SYDNEY, March 14 (Reuters) - Construction of an A$800 million ($605 million) pipeline that could ease a looming gas shortage in eastern Australia faces delays in securing approvals, but its owner still aims to complete it by 2018.
Jemena, owned by State Grid Corp of China and Singapore Power, was chosen by the Northern Territory government in late 2015 to build the 622 km (386 mile) pipeline from northern Austraia to Queensland state but has yet to begin construction.
The pipeline from Tennant Creek to Mount Isa is seen as crucial to unlocking vast gas resources to help supply eastern Australia, but is awaiting government approvals and clearance from indigenous and other landowners.
"We can start soon-ish - I'm hoping within the next couple of months," Jemena Managing Director Paul Adams told Reuters on the sidelines of the Australian Domestic Gas Outlook conference.
To work around the delays, the company plans to start building compressors and a processing plant, holding off on construction of the pipeline, athough it still aims to complete the project by the end of 2018.
Adams wants to ensure Jemena has backing from individual indigenous landowners, rather than just relying on indigenous land councils, an issue that has delayed mining projects in other states.
"I can't see a show-stopper," Adams said.
Some two-thirds of gas production in eastern Australia is being sucked into three new liquefied natural gas plants for export, tightening supply for industrial gas users and pushing up local gas prices.
Adams said Jemena is in talks with a number of potential gas suppliers, but declined to comment on how much gas it has secured for the pipeline.
"One thing we know is there's huge demand," he said.
Australia's energy market operator warned last week that the eastern markets face a shortage of gas by 2019 which will either lead to power outages, due to inadequate gas-fired generation, or result in gas supply cuts to homes and businesses. opportunities for Jemena's Northern Gas Pipeline will depend on the Northern Territory lifting a moratorium on fracking, which the territory government is reviewing this year.
($1 = 1.3224 Australian dollars)