OIL SEARCH TO SHELVE TROUBLED PNG GAS PROJECT.

SYDNEY, Feb 1 Asia Pulse - Oil Search Ltd (ASX:OSH) has announced it is shelving its troubled $A8 billion ($US6.2 billion) Papua New Guinea gas project.

In a statement the company said the costs of the pipeline project weren't attractive when compared with a number of other projects on offer, and the partners had decided to suspend work on the project.

Oil Search managing director Peter Botten said the company had received a positive response after seeking expressions of interest from pipeline builders and owners for the project, including a revised proposal to build the gas pipeline through Mt Isa, in Queensland.

"The submissions confirmed Oil Search's belief that the PNG Gas Project is an attractive investment option, based on appropriate cost control and continued strong market support," Mr Botten said.

"Nonetheless, it is clear that the alternative development options, including LNG, petrochemicals and other in-country options, which were not present two years ago, are now demonstrably more attractive and cannot be ignored," he said.

Mr Botten said part of the problem had been energy ...