20 November 2014 Last updated at 12:21 GMT
The company plans to use the gas as a raw material for its chemicals plants, including Grangemouth in Stirlingshire.
Grangemouth is currently running at a loss, but Ineos believes shale gas will transform the economics of the plant.
Shale gas extraction is promoted as an important potential energy source, but has sparked opposition from environmental groups.
Ineos chairman Jim Ratcliffe said he wanted his company “to become the biggest player in the UK shale gas industry”.
The firm added that “substantial further investment would follow if the company moved to development and production”.
Shale gas is extracted through a technique known as fracking, or hydraulic fracturing, in which water and chemicals are pumped into shale rock at high pressure.
Numerous anti-fracking groups have formed and protests have been staged at several sites over fears of earthquakes, water pollution and environmental damage.
Ineos is currently building Europe’s largest shale gas import facility to feed its petrochemicals plant at Grangemouth – but it wants to produce home-grown shale gas as well.
In recent months it has been buying up rights to explore across hundreds of square miles of the Midland Valley around the Stirlingshire site.
Ineos is also thought to have applied for further licences as part of the government’s ongoing onshore licensing round.
The company outlined plans on Thursday to invest $1bn (£640m) in UK exploration.
“I believe shale gas could revolutionise UK manufacturing and I know Ineos has the resources to make it happen, the skills to extract the gas safely and the vision to realise that everyone must share in the rewards,” said Mr Ratcliffe.
BBC industry correspondent John Moylan said the move will be seen as a significant vote of confidence in the sector, and will position Ineos as one of the major players in the emerging industry.
But, he added, it will also put Ineos in the sights of protesters who believe shale gas and fracking are dangerous and harmful to the environment.
A spokesman for Greenpeace UK characterised Ineos’ investment as “giant speculative bets on unproven and risky resources”.
“It seems that Ineos have based their business plan on breathless PR brochures rather than scientific reports,” he added.
Earlier this year, Ineos announced plans to hand over up to £2.5bn of shale gas revenues to communities close to its wells.
The company has bought the licence for shale gas exploration and development across a 329sq km area around its Grangemouth power plant.
It will give away 6% of revenues to local homeowners and landowners.
However, Friends of the Earth Scotland criticised the move as “a transparent attempt to bribe communities”.
The British Geological Survey has estimated there are “modest” shale gas and oil resources in the area.
Fracking is used extensively in the US where it has revolutionised the energy industry.
The Scottish government has called for devolved powers on fracking after the UK government decided to press ahead with plans to let companies drill at depths of 300m below private land without consent.
Analysis: John Moylan, BBC Industries Correspondent
This sounds like a huge investment by Ineos.
But any firm wanting to bring shale gas from the exploration stage through to full production will have to spend hundreds of millions of pounds.
An industry report earlier this year suggested that a single shale gas production site with 10 wells might cost as much as £350m. So firms intending to have multiple gas production sites will have to spend eye-watering sums.
But the timing of this announcement is key. The government is currently assessing applications made by operators for new onshore licences to explore for shale gas.
Firms have to demonstrate that they have the cash and know-how to exploit a license area. If this has been a competitive license round – and there’s a suggestion that this is the case – then firms like Ineos will have to lobby hard to ensure they get the areas that they want.
There could be more announcements like this from other industry players in the weeks and months ahead.