Previously an in-house study identified a large gas resource ready for commercialisation, according to Sydney Gas.
Chief executive Bruce Butcher said the company had been working for several months with merchant bank Cappello Group Inc, which has extensive knowledge and experience of the energy sector in California.
"It is expected that the results from this feasibility study will broaden the range of options that Sydney Gas has to commercialise its operations within the Hunter Gas Project and exploit the very large gas resource that we have identified there," Butcher said.
Sydney Gas plans to develop the Hunter gas project over the next five years. It is aimed at producing up to 40PJ of gas per year to the Muswellbrook-Singleton and Newcastle regions over the next 15 to 20 years.