Europe’s largest ethane storage tank will be built in Scotland after the Treasury agreed to provide financial backing for a £230m project.
The Treasury will underwrite a £230m loan for Grangemouth petrochemical plant in Scotland to build the storage tank.
The scheme is the latest to be backed by a UK Guarantee, after schemes including Hinkley Point C and the Mersey Gateway bridge.
A contract has been signed with TGE Gas Engineering for construction of the ethane storage tank.
Chief secretary to the Treasury, Danny Alexander said more than £1bn of infrastructure projects have received UK Guarantee backing and £36bn worth of projects are pre-qualified.
Grangemouth plant owner INEOS has invested more than £300m at the site.
The UK Guarantee will allow it to raise financing on a £230m import facility and storage tank to be built at the site.
Planning permission for the construction of the ethane tank was granted in May by Falkirk Council. The tank will have the capacity to store 60,000 cubic metres of ethane gas.
INEOS chairman Jim Ratcliffe 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.”
The ethane tank will be the largest in Europe and is part of INEOS plans to import shale gas from USA.
By 2016 Grangemouth will be a shale gas-based facility.
TGE managing director, Werner Schlott said: “We have extensive expertise and knowledge of tank construction and relish the opportunity to bring this to Scotland. We look forward to working with the project team at Grangemouth and to delivering the ethane storage tank.”