Drilling fluid linked to a CSG project has leaked into a Queensland river that is part of the Murray-Darling Basin.
The leak occurred when contractors for coal seam gas company QGC were drilling to run a pipeline underneath the Condamine River in Queensland's southwest.
Environment Minister Andrew Powell released a statement this morning saying his department was investigating the spill but he did not say when the incident occurred or how much fluid polluted the river.
He said a limited amount of fluid seeped from the drill hole but had since been contained within a wall of sandbags and pumped out.
Drilling has stopped at the site while an investigation is underway.
Mr Powell said his department wants to address the risk of further potential impacts.
"Work will not resume until the department has reviewed the assessment and decided whether the operation can be undertaken without further impact," Mr Powell's written statement said.
"The operations of coal seam gas companies and their contractors are being closely monitored and where necessary, changes will be made to operational practices to ensure environmental safety is maintained."
More comment has been sought from Mr Powell.