The NSW government has commended AGL Energy's decision to suspend an expansion of its contentious coal seam gas (CSG) operations in southwest Sydney due to community concerns.
AGL has requested the NSW Department of Planning and Infrastructure suspend its assessment of the company's proposed expansion of Camden gas project.
"AGL understands that there are some members of the community who are concerned about the current proposal and we believe that this suspension will allow us to consider those community concerns," AGL's general manager of upstream gas Mike Moraza said in a statement on Friday.
NSW Minister for Resources and Energy Hartcher Chris Hartcher said AGL's request showed it was willing to listen and work with the local community.
"Though a commercial decision of the company, the NSW government commends AGL on its commitment to community engagement and ensuring that the concerns of the local community are addressed," he said.
A public hearing on the expansion due to be held on February 25 has also been postponed.
Opponents to CSG operations in the Sydney region argue that the practice endangers the city's drinking water.
AGL has been producing CSG at Camden since 2001 with the operations providing about five per cent of NSW's natural gas needs.
Shares in AGL were one cent higher at $15.33 at 1016 AEDT.