A second gas pipeline connecting the Northern Territory to South Australia would not be viable without fracking, the oil and gas peak body has said.

The Federal Government backed a feasibility study into a north-south gas pipeline in exchange for independent senator Nick Xenophon's support for company tax cut changes.

The NT currently has a moratorium on hydraulic fracturing while an inquiry into the technique is underway.

But the NT and SA branch of the Australian Petroleum Production and Exploration Association (APPEA) said it would not be realistic to have a new pipeline without fracking.

"The identified new resources of natural gas in the Northern Territory are predominantly in shale rock, very deep below the surface that cannot be produced without fracking," NT-SA APPEA director Matthew Doman said.

"That's why this inquiry is so important, that's why it's also important we keep a balanced discussion around something that's part-and-parcel for safe and sustainable natural gas."

Jemena gas pipeline needs fracking for sustainability: APPEA

Construction for the Jemena Northern Gas Pipeline connecting the NT gas fields from Tennant Creek with the east-coast gas market at Mount Isa in Queensland, is expected to get underway in mid-2017.

Mr Doman said even though offshore gas could be made available to that pipeline, as well as sources of gas in Central Australia, fracking would still be required to sustain it.

"For the long-term viability of the first pipeline, let alone the construction of a second pipeline, we must be able to proceed with the use of fracking to produce identified resources of shale gas in the NT," he said.

NT Chief Minister Michael Gunner said he welcomed discussion about a new pipeline from the Territory, and said its viability without fracking would be determined by the feasibility study.

Mr Gunner said he remained committed to the fracking moratorium and the inquiry into the technique.

"Regarding onshore gas in the Territory, we made a promise to Territorians at the last election that we would have an independent inquiry into the hydraulic fracturing of unconventional gas reserves in the Northern Territory," Mr Gunner said in a statement.

"At the end of the inquiry later this year, we will either ban fracking in the Northern Territory or allow it in highly regulated circumstances in tightly prescribed areas."