Oil giant BP has put plans to build a £500m gas processing plant at Sullom Voe on hold.

The British firm planned to start work on the gas sweetening facility off Shetland this year after a six-month delay.

Around 300 people would have been involved in the construction of the plant and it could have created 30 full-time jobs.

BP now intends to use existing equipment at Sullom Voe to process gas sourced from west of Shetland fields, it is understood.

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."

Last year, BP announced it intends bypass the terminal when the Schiehallion oil field comes back online in 2018.

Before the field was shut down for refurbishment in 2013, BP shuttled oil from Schiehallion through Shetland Island Council's harbour at Sullom Voe, making up around 20% of the total traffic through the port.

Concerns have been raised that Shetland could lose out on up to £5.5m a year as a result of the Schiehallion decision.