For years since the first reports of oil seeps near Kerema on the Gulf of Papua coast, exploration for oil and gas took place in PNG. These exploration activities escalated in the late 1980's. In December 1991 the Hides gas field was the first to go into commercial production closely followed by Kutubu, Gobe and Moran.

With the discovery of the large gas reserves the Natural Gas Policy was created in 1995, whereby the government provided incentives for gas development. These incentives led to a few schemes. Of these the most advanced at present is the PNG gas project for the pipeline transport of gas to customers in Queensland, Australia.