The PNG government is excited at Interoil's discovery of commercial gas reserves in the Eastern Papuan basin.
The newspaper, The National, reports it has the potential to boost the country's liquefied natural gas industry and become the largest resource development to be undertaken in PNG.
The prime minister, Sir Michael Somare, says he is excited by the positive test results.
He says the government and Interoil will work together to be able to confirm the commercial value of the gas field.
An LNG development would see PNG gas shipped to a range of customers in North Asia and the west coast of America.
Bernard Pawih, who administers the PNG Oil and Gas Act, says the government's technical staff has reviewed Interoil's test data which confirmed the discovery.