Tensions have been rising for some time over government delays.
Now they have been pushed to a head with the death of Tuguba Chief Himuni Homoko, whose clan members say died too young, fighting for justice for his people.
The landowners have put a petition to government and they say they want action immediately.
Presenter: Jemima Garrett, Pacific Business and Economic reporter
Speaker: Sir Alfred Kaiabe, spokesperson for the Tuguba clans from the Hela region of the PNG highlands; Chief Kingsford Uruliwa from Juha; Chief Tara Liyabe from Angore; Sir Arnold Ahmet, PNG's Attorney-General
GARRETT: The PNG LNG project is of critical importance to Papua New Guinea - at 15 billion dollars it is by far the biggest investment ever and if all goes according to plan it is expected to double the country's GDP.
The benefits sharing arrangements are complex involving royalties and equity payments, infrastructure and seed capital for landowners businesses.
These are rivers of gold to fight over.
The main umbrella agreement - the Kokopo agreement - signed in May 2009 was co-ordinated by the PNG government. It took thousands of participants 6 weeks to negotiate.
But it is rejected by the 26 Tuguba clans from the Hela region in the PNG highlands, whose Chief Himuni Homoko, died earlier this month.
Former MP Sir Alfred Kaiabe is their spokesperson.
KAIABE: There was formal introduction on the first day and then what followed was behind the doors dealing. This agreement that they say was signed in Kokopo was cooked up in Port Moresby like a ready made kit house, fitted together in Kokopo, and then forced down the reluctant throats of people to sign. We never read the contents. there was no consensus ad aidem and that is a fundamental principle of contract law.
GARRETT: The Hela region is rugged and remote. It's people lack basic services such as schools aid posts and electricity and they have missed out in past dealings with resource developers, such the Porgera gold mine, which uses Hela gas for power, without providing any electricty to landowners.
Chief Kingsford Uruliwa from Juha says he speaks for 30,000 people.
URULIWA: In Papua New Guinea, in Hela region, we don't have too many educated people, so government at the moment is controlled by Sepik's, New Guinea Highlands, Southern region, since we do not have enough literate people those people just come in and claim our project as their sole property and dig out and consume what is in that project. We were overlooked. That is why we are raising that, just like a cry, for awareness up, for the world to hear our cry.
GARRETT: It is not just the Tuguba who say their legitimate claims are being ignored - Chief Tara Liyabe from Angore is the head of 26 clans. Like the Tuguba, he says his people angry about social mapping on the PNG LNG project, delays by the government in the payment of seed capital and make up of Kokopo agreement.
LIYABE: If the government doesn't come into my booth and stay with me and listen to my grievance, then, there will be another Bougainville. Why I say this is because gas is in my land, it is on the customary land and if the government still persisting on againsting me, and interference in the project all the time, then the project will come to a halt. We will stop the project. Project will never operate without our signature in the agreement.
GARRETT: Do you want to see the project go ahead? Do you want to see these problems solved?
LIBAYE: I am happy with the project. I am happy the project. i am happy with the Exxon Mobil and the project must continue but my intention here is that if Papua New Guinea government look into my matter - the difficulties that I have then the project will continue. If PNG govt persist on listening to me then the project will not continue.
GARRETT: On the 12th April the Tuguba Chiefs placed a 2 page ad in the National newspaper outlining their grievances.
The PNG Government realises it is under pressure.
Attorney-General Sir Arnold Ahmet says it must do more.
AHMET: All those resource sector agencies just need considerable increase in capacity of personnel, PR personnel, technical people ..to be on the ground to manage this landowner, resource owner expectations, considerable expectations.
GARRETT: People in the highlands are in favour of the project but they are very angry at the government for the delay in getting seed capital for the business development grants to them, they have issues about Memorandum of Agreement money. They are now saying they will close the project if they do not get action. Why is the government so slow in handling these issues?
AHMET: I think several aspects and I alluded to them. One is a major one - that we have been caught, pardon the pun with our pants down. We just haven't got the capacity in the public sector to respond to the huge increase in the construction of this project and, obviously, as a result the company and the developmental partners are importing technical and professional skill onshore. So the challenge for us in the government sector is to ramp that up - increase that. It will take some time - so that we can negotiate that on the ground, the social mapping, the landowner claims and then I think the major next aspect is just our budgetary capacity.
GARRETT: The government has acted - this week Acting Prime Minister Sam Abal announced a process to pay all outstanding Memorandum of Understanding agreements and a better system so more will get approved.
That only goes part of the way to meeting the Tuguba claims.
As they gathered in huge numbers in Port Moresby to mourn their chief, who died unexpectedly in his 50's, their resolve has been hardening.
KAIABE: The late paramount chief was made to follow up these issues because the government and the developer did not address these issues. He was forced to follow this up in the court of law and whilst in the course of pursuing these issues he collapsed and died.
GARRETT: You've just come from the Haus Krai, the traditional mourning before Chief Himoko is buried in the Highlands. Just how angry are people about this issue?
KAIABE: You can only imagine the next course of action the relatives will take but I tell you it will be serious -right. Yes, I have come from the traditional mourning for the late chief. I am going there again - and we have given a petition - they have given a petition to the government which we hope will be addressed and responded to .
GARRETT: Specifically what do you want the government to do?
KAIABE: They are saying all the outstanding issues I have referred to, which are before the government and subsequently the court, to be addressed immediately.
GARRETT: And when you say immediately - what sort of timeframe are you giving the government?
KAIABE: Normally you would want the body to fly home - they are saying we will bury the chief here if these issues are not addressed and when that happens it is serious. So maybe they will give one or two weeks.