"The Tangguh project is committed to abiding by this stipulation," the company said in a media release. "Studies are underway, and the project looks forward to working with the government in this area."

The project is timed to begin site works and construction next year. It is located in the Berau-Bintuni Bay area in Papua province and involves the resettlement of approximately 500 people living in the village of Tanah Merah, the site of the plant. It will employ 5,000 people in its construction phase, but the number will be cut back to 300 upon completion.

The project will eventually supply 2.6 million tons of LNG per year to China's Fujian province, starting in 2006 or 2007. The project will initially start operations with capacity of 7 million tons per year from two trains.