The NSW government has given the green light to a $250 million gas terminal at Port Kembla, near Wollongong.
The terminal will see a new berth built at Port Kembla to accommodate liquefied national gas carriers, a floating gas handling facility, wharf infrastructure and a pipeline that integrates with the east coast gas network.
It is expected to create 150 jobs during construction and 50 jobs once operational.
The new terminal could help lower gas bills in the future, Deputy Premier John Barilaro said.
"This terminal will make the state of NSW more self-sufficient when it comes to energy, and will create greater access to the global gas market," he said in a statement on Monday.
NSW currently sources 95 per cent of its gas from interstate sources, Minister for Planning Rob Stokes said.
The terminal could supply 70 per cent of the state's gas needs.
"The project will enhance gas supply capacity - relieving gas price pressure for families and businesses across the state," Mr Stokes said in a statement on Monday.
The project will be built by Australian Industrial Energy (AIE), a consortium made up of Andrew Forrest's Squadron Energy and two Japanese businesses.
The development approval paved the way for a new source of gas in time to avert expected gas supply shortages, the AIE said in a statement on Monday.
The AIE said 33,000 businesses, 300,000 jobs and more than one million homes in NSW depend on a reliable supply of natural gas, but shortages are forecast to impact existing east coast supplies.
The terminal's first gas is scheduled for late 2020.
