A $2.6 billion joint venture petrochemical plant to be built by Qatar Petroleum and South Korea's Honam Petrochemical Corp will be delayed by a year due to tight credit markets, a source at Honam said on Wednesday.

'Project financing is a big issue now, which is why we have to push back our project,' the source told reporters on the sidelines of a petrochemical conference in Dubai.

Completion of the plant would be delayed to at least 2012, he added, declining to be identified.

The plant was last scheduled to start up in 2011. When QP and Honam first announced it in 2005, the plant was to begin output in 2009.

Honam said it would invest $363 billion won ($348.7 million) for a 30 per cent stake in the project at Mesaieed Industrial City last year.

Qatar Intermediate Industries Holdings Company, an affiliate of Qatar Petroleum, would hold the remaining 70 per cent.

Qatar Petroleum would supply ethane and naphtha for the petrochemical cracker, which will have total propylene and polypropylene capacity of 900,000 tonnes per year.

Foster Wheeler won the contract for engineering and design and project and construction management for the plant in October 2007.

Crackers process oil product naphtha and ethane gas to produce the basic building blocks for the chemicals and plastics industry.

Exxon Mobil has also signed a deal with Qatar to build a petrochemical cracker, with a price tag of $3 billion and a 2012 start-up date.-Reuters