Lake Macquarie MP Greg Piper to introduce a bill to parliament that will pave the way for the establishment of a container terminal at the Port of Newcastle

Lake Macquarie MP Greg Piper has signalled his intention to introduce a Private Members Bill to state parliament that would pave the way for the establishment of a container terminal at the Port of Newcastle.

The independent MP gave notice on Wednesday that he would introduce the 'Port of Newcastle Extinguishment of Liability Bill 2022'.

The bill would extinguish the controversial port commitment deeds that are constraining the diversification of the port and the Hunter Region's economy.

"It is essential that we disentangle the port from what are unconscionable and anti-competitive lease conditions," Mr Piper said.

"But this is not just about the port, it's about the future of the Hunter Region, the northwest, west and south.

"The Port of Newcastle is beautifully positioned for container logistics; we need to prepare a port that is presently so dependent on one main commodity (coal) for the process of diversification."

Mr Piper's comments were echoed in the recent Productivity Commission draft report into Australia's maritime logistics system. The draft report found the port commitment deeds were not only hindering the Port of Newcastle's development but also the efficiency of Australia's ports network.

The deeds, which were entered into as part of the privatisation of Port Botany and Port Kembla by the NSW government in May 2013, require the government to compensate the lessee, the NSW Ports consortium, if container traffic at the Port of Newcastle exceeds an indexed cap.

The Herald understands the compensation package could be as low as $300,000, however, some sources put it as high as $1billion.

Mr Piper said he would be seeking meetings with the leadership of the Coalition and Labor before introducing the bill in October.

"I'm hoping we can sort something out with the government. I don't need my name attached to a bill, I just want the outcome," he said.

"I'd be very surprised if I don't have all of the crossbench and Labor. It's certainly popular among many people in the government, particularly the Nats, but I know it goes beyond the Nats.

Nationals Northern Tablelands MP Adam Marshall was expected to flag his intention to introduce a bill similar to Mr Piper's on Tuesday, but he failed to do so.

Mr Marshall previously said that farmers in his electorate were paying an extra $10-$12 per tonne on the cost of transporting their grain to Queensland for export because they did not have the option of exporting through the Port of Newcastle.

NSW Treasury did not comment about Mr Piper's proposed bill.

The government has previously said it stands by the port commitment deeds.

A spokeswoman for Labor leader Chris Minns said the party was awaiting to see the proposed legislation.

"NSW Labor continues our long standing support of a container terminal at the Port of Newcastle," she said.