“Santos believes it has in place a highly attractive compensation arrangements for NSW landholders,” the Narrabri CSG project operator said in its submission to the Independent Pricing and Regulatory Tribunal earlier this month.

“During the exploration phase a private-landholder will receive in excess of $30,000 per annum upfront. During the production phase a landholder will share in the benefits of the project by way of a compensation pool based on the royalties paid. We estimate a famer with four wells on his or her property would receive $100,000 per annum [or over $1 million over ten years].”

The IPRT review into landholder benchmark compensation rates for gas exploration and production was triggered by NSW Chief Scientist Mary O'Kane’s call last year for the government to ensure a "fair and appropriate" compensation system.

Santos general manager energy Peter Mitchley defended the existing regime for striking the right balance.

“The compensation regime is site specific and reflects the relative value of the land,” he said last week.

“Santos will only drill on private land when the landholder is happy to host our activities. The compensation framework that Santos has in place was developed in consultation with government, farming groups and landholders and provides a generous income stream for those landholders who chose to host our activities.

“In addition, should the Narrabri Gas Project go ahead, the broader Narrabri community will benefit from a $160 million Regional Community Benefit Fund that will support major regional projects and infrastructure so the area can continue to directly benefit from hosting our activities.”

The Greens are not enthusiastic about the compensation arrangements.

"Although the payments may appear generous, when the disruption, potential environmental damage and lower property values are factored in, it does not stack up," Greens MP Jeremy Buckingham said according to Fairfax Media.