A spokesman for Fire & Rescue NSW said a number of fire engines attended a "gas vapour leak". He said the gas company was in attendance and "sorting out the problem".

He was unable to confirm the source of the leak.

NSW Greens MP Jeremy Buckingham said he believed it was coming from a coal-seam gas well about 200 metres from nearby homes.

"I arrived at the area to find the fire brigade and Jemena gas workers in attendance, but no AGL personnel, and to witness loud hissing from the gas well.  The fire brigade has formed a cordon around the area and families from nearby homes are out in the street very concerned about their safety and what's going on.

"The fire crews are saying to me there was coal-seam gas infrastructure," he said. "They said there is a gas well.

"We want the government to immediately shut the gas field down and conduct a comprehensive investigation."

The AGL Camden Gas Project consists of 144 gas wells and "involves the extraction of methane gas from coal seams within the southern coal fields approximately 700 metres below the ground", according to the company's website. 

#CSG well leaking Spring Farm western Sydney. Hissing loudly. Residents smelling gas. Homes metres from well #auspol https://t.co/tVvHFLjYFJ — Jane Hammond (@hearyanow) August 31, 2014

"While bringing the Spring Farm number 5 well back online at approximately 730pm on Sunday 31 August, a safety release valve was activated, causing a loud hissing noise," an AGL spokeswoman said.

"This caused a small amount of natural gas to escape exactly as is designed," the spokeswoman said. "At no time were any local residents at any risk."

"Following gas leak detection checks by AGL operators, the well is now back online and operating safely."