The ongoing freeze, which has already set CSG exploration back for interstate gas-dependent NSW, is being applied to the award of petroleum exploration licence applications and petroleum special prospecting authority applications.
"The six-month freeze announced by the NSW government on 26 March 2014 will be extended to 26 September 2015," the state government said.
Resources and Energy Minister Anthony Roberts said the extension would provide the Office of Coal Seam Gas more time to examine existing PELAs and review the licence application process.
"The former Labor government handed out 39 petroleum exploration licences in a careless and clumsy fashion with little oversight. NSW deserved better," Roberts said.
"The NSW Liberals and Nationals government has put in place the most comprehensive regulations for the CSG industry in the country.
"These regulations ensure that gas extraction from coal seams is done in a way that is safe and has minimal impacts on the environment and other industries.
"The framework also ensures that companies involved in the NSW gas industry meet the highest standards of technical expertise and financial capability to undertake exploration."
The Australian Petroleum Production and Exploration Association was dismayed with the news.
"The announcement comes just days after the federal government released its draft Energy White Paper that specifically flagged the need for an urgent uplift in NSW gas production - a call that has been backed by a wide coalition of business and manufacturing bodies in NSW and more widely," the industry group said.
"It also appears the announcement is set to be made just days ahead of the NSW chief scientist's report into the science of gas development in NSW - sending a message to industry and third parties that such policy announcements are made independent of scientific consideration."
APPEA outlined the gas shortage-facing environment that NSW was increasingly facing.
"NSW consumes around a quarter of the gas used in the eastern Australia gas market, yet supplies only about 1% of the gas production for that market," APPEA said.
"The state's 1.3 million gas customers rely on interstate producers for 95% of their supply, despite the state possessing very significant reserves and experienced gas companies willing and able to produce local gas for local consumers.
"NSW regulated gas prices are increasing by more than 10% this year.
"New production depends upon successful exploration activity. And without new exploration and production in NSW, it will be very difficult to put downward pressure on NSW gas prices."
The NSW government has refused 10 PELAs since March.
