Against the back of the cheap shale gas boom, US chemicals firm Westlake Chemical is filing for an IPO for Westlake Chemical Partners, a new subsidiary that has plans to operate, acquire and develop ethylene production facilities. The company’s business also includes an ethylene pipeline. The company said it intends to raise US$272 million in its IPO.

Houston-based Westlake Chemical manufactures ethylene, polyethylene, propylene and styrene. With the spin-off of the ethylene business, Westlake will be able to focus on more specialised chemicals since ethylene is a key petrochemical building block for more the speciality chemicals it produces.

Westlake Chemical Partners will also operate as a type of master-limited partnership, with Westlake Chemical to retain a majority of the new company’s units. Westlake Chemical has also agreed to purchase the majority of the partnership’s ethylene production. The new firm will include Westlake’s ethylene plants in Louisiana and Kentucky, which together would have an capacity of around 1.4 million tonnes/year.

Westlake — with major businesses in ethylene, polyethylene and PVC resin and pipe — has benefited from low-priced natural gas feedstock at many points of its production chain. The firm added 230 million pounds of ethylene capacity last year at its plant in Lake Charles, La. In 2014, Westlake plans to add almost 200 million pounds of PVC resin capacity and 180 million pounds of ethylene capacity at a site in Calvert City, Ky.