Papua New Guinea's Petroleum and Energy Minister says InterOil has ignored repeated calls by the government for it to engage a major operator for the Gulf Province LNG Project.
PNG's government has shelved the project after it found InterOil had deviated from the 2009 agreement that it reached for the project.
The Minister, William Duma, says the agreement stipulated that the project involve a major international LNG operator, something he claims InterOil isn't.
He says the exploration licensee is proposing a small scale, fragmented project.
"What they've done is they've entered into agreements with smaller companies and they want to do it in stages. That is not how you do it in an LNG project. You have to take advantage of the window of opportunity in the priving. When the prices are good, you lock in the price for 20 or 30 years with customares and you do a big LNG train, one train or two train project, you don't do it in phases."