Plans to build a £500 million gas processing plant at the Sullom Voe terminal in Shetland have been put on hold by oil giant BP.

The firm had planned to start work on the gas sweetening facility this year after a six-month delay but has confirmed it is now looking at using existing equipment on site and offshore to process gas from the west of Shetland.

Around 300 people would have been involved in the three-year construction of the North Sea facility, which could have created 30 full-time jobs.

Local contractor DITT Construction, which has been undertaking preparation work at the terminal, will finish up next month.

The firm currently has 20 staff working on the development, of which about a dozen now face being made redundant.

A spokesman for BP said: “Initial site preparation works for the Sullom Voe Gas Sweetening Plant (SVGS) are now complete.

“In the current climate, SVGS partners have requested that all options be reviewed to see if further cost reductions or efficiencies can be identified.

“We expect that the focus of the project will shift to invest in, and maximise use of, existing equipment and potentially undertake additional sweetening offshore.”