It follows confirmation Oil Search has acquired a 22.8% interest in the Elk-Antelope gas discovery from Pacific LNG Group Companies, funded through the placement of 149.9 million shares to the PNG government.
A final ownership structure will be agreed with the joint venture participants, but InterOil said the new arrangement created a stable and sustainable partnership to connect the gas deposit to growing demand in Asia.
CEO Dr Michael Hession said: "Oil Search is a logical partner for us in developing these large gas resources.
"The company has decades of experience in PNG and is nearing production from PNG LNG," he added.
"It is exceptionally rewarding to know that someone as experienced as Oil Search shares our view of the worth of this resource.
"This not only validates the value of this world class asset in Elk-Antelope but acknowledges the upside in this asset and the surrounding acreage.
"This partnership will enable us to tap these energy resources more quickly and cost-effectively -and that translates into real financial benefits for Papua New Guinea and the shareholders of the companies involved."
Hession said the company welcomed Oil Search into the development of Elk-Antelope with Total, and looked forward to an even closer cooperation with the people and government of Papua New Guinea in the years ahead.
"This project and the partnership have the clear backing of the government, ensuring we have a strong and stable foundation to deliver on this outstanding long-term project," he added.