* Temporary order halts work on east Texas property
* Latest of several landowner disputes with TransCanada
* Pipeline is southern leg of company's Keystone XL project
HOUSTON, Dec 11 (Reuters) - A Texas judge has ordered TransCanada Corp to halt work temporarily on a pipeline to carry heavy crude oil from Oklahoma to Texas refineries on the property of a local landowner who has sued the pipeline operator for fraud.
Texas County Court at Law Judge Jack Sinz in Nacogdoches County on Friday signed a temporary restraining order to stop TransCanada from building a pipeline across the property of Michael Bishop in east Texas, about 150 miles (241 km) northeast of Houston. Sinz said there was "sufficient cause" to halt work on Bishop's 20-acre (8 hectare) property until a planned Dec. 19 hearing.
The judge's action is the latest of several landowner disputes that could prove troublesome for TransCanada. In February, another Texas judge temporarily halted pipeline work in northeast Texas due to archaeological concerns.
The U.S. Army Corps of Engineers gave a permit in July to the $2.3 billion Gulf Coast Project, which will carry 700,000 barrels of crude per day from the Cushing, Oklahoma, storage hub to Houston.
There have been sporadic pipeline protests across Texas, including demonstrators who chained themselves to machinery and suspended themselves from trees in the path of the pipeline in east Texas in November. Actress Daryl Hannah was arrested along with a Texas landowner in October for attempting to block a bulldozer from clearing land for the pipeline.
According to Bishop, a 64-year-old ex-Marine and medical student, the material to be carried on the pipeline is not crude oil but diluted bitumen, which does not meet the conditions of TransCanada's permits.
"I'm a former Marine," Bishop told reporters on a conference call. "I ain't run from a fight in my life, my friend, and I damn sure ain't running from this one."
Bishop, who is representing himself in the case, is also challenging whether TransCanada, Canada's largest pipeline company, can use eminent domain to condemn private land for pipeline construction.
Bishop cited 2009 changes to Texas's eminent domain law that specify that the law can be used only for public projects. "Here we have a private foreign corporation taking sovereign taxpayer land away from them under the guise of eminent domain," he said.
TransCanada said it has begun construction on Bishop's property, and that he signed an easement allowing TransCanada access to the property three weeks ago.
"Mr. Bishop's request does not impact overall construction, and we are on track to bring this pipeline into operation in late 2013," the company said in a statement. Bishop said he had signed the easement, but said he acted "under coercion and duress".
The pipeline is the southern leg of the Alberta-to-Houston Keystone XL project, which TransCanada split in two after U.S. President Barack Obama refused to approve the project last year because of environmental concerns.
The company expects a U.S. decision on whether the remaining portion of the line can be built to come early next year.