This is the first time that the State Government has granted development consent over a coalbed methane project in New South Wales.

CEO Bruce Butcher said the long-awaited approval was an important step for Sydney Gas.

"With development consent comes recognition by the New South Wales Government that all environmental and safety procedures concerning the project are in place. Hence, we are now looking to the Department of Mineral Resources to approve the Company's pending application for a production lease under the Petroleum (Onshore) Act 1991 (NSW). In the meantime, Sydney Gas' development program will continue to unfold in keeping with its business plan," he said.