Ineos has committed to building a £2.4 billion ethane cracker and a propane dehydrogenation unit in northern Europe.
The cracker will be the first new one to have been built in Europe for two decades.
It will also be one of the most efficient and environmentally friendly plants of its type in the world, Ineos said.
The location of the site will be determined soon.
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.
Gerd Franken, CEO of 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”
This new investment follows a decision taken by Ineos last year to increase the capacity of its existing crackers.
Chairman Jim Ratcliffe said: “Ineos is going from strength to strength. 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.”