The Korea Economic Daily reported that Korea Gas Corporation, better known as Kogas, aims to bid for the operating stake as part of a consortium with Japan Petroleum Exploration and InterOil's Japanese condensate stripping plant partner Mitsui.
"Kogas has formed a consortium jointly with Mitsui and JAPEX to participate in Papua New Guinea's $US5.4 billion InterOil LNG project," a Korean government official reportedly said.
"Currently the Papua New Guinean government is working on selecting development partners and detailed terms of the deal, with the production time set at the end of 2017."
The combined bidding interest was flagged by Prime Minister Peter O'Neill months ago, with local media reporting it as the Far East Consortium while investors have since coined it "JKM".
InterOil chief executive officer Phil Mulacek confirmed and commented on the bidder to PNGIndustryNews.net back in March.
"They are there and they are very interested," he said.
"It's a strong consortium - it represents the largest single buyer, Kogas in Korea and a lot of Japanese interest so it's the two largest LNG markets joining together - I feel that's a positive."
Governor General Sir Michael Ogio revealed on Tuesday that the PNG government would establish a negotiating team which would work with the state-owned Gulf LNG partner Petromin to "ensure the best gas agreement" outcome.
PNGIndustryNews.net has not been able to find out much more at this stage, other than a Port Moresby-based source's observation that of late some high-paid lawyers have been flown over from Sydney by the government.
While Royal Dutch Shell had talks with InterOil over the project, an industry source previously told PNGIndustryNews.net that Shell was not in an "ongoing discussion" with InterOil.
More recently, a Shell media spokesperson spoke of the PNG government's view and stressed how the oil major considered any potential project investment among other opportunities.
"The government of PNG has identified Shell as the preferred partner with the government energy company Petromin for the potential development of future LNG projects because of Shell's capability and PNG's desire to bring such capacity into the country," she told PNGIndustryNews.net this week.
"As a result of our discussions with both the PNG government and Petromin we have looked at a number of potential opportunities in PNG, including the InterOil project.
"We have had discussions from time to time with InterOil about their assets. Any future Shell participation in InterOil's assets would require the opportunity to meet specific investment criteria and compete with other LNG options."
InterOil first launched its formal process to find a government-acceptable, world recognised LNG operator for the project back in October, on the back of criticism from Petroleum and Energy Minister William Duma.
The time lost on this hunt has hit project timelines.
The Korean media report's "end of 2017" date for first exports follows Mulacek's comments from a recent conference call when he said it would be late 2015 or early 2016, "depending on the partner".
As of last year, the Gulf LNG project was targeting 5 million tonnes per annum in 2014, with 3Mtpa from an Energy World Corporation-designed onshore modular LNG plant in Gulf province and the rest from a floating LNG facility.
There is also a proposed ramp-up aiming to hit up to 8Mtpa from the total project through 2015 and 2016.
In 2009, the project was based on a 7.6-10.6Mtpa LNG plant near Port Moresby, back when it was known as the Liquid Niugini Gas project.
While he is against a phased development approach, Duma has indicated he is comfortable with the LNG plant being based in Gulf province, which is home to InterOil's Elk-Antelope discoveries that underpin the project.