BP says it remains on track to operate two LNG trains by 2005/06 and hoped to win the right to supply another potential Chinese project in Fujian. It said Tangguh had large reserves of gas, low cost of supply and a very strong partner in Pertamina.

However Pertamina has indicated that it would only be able to build one LNG train in the first stages of the Tangguh development due to the loss of the Guangdong contract. There is a big enough market elsewhere to enable Tangguh to meet development targets, which include initial annual capacity of 6-7 million tons.

"There's the second phase of Guangdong, the possibility of the Fujian contract, other markets in China, the US west coast, and Japan," according to Steve Lawrence, BP public affairs director.

"There's a lot of opportunities so we feel our project is sufficiently robust to be able to go ahead." In addition, BP has signed a letter of intent with the Philippines to supply 1.3 million tons of LNG per year from Tangguh.

Lawrence said while BP and Pertamina have yet to sign a deal with CNOOC for the proposed Fujian contract, "we've heard some encouraging words from China and continue discussions towards that".