TN PETRÓLEO

BP PLC (BP) has put on ice plans to develop the Harding North Sea gas field into a transport hub for new gas resources due to high costs and low gas prices, a spokesman for the company said Thursday.

"We are now in discussions to look at alternative development options," the spokesman said.

BP was planning to build on existing facilities at Harding, which has been producing oil since 1996, adding a second processing platform and connecting it to the undeveloped Devenick field. The hub would have connected to the Brae pipeline and brought gas ashore.

The spokesman said there were 600 billion cubic feet of recoverable reserves in the two fields. The development could have produced gas at rates of up to 400 million cubic feet a day.

The company began the GBP8.4 million front end engineering and design for the project in July 2006 with contractors AMEC PLC (AMEC.LN), JP Kenny and Production Services Network.

Many oil and gas producers say the low gas price in the U.K., coupled with high development costs and high taxes, is making it less economic to develop the North Sea`s remaining gas resources.

Earlier this week, Chris Cox, vice president of U.K. Upstream for BG Group PLC (BRG), said the government should slash tax on new gas developments by 20% or risk seeing remaining resources go undeveloped.

The U.K. government has raised the supplementary tax on U.K. oil and gas production profits by 20% in recent years due to rising oil prices.

The BP spokesman said the Harding project "was not helped by the tax changes," but it was just one of many factors in the decision.