production. Pursuant to the terms of the Ethylene Sales Agreement, the excess quantities produced by the Partnership were sold to Westlake at prices that excluded certain fixed costs of production. The fixed cost of production associated with the estimated excess quantities for the nine months ended September 30, 2026 was approximately $4,900.
Cost of Sales from Related Parties
Charges for goods and services purchased by the Partnership and OpCo from Westlake and included in cost of sales relate primarily to feedstock purchased under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement.
A significant portion of the Partnership's inputs included in cost of sales are supplied by Westlake. Charges from related parties included in cost of sales were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2026
2025 (1)
2026
2025 (1)
Feedstock purchased from Westlake and included in cost of sales$112,056 $104,753 $317,295 $298,146 
Other charges from Westlake and included in cost of sales45,288 43,973 140,349 132,407 
$157,344 $148,726 $457,644 $430,553 
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(1)Revised. As previously disclosed, feedstock purchased from Westlake and included in cost of sales was $95,110 and $271,176, and other charges from Westlake and included in cost of sales were $33,952 and $99,158, for the three and nine months ended September 30, 2025, respectively. See Revision of Previously Reported Amounts below.
Revision of Previously Reported Amounts
During the third quarter of 2026, the Partnership identified that certain charges from Westlake had been omitted from its previously reported related party cost of sales disclosures. The amounts for the three and nine months ended September 30, 2025 in the table above have been revised.
The following tables present the amounts by which the previously disclosed amounts for other periods were understated:
Year Ended December 31,
202520242023
Feedstock purchased from Westlake and included in cost of sales$37,586 $38,269 $39,207 
Other charges from Westlake and included in cost of sales43,275 32,887 38,363 
$80,861 $71,156 $77,570 
Three Months Ended March 31,Three Months Ended June 30,Six Months Ended June 30,
202620252026202520262025
Feedstock purchased from Westlake and included in cost of sales$11,350 $8,154 $10,233 $9,173 $21,583 $17,327 
Other charges from Westlake and included in cost of sales11,293 11,986 10,815 11,242 22,108 23,228 
$22,643 $20,140 $21,048 $20,415 $43,691 $40,555 
There was no impact to the Partnership's consolidated balance sheets, statements of operations, statements of changes in equity or statements of cash flows. The impact to all previously reported interim and annual periods was not material. The amounts for the nine months ended September 30, 2026 include the corrected amounts for the first and second quarters of 2026. The amounts for the years ended December 31, 2024 and 2025, the three months ended March 31, 2026 and the three and six months ended June 30, 2026 will be revised when those periods are presented in future filings.
Services from Related Parties Included in Selling, General and Administrative Expenses
Charges for services purchased by the Partnership from Westlake and included in selling, general and administrative expenses primarily relate to services Westlake performs on behalf of the Partnership under the Omnibus Agreement, including the Partnership's finance, legal, information technology, human resources, communication, ethics and compliance and other administrative functions.
Charges from related parties included within selling, general and administrative expenses were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Services received from Westlake and included in selling, general and administrative expenses$7,861 $6,691 $20,898 $18,398 
Goods and Services from Related Parties Capitalized as Assets
Charges for goods and services purchased by the Partnership and OpCo from Westlake, which were capitalized as assets, relate primarily to the services of Westlake employees under the Services and Secondment Agreement.
Charges from related parties for goods and services capitalized as assets were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Goods and services purchased from Westlake and capitalized as assets$1,151 $462 $2,225 $6,943 
Receivable under the Investment Management Agreement
On August 1, 2017, the Partnership, OpCo and Westlake executed an investment management agreement (the "Investment Management Agreement") that authorized Westlake to invest the Partnership's and OpCo's excess cash with Westlake for durations of up to a maximum of nine months. Per the terms of the Investment Management Agreement, the Partnership earns a market return plus five basis points and Westlake provides daily availability of the invested cash to meet any liquidity needs of the Partnership or OpCo. Accrued interest of $544 and $206 was included in the receivable under the Investment Management Agreement balance at September 30, 2026 and December 31, 2025, respectively. Total interest earned related to the Investment Management Agreement was $544 and $224 for the three months ended September 30, 2026 and 2025, respectively, and $1,218 and $2,333 for the nine months ended September 30, 2026 and 2025, respectively.
The Partnership's receivable under the Investment Management Agreement was as follows:
September 30,
2026		December 31,
2025
Receivable under the Investment Management Agreement$65,715 $23,378 
Accounts Receivable from Related Parties
The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake and any Buyer Deficiency Fee and Shortfall recognized under the Ethylene Sales Agreement.
As of December 31, 2025, OpCo had an annual production deficiency under the Ethylene Sales Agreement for the full year 2025 primarily due to the Petro 1 turnaround extending into April 2025, which was later than the planned completion in March 2025. The Buyer Deficiency Fee is measured periodically based upon the lower of the actual production deficiency at period end or the estimated annual production deficiency based upon OpCo's annual anticipated production. These periodic estimates are updated at the end of the year based on actual annual production. The Buyer Deficiency Fee is classified as a component of net sales—Westlake. The total Buyer Deficiency Fee recognized by the Partnership during the twelve months ended December 31, 2025 was $5,835. The Buyer Deficiency Fee recognized in 2025 was received by the Partnership in January 2026.
The Partnership's accounts receivable from Westlake were as follows:
September 30,
2026		December 31,
2025
Accounts receivable—Westlake$43,630 $63,571 
Accounts Payable to Related Parties
The Partnership's accounts payable to Westlake result primarily from feedstock purchases under the Feedstock Supply Agreement and services provided under the Services and Secondment Agreement and the Omnibus Agreement.
The Partnership's accounts payable to Westlake were as follows:
September 30,
2026		December 31,
2025
Accounts payable—Westlake$19,533 $19,132 
Related Party Leases
OpCo is obligated to Westlake under various long-term and short-term noncancelable operating leases, primarily related to rail cars and land. Operating lease rentals paid to Westlake for such leases were $556 and $468 for the three months ended September 30, 2026 and 2025, respectively, and $1,474 and $1,246 for the nine months ended September 30, 2026 and 2025, respectively, and are reflected in other charges from Westlake that are included in cost of sales.
OpCo has two site lease agreements with Westlake, each of which has a term of 50 years. Pursuant to the site lease agreements, OpCo pays Westlake one dollar per site per year.
Debt Payable to Related Parties
See Note 9 for a description of related party debt payable balances.
Interest on related party debt payable balances, net of capitalized interest, for the three months ended September 30, 2026 and 2025 was $5,110 and $5,947, respectively. Interest on related party debt payable balances, net of capitalized interest, for the nine months ended September 30, 2026 and 2025 was $15,314 and $17,391, respectively. Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations. At September 30, 2026 and December 31, 2025, accrued interest on related party debt was $5,110 and $5,508, respectively, and is reflected as a component of accrued and other liabilities in the consolidated balance sheets.
Debt payable to related parties was as follows:
September 30,
2026		December 31,
2025
Long-term debt payable to Westlake$399,674 $399,674 
Major Customer and Concentration of Credit Risk
During the three months ended September 30, 2026 and 2025, Westlake accounted for approximately 83.3% and 89.5%, respectively, of the Partnership's net sales. During the nine months ended September 30, 2026 and 2025, Westlake accounted for approximately 83.2% and 87.3%, respectively, of the Partnership's net sales.