CHEMICALS firm Huntsman is looking to expand its operations on Teesside in a move that would create hundreds of jobs for the region.

The US-owned company wants to build a specialist polyethylene plant on the Wilton International site, near Redcar.

It is understood such a move would create 70 to 80 direct full-time jobs and several hundred construction posts over a two-year period to build the plant. It would also safeguard 400 employees' jobs at its Cracker works. A polyethylene unit would cost more than £100m to build.

The news reflects the positive mood on the Wilton site after the announcement on Tuesday that Enron Operations Teesside Limited had been sold to Sembcorp Utilities of Singapore for £83m.

Huntsman said last night that it was carrying out a feasibility study before making a decision on whether or not to proceed with the project.

A source said the firm was serious in its intent and was spending £650,000 on the survey. The company said it anticipates being in a position to announce the results of the survey in July.

The firm has made no secret of its desire to see a dedicated polyethylene plant at Wilton.

Huntsman produces two million tonnes of bulk commodity chemicals ethylene, propylene and butadiene each year. It wants to supply ethylene to a polyethylene producer on Teesside, but depressed world markets have stopped a potential suitor setting up on the site.

Huntsman is no stranger to polyethylene production - it has plants in North America, but a new unit on Teesside would be the first time the company had pursued that line of business in Europe.

Bill Perfitt, Huntsman spokesman, said: "We would prefer an existing polyethylene major (producer) to build here and do a deal, whereby we provide the ethylene.

"We have not managed to do that, so we are looking at the possibility of potentially building one ourselves, or perhaps with a joint partner.

"We are in the throes of a feasibility study into this project. We need to go into great detail before a final decision is made."