(Reuters) - ExxonMobil Corp XOM.N said on Thursday it would buy InterOil Corp IOC.N for more than $2.5 billion in stock, adding a gas field to expand exports from Papua New Guinea and better positioning it to meet Asian demand for liquified natural gas.

The logo of Down Jones Industrial Average stock market index listed company Exxon Mobil is seen in Encinitas, California April 4, 2016. REUTERS/Mike Blake

Oil majors are targeting Papua New Guinea for growth as the quality of its gas, low costs and proximity to Asia’s big LNG consumers make it one of the most attractive places to develop projects following a collapse in oil and gas prices.

“I think (the deal) shows that Exxon views LNG as a very strong growth business. I believe that LNG demand over time will grow faster than oil,” said Brian Youngberg, oil analyst with Edward Jones in Saint Louis.

Exxon sealed the deal for InterOil after Australia's Oil Search Ltd OSH.AX said earlier on Thursday that it would not pay more than the $2.2 billion it offered in May, a proposal that was backed by French giant Total SA TOTF.PA.

InterOil owns a 36.5 percent stake in the Elk-Antelope gas field, which is operated by Total. The acquisition will give Exxon interests in six licenses in Papua New Guinea covering about four million acres.

Oil Search said it and Total agreed that letting Exxon take over would help speed up development of the Elk-Antelope field.

Exxon said it would pay InterOil shareholders $45 per share in stock and that it would also make an additional cash payment based on the size of the Elk-Antelope field.

That payment is worth $7.07 per share for each trillion cubic feet equivalent (tcfe) of certified gross resource from the field above 6.2 tcfe and up to a maximum of 10 tcfe.

Exxon said it would evaluate processing of gas from the Elk-Antelope field by expanding its LNG export plant in Papua New Guinea. Oil Search also owns a stake in the LNG plant.

The plant is a 6.9 million ton per annum integrated project operated by Exxon. The gas is sourced from seven fields and Elk-Antelope gas could be used to feed an expansion.

“It will be interesting to watch how Exxon pursues the development of InterOil’s gas resources. Will it be by expanding the existing LNG plant already operating in the country, or building a brand-new project?,” said Pavel Molchanov, an energy analyst with Raymond James.

Credit Suisse (Australia) Ltd, Morgan Stanley and UBS are InterOil’s financial advisers, while Wachtell, Lipton, Rosen & Katz and Goodmans provided legal advice.

Davis Polk & Wardwell LLP and Blake, Cassels & Graydon LLP are Exxon’s legal advisers.