The aim of the study is to develop a roadmap for the promotion and development of a gas industry in north-east New South Wales. Currently the only known gas reserves within the region are located in PEL 238 near Narrabri, and are 100% owned by Eastern Star Gas and its subsidiaries. Narrabri Shire Council and Eastern Star Gas are also sponsors of the study.

"The study will report on the regional markets for such energy, provide options to overcome physical and regulatory constraints to further exploration and address those significant factors that frustrate the servicing of potential markets in the region," said Acting Minister for Resources Joe Hockey.

"The study represents our first real examination of all factors involved in establishing a gas supply from sources within the region. It will consider issues such as resource potential and infrastructure gaps, in an effort to maximize the development potential of local natural gas and coal-bed methane."

Eastern Star Gas has discovered NSW's first commercial gas reserves in the Coonarah Gas Field, located about 20km west of Narrabri and is assessing two other conventional gas fields within its 9000 sq.km PEL 238.