Grangemouth refinery operator Ineos said it has approved a €2.7 billion capital project to build “both a world scale ethane cracker and a PDH (Propane Dehydrogenation) unit in Northern Europe.”

Ineos said: “The location of the site will be determined soon and it is likely to be on the coast of North West Europe.

“A project team has been assigned to consider options and the project is expected to be completed within four years.”

Ineos said both units “will benefit from US shale gas economics.”

Gerd Franken, chairman INEOS Olefins and Polymers North, said: “This new project will increase Ineos self-sufficiency in all key olefin products and give further support to our derivatives business and polymer plants in Europe.

“All our assets will benefit from our ability to import competitive raw materials from the USA and the rest of the world”

Jim Ratcliffe, founder and chairman of Ineos, said: “This new investment builds on the huge investment we made in bringing US shale gas to Europe and will ensure the long-term future of our European chemical plants.”