Karen Michelmore, Darwin – Players in the multi-billion dollar Timor Gas treaty are hopeful of an outcome within weeks, as negotiations drag on.

Northern Territory Chief Minister Clare Martin today said she was confident the federal government would soon ratify a treaty with East Timor on sharing royalties from the project.

It follows reports delays in the ratification were threatening the $3.5 billion Bayu-Undan natural gas project.

Ratification of the treaty is a key condition of petroleum giant ConocoPhillips' three million tonne per year Liquefied Natural Gas (LNG) contract with two Japanese customers.

"I spoke to the Foreign Minister Alexander Downer in Adelaide just a week-and-a-half ago ... and he's confident that that treaty will pass through parliament," Ms Martin told reporters.

"So that important ... ratification of the treaty for Phillips to make that investment decision about LNG and the pipe from Bayu-Undan will be able to go ahead. "I'm very confident it will happen."

ConocoPhillips Darwin area manager Blair Murphy today played down media reports that the project was approaching "crunch time", saying the company was "just taking it day by day".

"We are waiting to see how the approval process goes ... to say that we are going to look at it next week and look to cancel it is probably too strong," Mr Murphy said. "We are hopeful that something will happen soon."

ConocoPhillips in 2001 struck a deal with Tokyo Electric Power Company and Tokyo Gas for LNG from the Bayu-Undan field from 2006.

Under the Timor Gas Treaty, already agreed by Australia and East Timor, the struggling new nation would get 90 per cent of the royalties from the Bayu-Undan project.

But ratification has been delayed as Australia attempts to wrap up a separate unitisation deal, protecting its interest in the lucrative Greater Sunrise field.

A spokesman for Mr Downer said talks between Australian and East Timorese officials were continuing.

"We are hopeful it will be resolved very soon," he said. "We are encouraged by the tone of the latest talks. I think we can finalise those very soon. We are hopeful that we can wrap up the negotiations without another meeting.

"If we haven't wrapped it up in the next week or couple of weeks, we will possibly have another meeting in mid-February. But ... it could be actually wrapped up before the next meeting," the spokesman said.