The company behind plans to drill for gas off the coast of Newcastle and Central Coast believes it can greatly help Australia's energy needs.
Advent Energy managing director David Breeze said gas was a "critical component" of the federal government's plan for an economic recovery from the pandemic.
Mr Breeze said the east coast gas shortage would continue "unless there's action taken to source more gas at an effective price".
A community campaign is fighting to stop gas rigs being built off the coast by urging the federal government not to renew Petroleum Exploration Permit 11, which covers 4500 square kilometres of ocean from Port Stephens to Central Coast.
Advent Energy has applied to extend the permit for a further "two years".
"It enables us to then proceed to the drilling program. We've not submitted the drilling design program to the government because you can't do that until you've got the extension on the permit," Mr Breeze said.
Advent plans to drill a well about 2200 metres deep about "22 kilometres off Munmorah". "It's called Baleen. The drilling target we're looking at is about 6000 acres."
Whether further wells would be drilled "depends whether it all drains into that one hole".
Mr Breeze said the well to be drilled would be deepened to "determine the suitability of the rock for carbon capture and storage".
"Rather than just drilling to the target depth of 2200 metres, you would drill down to 3000 or 4000 metres because that's where the potential carbon storage areas are. Double the depth of the well is double the cost of the well."
This would mean a $40 million investment, adding to the $25 million spent on exploratory drilling off Newcastle in 2010.
Federal Resources Minister Keith Pitt told the Newcastle Herald last week that he would prefer to make a decision soon on the permit, while highlighting that "any rig is unlikely to be visible from the coast".
Mr Pitt released another statement on Tuesday, saying "developing Australia's gas reserves will help secure our energy future as well as delivering further economic benefits".
He added that unlocking Australia's "vast gas supplies to meet our domestic gas demand well into the future" would create "thousands of jobs around the country, mainly in regional areas".
He made the comments in response to an Australian Competition and Consumer Commission gas inquiry report.
ACCC chair Rod Sims said it was concerning that "the risk of a gas supply shortfall in Australia's southern states continues, despite this having been a looming issue for some time".
"There are new sources of supply and related infrastructure that could be brought online to avoid a potential shortfall. It is crucial that investment decisions are made now to ensure there's enough supply, and to provide downward pressure on future price rises," Mr Sims said.
Advent Energy conducted exploratory drilling in 2010, but did not find gas.
However, Mr Breeze said a sampling program had shown "primary indications of gas coming out of the sea floor".
"We've sampled over 30 points offshore of Newcastle and gas has been shown in all of those samples," he said.
"It's between Port Stephens and the Central Coast, which is where the primary targets are." He said Australia had "world-class stringent environmental conditions" for gas drilling. "We conducted the exploratory drilling in 2010 quite safely."