Reports from Papua New Guinea say the InterOil-proposed Gulf LNG project has been shelved.
The newspaper, The National, says the government has acted on the grounds that the project has deviated from its original proposal.
The paper says the national executive council killed the project after a vote last Wednesday.
It said it had found InterOil had ignored government concerns and had publicly promoted one project while building another in Gulf Province.
On Monday, the Petroleum Minister, William Duma, criticised InterOil for proposing what he called a small scale, fragmented project to be constructed by companies not recognised as LNG operators.
He said the original agreement, dating back to 2009, was for a world-class LNG plant of international scale and quality using internationally-recognised technology.