With InDesign's packaging function no image will be converted to JPG.
But why do you want to send an open INDD to the printer. Export a PDF and send this to the printer.
^Right. InDesign's Package routine isn't capable of image format conversions, so something else is in play. Questions:
What version of InDesign?
Are the images linked or embedded?
In detail, what are you doing; how are you doing it; what is the result; and how/where/when are you finding and confirming the undesired conversion(s)?
The only way I can conceive of that would result in a 1.2 GB file is embedding the graphics. This is a recipe for disaster but if you've done that, why do you need to package it?
They'd also need the fonts.
You can unembed all the graphics easily though.
Wish it was called "Archive" instead of "Package" as nobody really sends native files to printers, or at least they shouldn't.
PDF is the file format to supply.