UPDATE 2-Indonesia's Tangguh loading first LNG to South Korea

* One cargo could leave Saturday night and go to POSCO

* Delivery switched from Fujian in China as terminal not ready

* China LNG pricing sensitive ahead of Indonesia election (Recasts with second official on LNG tanker not yet departed)

By Muklis Ali

JAKARTA, July 3 (Reuters) - The first delivery of liquefied natural gas (LNG) from the BP-led (BP.L) Tangguh project in Indonesia's Papua is set to depart soon for South Korea, the director general of oil and gas said on Friday.

Earlier, Energy Minister Purnomo Yusgiantoro told reporters the $5 billion project was ready and a cargo had already left, but this was later clarified.

"The cargo has not left yet because they are filling the LNG tanker slowly," Evita Legowo, director general of oil and gas at the energy minister, told reporters. She said the cargo could depart on Saturday night and was going to South Korea's POSCO (005490.KS).

The energy minister, who visited Tangguh last week, had said earlier that the cargo going to South Korea was switched from Fujian in China because a receiving terminal was not ready there.

Indonesia, the world's third-biggest LNG exporter, has been counting on Tangguh to help make up for declining production at other projects.

The plant in the remote Papua province in eastern Indonesia is due to be the country's third LNG centre with a capacity to produce 7.6 million tonnes per year (tpy) via two trains.

The project, which had been delayed several times due to technical problems, including a damaged valve, comes on stream as falling global demand has caused a glut of LNG supply and tumbling prices.

Asian LNG prices peaked above $22 per British thermal unit (mmBtu) last summer, but have since sagged to below $5.

Tangguh has several foreign supply contracts, including a 2.6 million tpy contract with China National Offshore Oil Corp (CNOOC) (CEO.N) (0883.HK).

The deal struck with China has become a sensitive issue ahead of Indonesia's presidential election on July 8, with some politicians slamming the gas price agreed under the previous government of former president Megawati Sukarnoputri as too low.

There have also been some calls ahead of the election for Indonesia to allocate more gas to the domestic market rather than for exports.

U.S. firm Sempra Energy (SRE.N) also has a 20-year contract to lift 3.6 million tpy with the right to divert half to customers other than its own terminal in Mexico.

The project also has a supply contract with South Korea's K-Power. (Writing by Ed Davies; Editing by Ben Tan)