Earlier this month, Oil Search and PNGSDP launched a study on a possible gas pipeline from the P’nyang gas field to Daru, and an assessment of gas resources in Western Province, believed to total about 2 trillion cubic feet. It was thought that if there was adequate gas, a medium or small scale LNG plant might be feasible.

Such a development would have no relation to the much larger LNG plant planned by operator ExxonMobil, Oil Search and Santos, which would draw from different gas reserves and is likely to be sited near Port Moresby.

But the program's chief executive, Robert Igara, told landowners late last week that existing infrastructure could not support a mid-sized LNG project, which was expected to bring in around $US10 billion (K27.51 billion), the Post Courier newspaper reported.

Igara said Daru's airport, sanitation, telecommunications and electricity supplies were not up to standard to support the project.

"The infrastructure Daru has does not fit to support the port and even support an LNG project," Igara was reported as saying in a meeting to fast-track the establishment of an international deep sea port in Daru.

Junior LNG developer Liquefied Natural Gas Ltd is also considering developing gas in the Western Province region, but Daru was not on its development shortlist. Its preferred options are a plant on Umuda Island, north-northeast of Daru, or one or more floating LNG plants.