The state government has committed to injecting an additional 70 petajoules (PJ) of gas per annum into the east coast market in return for $3 billion from the Commonwealth government.

NSW Premier Gladys Berejiklian flagged two possibilities to supply the gas; import it or source it from the yet-to-be-approved Santos Narrabri Gas Project, which will create 70 PJ a year.

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Shooters, Fishers and Farmers Barwon MP Roy Butler opposes the Santos project due to its risks to groundwater.

He said the "gas shortage" was a manufactured crisis, created by a lack of federal leadership to introduce gas export restrictions.

"Right now, there is an international gas glut pushing prices down, yet our eastern domestic market is paying through the nose with the highest prices in the world," Mr Butler said.

"We are staring down the barrel of mining gas, liquefying it for transport, sending it overseas, where it will be turned back into gas, then back in to liquid and shipped back here. It's ridiculous."

Mr Butler said the deal created the perception the Commonwealth was bribing the state government to approve the controversial Narrabri gas project.

"They have absolutely corroded the independent process," he said.

"Regardless of the good intentions and the upstanding integrity of the Independent Planning Commission, if the project is approved,the perception will always be they dangled $3 billion in front of them to get the approval."

Mullaley farmer Margaret Fleck, whose property is close to the proposed Santos gasfield, described the deal as a "flat-out bribe".

"We're just gutted by this betrayal," she said.

"This represents a massive risk to our groundwater and seems designed to subvert proper processes and preempt a decision from the NSW Independent Planning Commission."

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