Papua New Guinea explorer Oil Search Friday said it had bought rival InterOil in a multi-billion-dollar deal, but will sell off some of the assets to French energy giant Total to fund part of the takeover.

Oil Search is to pay $40.25 per share for the U.S.-listed company for a total value of approximately $2.2 billion, as it looks to boost its interests in a key liquefied natural gas (LNG) project under development in resource-rich Papua New Guinea. The Papua LNG Project, which will be operated by Total, includes one of Asia's largest undeveloped gas fields, Elk-Antelope. The deal comes amid expectations that Asian demand for LNG will ramp up in coming years, analysts said. Oil Search, set up in 1929 and with most of its assets in PNG, is already a partner with US oil giant ExxonMobil on a separate project in the Pacific nation.

The massive PNG LNG Project made its first shipment in 2014. Senior analyst John Young from private wealth management firm Ord Minnett told AFP the deal would encourage cooperation between the two projects, and potentially accelerate development of the second.