The disaster happened at 7:00 a.m. (Australian Eastern Daylight Time) on Tuesday near Tari in the Southern Highlands.
The landslide is near one of the main work sites for the ExxonMobil-led LNG project, northwest of the nation`s capital city of Port Moresby.
International oil and gas company ExxonMobil says all its staff have been accounted for.
According to PNG media reports, dozens of people have been buried in the landslide, and 40 bodies recovered, but another 20 people remain missing. The landslide left a destructive track of over two kilometers, cutting roads to nearby villages.
The director of PNG`s National Disaster Center, Martin Mosi told the AAP there were settlements close to the otherwise remote site near Mendi, in the central part of the country, and he feared lives had been lost.
"Most likely lives have been lost, we cannot tell how many," he said.
"There were villages - settlements - where the landslide covered."
It was reported that the landslide completely engulfed two villages while people were sleeping.
Officials from the National Disaster Center are heading to the area on Wednesday to assess the damage.
PNG Prime Minister Peter O`Neill is expect to travel to Tari on Wednesday to visit the site.(*)