SYDNEY (AFP) - A ferry is believed to have sunk in bad weather off Papua New Guinea with as many as 350 people on board, its operator said, adding that some survivors have been found.
Star Ships said it lost contact with the MV Rabaul Queen at about 6am on Thursday (2000 GMT Wednesday) while travelling between Kimbe and Lae in the east of the Pacific nation.
"Bad weather, I think (it is) believed to have sunk," Star Ships spokesman John Whitney told AFP, adding that there were up to 350 on board.
"(There are) survivors. At the moment rescuers from Australia are at the site. No fatalities have been reported yet."
Australia's foreign office said it "has responded to a request for assistance by arranging for aircraft to overfly the area, and will respond to other requests".
"The shipping company advises that they do not believe that there were any foreigners on board, but our High Commission (embassy) is seeking to confirm this, including whether any dual nationals may have been affected," a foreign office spokeswoman said.
"The government of Papua New Guinea is managing the response to this incident. Local rescue efforts are currently under way."
PNG's National Maritime Safety Authority (NMSA) said the ship had capsized but it was awaiting more details from officials at the site.
"We don't have any accurate information as yet, a search and rescue team went out early this morning but they haven't got back to us yet," a spokeswoman said.
Martin Mosi, head of the National Disaster Centre, said two helicopters and a ship had been dispatched to search the area in addition to the two search and rescue vessels sent out by the NMSA. He was awaiting word on casualties.
Mosi said it was "very difficult to say" what the cause may have been.
"Is it weather, is it overloading or is it something to do with the vessel itself? We do not know but that will certainly come to light very soon," he added.
Star Ships, among PNG's largest passenger ship operators, runs regular services to the nation's outlying islands including to New Britain's Kimbe, a popular dive site that attracts tourists from across the world.
RESCUE crews in Papua New Guinea have rescued 28 people from the water after a ferry sank with as many 350 on board along the nation's east coast.
The MV Rabaul Queen went missing at about 8.30am (AEDT) when travelling between Lae and the West New Britain town of Kimbe today, PNG's National Maritime Safety Authority (NMSA) said.
Rescue co-ordinator Captain Nurur Rahman said four merchant ships were diverted to the scene by Australian authorities to help with the rescue.
"They have rescued 28 people who are now on board one vessel," Captain Rahman said.
"I cannot confirm or deny the 350 missing number, it is hearsay. I have not seen the manifest as yet, but it is likely around 300."
Captain Rahman said he was being fed information from a NMSA agent on board one of the ships.
"The dynamics of this thing are changing all the time, minute by minute," he said.
Earlier, a NMSA spokesperson told AAP two helicopters from Lae have also joined the operation.
NMSA rescue co-ordinator Fred Siroi said he would make a public statement later in the day.
Australian diplomatic staff are monitoring the situation but there have so far been no reports of Australians on board.
Ship operator Star Ships could not be reached for comment.
Australian Prime Minister Julia Gillard says there is likely to be a very high loss of life from a ferry sinking in Papua New Guinea.
"This is obviously a major tragedy," she said.
"We have been asked to provide assistance to PNG and we are providing assistance to PNG."
Ms Gillard did not elaborate on the assistance.
Australian officials were also working to ascertain whether there were any Australians on board, she said.
"But given the likely very high loss of life here I think when this news comes to the attention of Australians around the country they will be thinking about the people of PNG as they respond to this tragedy," she said.