The $A8 billion plan to pipe gas from PNG to Queensland was abandoned last year by Oil Search, which is now part of an ExxonMobil-led consortium to establish the PNG LNG liquefied natural gas project.

Reported by the Post-Courier newspaper, the brief advised the development on

safeguards to avoid a repetition of the financial and environmental losses experienced in past natural resource projects.

One of the safeguards proposed is the $US1 billion penalty plan, whereby an operator would have to pay this amount and relinquish its licences to the government should it terminate a project agreement.

Three separate major LNG projects - Liquid Niugini Gas, PNG LNG and LNG Limited - require government approval.