According to The National, a joint submission by Petroleum and Energy Minister William Duma and Public Enterprises Minister Sir Mekere Morauta estimated the project was worth between $US5-10 billion.
Deputy Prime Minister Belden Namah reportedly said the hydropower scheme could bring electricity to hundreds of thousands of people in the Gulf, Western and Central provinces.
The proposal is reportedly a partnership between the PNG government and a 50-50 joint venture between the Ok Tedi Mining Limited-associated PNG Sustainable Development Program and Australian utility Origin Energy.
Preliminary studies revealed the project could generate up to 2500 megawatts of electricity - reportedly almost four times PNG's present generating capacity.
The possible export of electricity to Australia was also flagged while up to 300,000 families in PNG are expected to benefit if the project is developed and becomes fully operational.
Such a power scheme could offer more electricity options to various mining projects in the country as well, including Gold Anomaly's Crater Mountain project.
While the Porgera mine taps into electricity from the Oil Search-run Hides Gas to Electricity plant, and the Lihir mine can tap into some geothermal power, most operations overly rely on increasingly expensive diesel-fired electricity.
There are also power opportunities emerging from the gas resources discovered in PNG's Western Province - which is already under consideration by the Xstrata-led Frieda River copper-gold project.