Santos has been fined by the NSW environmental watchdog for using water from its controversial $3 billion coal seam gas project for irrigation without approval.

The energy company copped a fine of $1500 by the Environment Protection Authority for using treated water from its Narrabri project in the state's north to irrigate lucerne on its own land.

Santos has been fined for irrigating from its Leewood Produced Water and Beneficial Reuse Project in the Narrabri CSG field without a permit. Credit:Dean Sewell

The penalty followed a "thorough and detailed investigation" that found the irrigation from the Leewood site caused no environmental harm or was unlikely to, the EPA said in a statement.

"Santos stopped irrigation activities at Leewood while the matter was resolved but will not be permitted to recommence irrigation until they have obtained the approval," the EPA said.