This announcement contravenes BP’s previous declarations the Tangguh project will be up and running by 2007 in order to meet commitments from South Korea, China and other buyers.

Citing David Clarkson, a BP executive in charge of building work, the Financial Times said, “The first of the project’s two planned LNG production facilities, or trains, [will] only be completed by around July 2008 and the second within six months of that.”

According to the newspaper, BP may have to turn to Woodside Petroleum’s Northwest Shelf project in order to make up the shortfall and fulfil its obligations.

BP did not comment on the issue.

In related news, Indonesia’s oil and gas watchdog BP Migas has announced BP Plc has signed a US$2 billion LNG deal which will see it supply 800,000 tons of LNG per annum to South Korea’s K Power for the next 20 years starting 2006.

K Power is a JV between BP and the state-owned SK Corp.

In a statement BP Migas said, “This is an important milestone in the development of Tangguh LNG project following the sales and purchase agreement (SPA) which has been signed with Fujian and POSCO, as well as the finalisation of an SPA with Sempra.”

K Power will use LNG from Tangguh to supply its power plant which is currently being built in Gwang Yang, South Korea. The plant is expected to commence operations in 2006.