BP has put plans for a 320 million pound liquefied natural gas terminal in Texas on hold.
The proposed LNG terminal was to be located just 10 miles from BP's refinery which killed 15 people in an explosion about a year ago.
While the plan garnered some support in the area as it would have created 80 jobs and increased the level of traffic in Port Galveston, it ran into some controversy from environmentalists and residents caught up in the Texas city blast.
A spokesman claimed that the decision had been made on economic grounds and had not been influenced by local politics.
The company announced that it would renew its lease on the Pelican Island site that had been earmarked for the terminal for another year while it considered the economic viability of Pelican Island.
There is a strong demand for gas in the US, with supply falling short. BP is looking to take a stake in the demand. LNG terminals make it possible to bypass the huge cost of developing pipelines between gas producing countries and countries with more demand than domestic supply.
At present the US has 4 LNG terminals, with proposals for another 40, raising fears of excess gas supply pushing down prices.
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