Santos chief executive Kevin Gallagher has declared there is "no...

Santos chief executive Kevin Gallagher has declared there is "no place for politics" in the independent planning approvals process for the Narrabri coal seam gas project after NSW Opposition Leader Michael Daley pledged a Labor state government would block the $3 billion investment.

In a video filmed in Coonamble in the weekend and posted on Twitter ahead of the March 23 NSW election, Mr Daley described the Narrabri project as a "special problem".

"If that thing goes ahead there is no guarantee that they will be safe here that their water will be safe," he said, describing the venture as "an unacceptable risk" to water, to farming and indigenous communities.

"If I become the Premier in just under a month's time we will stop this project."


The Narrabri project, which is currently being assessed by the NSW Department of Planning ahead of a decision by the Independent Planning Commission, could supply up to half of NSW's gas needs. Mr Gallagher said last week that customers were lining up to buy gas if it is approved, and flagged a likely decision on the approval in the September quarter. He said jobs in manufacturing in the state were at stake.

"The process has to be comprehensive and robust so the community can be confident in the outcome," Mr Gallagher said.

"There is no place for politics in the independent planning process."

The comments irked gas buyers that have been struggling with high pricesfor the fuel on the east coast, and also fly in the face of the Australian Workers' Union's pro-gas stance.

Weston Energy managing director Garbis Simonian said the statements were "very disappointing" and showed no regard for the consequences of high prices on the manufacturing sector, on jobs and on ordinary consumers.

"Science has confirmed coal seam gas can be extracted safely," he said.

Credit Suisse analyst Saul Kavonic said the project's precarious position "was always at risk of a populist anti-gas announcement during this period", given the local seat is in contention in the lead-up to the state election.

"We value Narrabri potentially worth up to 44¢ a share to Santos, but discount it to just a tiny fraction of that given the social licence issues it faces and that the NSW 'Independent Planning Commission' process may not be all that politically independent," Mr Kavonic said.

Mr Gallagher said it was "very important" to Santos that the environment and water resources are protected, and reiterated the company's pledge that 100 per cent of Narrabri gas would go into the domestic market.

"If NSW doesn't develop gas resources, then the people of NSW will pay more for gas and electricity, and manufacturing jobs will go elsewhere," he said. "Investors will also go elsewhere if the rules keep changing after investments are made."

Mr Kavonic noted that NSW remains the most "gas stranded" state and susceptible to higher longer-term gas prices for industrial users than any other state.

"Narrabri has potential to bring down gas prices for some buyers in NSW and even provide a brief shimmer of hope for new gas-intensive manufacturing on the east coast," he said.

"But those hopes for jobs may be dashed by bipartisan populist opposition to the project."