So when the ambitious project to pipe gas to Australia stalled the first time several years ago, Oil Search began exploring every possible alternative.

And despite AGL's announcement that it is not interested in either building or owning the gas pipeline – Oil Search is sympathetic since it doesn’t like the idea of owning pipelines either – Botten has been far from downbeat.

The company’s share price has remained resilient despite the negative news and Botten told analysts attending the company’s interim results announcement on Tuesday if the Australian project does not work out, his company would pursue other options.

The sale of gas to Australia remains a priority, though, and Botten is optimistic project closure could still occur by the end of this year.

But if the process of signing up confirmed sales of 250 petajoules a year – largely dependent on whether Santos signs up – is severely delayed, gas reserves targeted for Australia are going to be diverted to domestic PNG use at two large petrochemical plants in Port Moresby.

At the moment, reserves are said to be adequate for supplies to Australia as well as for a liquefied natural gas venture that Oil Search believes could commence from PNG by around 2012-13.

PNG Petroleum and Energy Minister Sir Moi Avei has indicated he expects Santos, which has a 25% stake in the big Hides gas field, to make up its mind by the end of this month.

Suggestions have been made that the Government could forfeit its equity in Hides in the same manner that the Queensland Government had forfeited Alcan Australia’s 100% stake in the big Aurukun bauxite deposit in Cape York Peninsula because it had not been developed over many years.

Santos is probably faced with a highly conflicting set of circumstances.

Although reserves at the Santos-controlled Cooper Basin area are declining, there would be financial benefits for the company if there was less competition from imported gas from PNG.

The PNG Government has good reason to be annoyed with Santos, having already made a major concession to allow wet gas to be exported from PNG even though there is a lot of domestic opposition to the idea.

Events in the next few months will determine whether the gas project will proceed or suffer a premature death.

Either way, Botten will be moving on with an aggressive exploration program over the next 18 months in PNG, Yemen and Egypt.

He has made clear to analysts that even without supplying gas to Australia, Oil Search has reasonably firm plans for several projects that require PNG gas suppliers to invest more than $US5 billion in less than 10 years.

Even for a company that has seen revenue rise more than 10-fold in the past decade, this is a tough schedule and, given some delays in the PNG to Australian project, the entire timetable could end up sliding somewhat.

*Brian Gomez is a former business editor of PNG newspaper The National