Two teenagers injured in a shed explosion and fire east of Nowra on Sunday afternoon are expected to make a full, albeit lengthy recovery.

Both boys are in Sydney hospitals and will require extensive treatment.

South Coast Police Inspector David Cockram said 17-year-old cousins were working on the fuel tank of a boat at Worrigee when it burst into flames.

"We're not exactly sure how the fire started," Insp Cockram said.

"The boys were working on the fuel tank when it ignited.

"There is nothing suspicious about the incident, it was just an accident."

Emergency services were called to a house on Greenwell Point Road, just before 5pm (February 16), following reports of an explosion in a shed.

A large plume of black smoke could be seen billowing from the shed, which was extinguished by Fire and Rescue NSW and NSW Rural Fire Service, but the shed was completely destroyed.

Numerous NSW Fire and Rescue and local Rural Fire Service brigades, NSW Ambulance paramedics and NSW Police attended the scene.

One of the boys was treated at the scene by NSW Ambulance paramedics and taken to Shoalhaven District Hospital, before being airlifted to Royal North Shore Hospital in a critical condition, while the second teenager was taken to Wollongong Hospital in a serious but stable condition and has since also been transferred to Sydney for specialist treatment.

The boys suffered burns to their legs and arms and were treated at a nearby neighbour's property until ambulance crews arrived.

"I've spoken to the fathers of both boys this morning," Insp Cockram said "they have both certainly suffered serious burns but they are not expected to be life-threatening.

"However, they will receive ongoing treatment for an extensive period of time to make a recovery from their injuries.

"The families are obviously upset. I'm grateful the kids will pull through."

Officers from South Coast Police District established a crime scene and started an investigation into the circumstances surrounding the blaze but said the fire is not being treated as suspicious.

8.35am

Two 17-year-old boys remain in critical conditions after a shed fire east of Nowra on Sunday afternoon.

Emergency services were called to a house on Greenwell Point Road, just before 5pm (February 16), following reports of an explosion in a shed.

It is believed the teenagers, who are understood to be cousins, were working on a boat inside the shed when the fire occurred.

Numerous NSW Fire and Rescue and local Rural Fire Service brigades, NSW Ambulance paramedics and NSW Police attended the scene.

One of the boys was treated at the scene by ambulance paramedics and taken to Shoalhaven District Hospital, before being airlifted to Royal North Shore Hospital in a critical condition.

The second teenager was taken to Wollongong Hospital in a serious but stable condition.

A large plume of black smoke could be seen billowing from the shed, which was extinguished by Fire and Rescue NSW and NSW Rural Fire Service, but the structure was completely destroyed.

Officers from South Coast Police District established a crime scene and started an investigation into the circumstances surrounding the blaze.

The fire is not being treated as suspicious.