Ineos has confirmed it is to build Europe's largest ethane storage tank.

The news comes after the company secured a £230m loan guarantee from the UK Government for the scheme.

The loan would allow the firm, which owns the Grangemouth plant, to raise the funds necessary to invest in a new terminal import and ethane store at the facility.

Planning permission for the £125m store had been approved by Falkirk Council in May.

In a statement, Ineos added that a contract has now been signed with Germany-based TGE Gas Engineering to start construction of the terminal, which will store and process ethane from shale gas "as North Sea supplies dwindle".

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Jim Ratcliffe, INEOS Chairman, said: "Without doubt, this is one of the most important projects of recent times in Scotland, with implications to be felt right across the UK, not only for employment but also for manufacturing in general.

"Our ability to import US shale gas underpins the future of manufacturing at Grangemouth and across many businesses in Scotland. It is a vital step towards preserving the long term future of the Grangemouth site and those businesses that depend upon its continued presence in Scotland."

Danny Alexander, Chief Secretary to the Treasury, said: "Over £1bn of infrastructure projects have now been brought forward as a result of the UK guarantees scheme and £36bn worth of projects are pre qualified.

"Our action is creating the right conditions for more investment in our infrastructure, helping to build a stronger economy and a fairer society across the country. The Grangemouth guarantee is fantastic news for Scotland's economic future, and for the UK's energy security."

Ineos has invested more than £300m at its Grangemouth site as part of a long-term survival plan.

(JP/IT)