Environmentalists say a coal seam gas site in north-central New South Wales is discharging water with high levels of ammonia into the Murray-Darling river system.

Friends of the Earth, who helped commission the research, says tests show treated water from the Eastern Star coal seam gas project in the Pilliga Forest contains three times the level of ammonia than is the standard for drinking water.

The group's Carmel Flint says results show elevated levels of seven different compounds around the coal seam discharge area compared to samples taken 1 kilometre upstream.

"The major concern was the ammonia, it was at three times drinking water standards and it can have a major impact on aquatic life, particularly fish. It has major impacts on fish health," she said.

Ms Flint says the creek the discharge water flows into is connected to the Murray-Darling Basin System, which the federal government is spending billions trying to save.

"This water flows north into the Namoi," she said.

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"The Pilliga Forest is part of the Murray-Darling Basin, one of its most iconic natural assets."

Environmentalists see the arid woodland surrounding the Eastern Star gas project as a key battleground in their war on coal seam gas.

The site's owner, Santos, has defended the project.

Spokesman Matthew Doman says the company has not seen the samples or the report commissioned by the environment groups.

"I can't comment specifically on the sample that seems to be the subject of a report which I also haven't seen, but Eastern Star have been conducting regular testing on the water discharged from this facility," he said.

"That discharge has been authorised by the New South Wales Government."

Friends of the Earth have defended the quality of their research to AM.

Ms Flint says the group was not involved with collecting the samples.

"We contacted a consultant and had them independently collected, and then we sent them to one of the best labs in New South Wales to analyse them," she said.

"So these are very high quality results which can be completely trusted."

Santos says there are already water quality problems in the Namoi River.

"It's worth pointing out I think that the New South Wales Government has also, under its Office of Water, identified for some time that there are high nitrate levels in the Namoi river and has attributed those to the agricultural activities in the region," Mr Doman said.