A new natural gas processing plant will be built in Darwin.

NT Chief Minister Michael Gunner says the Territory's “incredibly bright economic future is within reach”, evidenced by the plan for Darwin Clean Fuels to build a $1.2 billion plant.

The facility should be able to produce 100,000 barrels of transport fuel daily, providing a potential $360 million annual boost to the Northern Territory economy.

“Private sector investment creates strong economic growth and more local jobs, especially more permanent jobs,” Mr Gunner said.

“This is how we break out of the Territory's boom and bust cycle.”

The plant will produce condensate - a light petroleum liquid from natural gas that needs less processing to create quality transport fuel.

It can produce 75 per cent lower carbon emissions than conventional crude oil refineries.

Darwin Clean Fuels says it will produce premium transport fuels for Australia, including high octane petrol, diesel, jet fuel, LPG and marine bunker fuel at new 2027 Euro standards.

The plant will be the first significant petroleum production facility to be built in Australia in more than 40 years. It is the nation’s first to use only condensate as its feedstock.

Australia currently over one million barrels of transport fuels a day, but has to import about 600,000 of those barrels.