Santos pushing ahead with deal to power proposed Perdaman Narrabri fertiliser factory

The gas giant signed a deal Perdaman, announcing it would carry out further engineering and design studies to advance the development, which would be powered by the yet-to-be approved Narrabri Gas Project.

Perdaman said the plant could to support up to 700 jobs during construction, and sustain 100 direct and 100 indirect ongoing jobs during operations.

"I hope the Narrabri Gas Project will proceed to a final investment decision as soon as possible to give certainty to this project and attract more to the region," Perdaman managing director Vikas Rambal said.

"If our plant goes ahead it will not only bring new jobs but competition, which is always good for prices, to the market in NSW and that will be good for farmers in the region."

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North West Alliance spokeswoman Margaret Fleck was sceptical of the project and saw it as a blatant attempt to manipulate the approval of the Narrabri Gas Project by spruiking benefits.

She said demand for ammonium was falling, with data from the Australian Bureau of Statistics showing a 17 per cent fall in the past seven years.

"You will not find ammonium nitrate for sale in ag supply shops in the North West; farmers out here simply do not use it as it is highly regulated and classified as security sensitive, and twice as expensive as urea, which performs the same role," she said.

"Santos and Perdaman's claims that fertiliser it could produce would benefit farmers of this region are cynical and ignorant.

"There is little to suggest there is anything genuine about this proposal, it should be viewed as another attempt to manipulate for the approval of risky and controversial Narrabri Gas Project."

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Santos CEO Kevin Gallager said the Narrabri Gas Project and the Perdaman fertiliser plant would be a boost for small businesses and communities around Narrabri.

"The project will generate substantial economic revenue and employment opportunities for New South Wales, Narrabri and the surrounding region," Mr Gallagher said.