Australia Provincial Govt Approves Start Of $600 MM Gas Pipeline


SYDNEY, June 8 (Reuters) - The government of Australia's Northern Territory on Thursday gave the go-ahead to start building an A$800 million ($600 million) gas pipeline that could help ease a shortage of the commodity in the country's east.

Jemena, owned by State Grid Corp of China and Singapore Power, was given permission to build the westernmost portion of the 622 km (386 mile) line designed to join gasfields in northern Australia with the eastern state of Queensland.

Australia is the world's second-largest liquefied natural gas (LNG) exporter, but has faced a growing crisis over local gas supply with prices rocketing over the past two years as the commodity is shipped abroad.

"Jemena has indicated that it will start construction ... as soon as practicable to take advantage of the dry season," Northern Territory Minister for Resources Ken Vowles said in a statement, referring to the drier months between May and October. The initial portion will be over 340 km long.

Further sections still require approval from landholders and the Queensland state government.

Jemena was not immediately available for comment. The company had previously said it planned to begin construction of a compressor station, for which it has already won approval, in May, and that it may eventually extend the pipeline.

(Reporting by Tom Westbrook; Editing by Joseph Radford)


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