The Narrabri Gas Project has received federal approval, despite concerns for water resources.

Environment Minister Sussan Ley says Santos’ plan to drill up to 850 coal seam gas wells in northern New South Wales will not damage groundwater and biodiversity in the Pilliga Forest.

Ms Ley has approved plans for the $3.6 billion project with a number of conditions to protect the groundwater, including ongoing bore monitoring and modelling.

The conditions also include “cease-work provisions at gas wells where groundwater exceedance is predicted”, “robust” chemical risk assessments, and the establishment of a $120 million Community Benefit Fund.

Ms Ley has ordered Santos not to clear over 989 hectares of native vegetation in the project area, mostly in the Pilliga Forest, to protect biodiversity.

These come on top of 134 conditions imposed by the NSW Independent Planning Commission (IPC), after 23,000 public submissions were received during its deliberations.

“We accept the conditions from the Commonwealth, which are very much in line with our other operations across the country, and welcome the approval that all relevant matters of national environmental significance have been adequately addressed,” said Santos chief executive Kevin Gallagher.

The NSW Farmers Association is not convinced.

“To be fair to Sussan Ley, she has put conditions about monitoring the water table and water resources, embedded that in the approval,” president James Jackson said.

“But the problem with these aquifers is that once you damage them, remediating the damage is almost impossible.”

Mr Jackson said the farming sector will die without access to groundwater.

“In the drought, the water kept people going. It was the aquifers that people used for their stock water resources and these are very critical to our businesses,” he said.

“You're probably aware of that big aquifer that's under Sydney that's become contaminated.

“It'd be a very useful plan B for the Sydney water supply but it's unusable, it's been contaminated, it's stuffed.”

Traditional owners say they will continue to fight against the project.

“We always knew the Federal Government was going to do this,” Gomeroi Native Title applicant Polly Cutmore has told reporters.

“Scott Morrison and Sussan Ley haven't spent one day in Gomeroi or sat down with our elders. Until they can do that, they can just run back wherever they come from.

“They're not welcome in Gomeroi.

“Santos needs our production line and our land and water. It doesn't belong to the Federal Government, the State Government, and it doesn't belong to Santos — it belongs to us and we say no.”