PNGSDP director Don Manoa said the Western Province had the second-largest discovered gas resources in PNG. Gas fields in the province include the Kimu, Douglas, Stanley and Elevala fields.

Oil Search managing director Peter Botten said the first part of the project was to analyse the resources that were available for gas development.

"Once we understand more about the resource in terms of its size, shape and feasibility in exploiting it, we can move on to phase two," the National newspaper quoted Botten as saying.

Phase two will involve looking at the market, development options and infrastructure, while phase three will involve developing the gas sources, according to Botten.

PNGSDP has a 52% stake in the Ok Tedi copper-gold mine and uses its income from the mine to promote sustainable development in the Western Province.