"The Gas project team is currently involved in design and cost optimisation studies, looking at ways of expanding the PNG gas facilities in the optimal manner to be able to satisfy growing gas demand," he said.

A project sanction decision is then expected to be made by all the project participants during the second quarter.

Botten again added that additional early gas sales, critical to the project's sanction decision, would outperform previous estimates.

"There are strong expectations that market demand for gas in Australia will be higher than our initial expectations," he said.

Earlier this month Australian Gas Light Company committed to purchasing a major portion of gas from the project – namely a $4.5 billion sales agreement for 1500PJ over 20 years. AGL also took a 10% equity stake in the project.

"This is expected to provide momentum to convert the other conditional agreements to binding sales agreements, to support the project sanction decision," he said.

In its latest quarterly Oil Search announced total sales revenue for the year of $US638.4 million, a 60% increase on the previous year. Oil production for the year was a record 12.2 million barrels of oil equivalent.