A Teesside petrochemical firm’s latest US shale gas deal to safeguard hundreds of Teesside jobs could attract more companies to the area, according to sector chiefs.

SABIC has signed an agreement with a US company to import Britain’s largest “Cracker” - the company’s Olefins 6 plant at Wilton - with cheaper feedstock, protecting around 900 direct and indirect jobs.

Stan Higgins, NEPIC (North East Process Industry Cluster) chief executive, says the major upgrade will not only make the Cracker one of Europe’s most cost-effective facilities, it could boost Teesside’s process sector by attracting more firms.

And Wilton’s position, close to a sea port, will give it a “competitive edge” over many other European plants he claims.

SABIC announced last year it would invest a significant sum to convert its 223-acre plant to take ethane, which is far cheaper than naphtha, the feedstock previously used to make its products.

Stan said: “SABIC is importing what is basically a by-product of shale gas in the US, which will make the Cracker economically viable.

“It’s a long-term contract, that gives Teesside integrated facilities and a good run at the next 10 or 15 years.

“Whatever they do, there are other developments in UK such as shale and Underground Coal Gasification (UCG) that could also support the industry going forward.

“Hopefully some of these developments will be well-established before the end of their contract.

“It shows how important raw materials costs are to the petrochemical industry.

“Some European crackers are inland, nowhere near a sea port like we are - which might give our Cracker a competitive edge.

“It underpins SABIC’s products, and might help attract downstream businesses over the coming years.

“It can be part of the mix. Companies could come if they have a supply chain linked to the output of the Cracker - it could be an incentive for them to relocate here.”

The deal, he said, was also part of linked to Teesside’s bid to become the first UK area to develop Industrial Carbon Capture and Storage (CCS) which will help Teesside’s heavy industries be more competitive as carbon taxes increase.

SABIC UK, which also has a site at North Tees, employs around 600 direct staff and 300 contractors. Its Teesside operations produce a range of chemical products that go into everyday items, from toothbrushes to TVs.