State government endorsement for the $3bn Narrabri gas project is a "pleasing development" according to a business group, and one that couldn't come sooner.
The project "had to be approved by 2020", said Business NSW Regional Manager Joe Townsend.
Mr Townsend said NSW is facing a gas shortage that could drive up costs, force businesses to close and exacerbate the COVID-19 recession.
"This project is urgently needed to secure the supply of gas for NSW homes and businesses, with real fears about the reliability and price of supply to the Eastern seaboard," he said.
"It has been a long time coming because it is a complex piece of infrastructure, but it is pleasing to see the NSW Government make good on their commitments during the pandemic of supporting jobs and businesses."
Business NSW pointed to a report they issued last year which it said showed the state would face running out of gas without approval for new extraction by 2020.
NSW Coordinator for Lock the Gate Georgina Woods said the gas shortage exists only because Australia exports most of its resource.
"The shortage depends on where you're standing," she said.
"Eastern Australia is producing more gas than ever before, we are producing record quantities of gas.
"The problem is that Santos has promised to sell Australian gas to other countries."
Australia is the world's largest exporter of gas.
The Santos project would build 850 coal seam gas wells, many of them in the Pilliga state forest.
On Friday the NSW Department of Planning endorsed the project as "approvable".
That has started a clock at the Independent Planning Commission, which must make a decision to approve or reject the project within 12 weeks.
The mine is one of the most controversial projects in the state, with a record 22,485 objections to the scheme's DA.
Opponents oppose the mine on a number of grounds, saying it will contribute to climate change, and threatens the region's ground water among other complaints.
Independent MLC Justin Field, who sponsored a bill in NSW Parliament that would have halted the project, said it was "almost certain" that the campaign against the project would continue through the IPC process potentially to physical direct action to halt construction.