“I know we have finalised a deal with Santos which is now subject to endorsement by their board," Sir Moi told the Townsville Bulletin.

The comment provides the first solid indication that the much talked about re-entry of Santos, which holds a 25% stake in the crucial Hides gas fields, could soon become a reality.

Oil Search managing director Peter Botten told PNGIndustryNews.net earlier this month he hoped to finalise a deal with Santos within weeks.

Santos spokeswoman Katheryn Mitchell told PNGIndustryNews.net yesterday that any official announcement from Santos would only be made via the channels of the Australian Stock Exchange.

She declined to comment on a timeframe for any announcement to be made with regards to Santos’ re-entry to the project.

“We are having, and have been having, ongoing discussions regarding our possible re-entry into the PNG gas project. I have nothing to confirm at this stage and any statement that we make on that project will be made to the Australian Stock Exchange,” she said.

Mitchell also declined to comment on whether Sir Moi’s statement was incorrect.

“I am saying that Santos has nothing to add to that,” she said.

The proposed PNG-Queensland pipeline project, which involves the supply of around 3000PJ of gas to Australia via a 4500km pipeline, is due for sanction in the second half of this year.

Development of the project has gained significant momentum in the past few weeks with major customer, the Australian Gas Light Company, committing to a $A4.5 billion, 20-year sales agreement with the upstream partners including ExxonMobil and Oil Search.

According to the Townsville Bulletin, Sir Moi is currently hosting a delegation from Townsville, including the city’s mayor Tony Mooney, who is in PNG for high-level talks regarding the project.

“There have been a lot of question marks over this project over the past 10 years but now everyone is working together and I think its time has come,” he said.