For the last two years, InterOil Corp. has been looking to tap into the liquefied natural gas reserves under Papua New Guinea which could yield more than 5 trillion cubic feet of gas.
Last week, the company agreed to sell a majority stake in the LNG development project to Total SA (NYSE: TOT) for an as-of-yet undetermined amount. The deal could be worth up to $3.6 billion, depending upon the fecundity of the fields in Papua New Guinea.
Australia's Oil Search is reportedly in talks with InterOil getting involved with the project as well. The company has been operating in PNG since 1929 and already works with Total on exploration projects there.
The development of LNG wells by Total and Oil Search is seen as a competitive move against ExxonMobil (NYSE: XOM), which operates a $20 billion liquefied natural gas facility in Papua New Guinea. ExxonMobil will begin shipping gas to Asia in 2014.