Papua New Guinea's prime minister, Sir Michael Somare, says the decision by the country's producer Oil Search to shelve its multi billion dollar gas pipeline project, will open the way for alternatives.
The plan was to pipe gas from the Southern highlands to the Australian state of Queensland.
Our correspondent in PNG, Alex Rheeney, says Sir Michael has acknowledged the pull out.
"Sir Michael has accepted the announcement. Now that the developers have decided to suspend the project it opens the way for the government to pursue new alternative options to commercialise PNG's gas reserves."
Alex Rheeney says the prime minister did not specify what those alternatives are.