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Related Party Transactions
 9 Months Ended
Sep. 30, 2024
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, 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 2023 consolidated financial statements included in the 2023 Form 10-K filed on February 28, 2024, 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 significant 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 it charges 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,
2024202320242023
Net sales—Westlake$215,799 $289,303 $690,535 $771,349 
As a result of the Partnership's decision to postpone the previously announced maintenance turnaround at the Petro 1 facility from the third quarter of 2024 to the first quarter of 2025, OpCo's production is anticipated to result in "excess quantities" of ethylene for the current contract year. Therefore, Net sales—Westlake was reduced by $5,885 during the three and nine months ended September 30, 2024 in connection with charges to Westlake, under the Ethylene Sales Agreement, for certain non-variable costs of production subject to reimbursement related to the "excess quantities".
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 for significant inputs included in cost of sales were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Feedstock purchased from Westlake and included in cost of sales$65,053 $120,040 $220,597 $303,809 
Other charges from Westlake and included in cost of sales31,274 31,072 92,940 91,707 
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,
2024202320242023
Services received from Westlake and included in selling, general and administrative expenses$6,618 $6,670 $19,793 $19,966 
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,
2024202320242023
Goods and services purchased from Westlake and capitalized as assets$795 $1,035 $1,644 $2,907 
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 $1,368 and $1,272 was included in the receivable under the Investment Management Agreement balance at September 30, 2024 and December 31, 2023, respectively. Total interest earned related to the Investment Management Agreement was $1,368 and $1,186 for the three months ended September 30, 2024 and 2023, respectively, and $3,979 and $3,151 for the nine months ended September 30, 2024 and 2023, respectively.
The Partnership's receivable under the Investment Management Agreement was as follows:
September 30,
2024		December 31,
2023
Receivable under the Investment Management Agreement$109,540 $94,444 
Accounts Receivable from Related Parties
The Partnership's accounts receivable from Westlake result primarily from ethylene sales to Westlake and the buyer deficiency fee and shortfall fee recognized under the Ethylene Sales Agreement.
As a result of force majeure events in 2021, the Partnership recognized a shortfall fee of $58,906 during 2021, of which $189 remained to be collected by the Partnership as of December 31, 2023 and was received in the nine months ended September 30, 2024.
The Partnership's accounts receivable from Westlake were as follows:
September 30,
2024		December 31,
2023
Accounts receivable—Westlake$44,885 $49,565 
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. As of September 30, 2024, accounts payable to Westlake also included $5,885 related to amounts charged to Westlake under the Ethylene Sales Agreement for certain non-variable costs of production subject to reimbursement as a result of OpCo's production of "excess quantities" of ethylene in the current contract year due to the Partnership's decision to postpone the previously announced maintenance turnaround at the Petro 1 facility from the third quarter of 2024 to the first quarter of 2025.
The Partnership's accounts payable to Westlake were as follows:
September 30,
2024		December 31,
2023
Accounts payable—Westlake$14,833 $15,166 
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 $471 and $433 for the three months ended September 30, 2024 and 2023, respectively, and $1,326 and $1,480 for the nine months ended September 30, 2024 and 2023, 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, 2024 and 2023 was $6,698 and $6,437, respectively. Interest on related party debt payable balances, net of capitalized interest, for the nine months ended September 30, 2024 and 2023 was $19,930 and $19,869, respectively. Interest on related party debt payable is presented as interest expense—Westlake in the consolidated statements of operations. At September 30, 2024 and December 31, 2023, accrued interest on related party debt was $6,753 and $6,675, 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,
2024		December 31,
2023
Long-term debt payable to Westlake$399,674 $399,674 
Major Customer and Concentration of Credit Risk
During the three months ended September 30, 2024 and 2023, Westlake accounted for approximately 77.9% and 89.9%, respectively, of the Partnership's net sales. During the nine months ended September 30, 2024 and 2023, Westlake accounted for approximately 81.6% and 86.3%, respectively, of the Partnership's net sales.