Production on the BP-operated project, located in West Papua, about 3000km east of Jakarta, is set to start in 2008.

BP, whose gas sales account for about 40% of its total revenues, has said construction will start "in the near future".

Tangguh will be a centrepiece of BP's Asia-Pacific gas operations. Total cost is estimated to be close to US$5 billion, with the project providing about 6% of total global LNG demand.

The London-based oil and gas giant has awarded contracts worth about US$2 billion to foreign firms, including a group led-by US oil services company Kellogg, Brown & Root (KBR), and Italy's Saipem.

KBR, a Halliburton subsidiary, will build the liquefaction plant, jetties and other infrastructure needed to export the gas. Saipem, a unit of Italian oil company Eni, will build offshore installations such as gas platforms and pipelines.

Gas from the Wiriagar, Muturi and Berau fields – which have combined gas reserves of 14.4 tcf – will feed into the project in Indonesia's remote Papua province.

BP had delayed making a final investment decision until it gained government agreement for extending production sharing contracts for the fields.