INTEROIL’s PROPOSED Gulf LNG project has been shelved by the PNG government on the grounds it deviated from it's original proposal, media reports say.

Papua New Guinea's national executive council reportedly killed the project after a vote last Wednesday.

It said it had found InterOil had ignored government concerns and had publicly promoted one project while building another in the nation's Gulf Province.

The PNG's Petroleum Minister, William Duma, attacked InterOil for proposing a “small scale, fragmented” project to be constructed by companies not recognised as LNG operators.

“Instead of delivering a project that fits this project description, LNG/InterOil has been announcing, presenting and promoting a different project without seeking prior state approval,” The National newspaper quoted Mr Duma as saying.

“The PNG government supports, and will continue to support, LNGL/InterOil in delivering the project contemplated in the agreement, but not a project which deviates from the agreement.”

He said the original agreement, dating back to December 2009, was for a “world-class LNG plant of international scale and quality using internationally-recognised technology,” with a plant size of 7.6 million to 10.6 million tonnes of LNG per annum.

The agreement also called for it to be operated by an internationally-recognised LNG operator.

Source: Bigpond News, 27 September    Spotter: Barbara Short