Major gas exporters on Australia's east coast have agreed to a two-year supply deal to ensure there is no shortfall of gas in the domestic market after talks with the federal government.
Prime Minister Malcolm Turnbull says executives from Shell, Origin Energy and Santos, which run large gas export terminals in Queensland, had guaranteed local supplies over two years at a meeting on Wednesday.
"This is very good progress today," Mr Turnbull said after the meeting with gas bosses and industry officials in Sydney.
"There is more work to be done but we have secured that guarantee from the three big gas exporters that they will provide the gas to meet the expected shortfall identified by AEMO and ACCC in 2018."
The latest meeting follows the release of separate reports on the east coast gas market by the ACCC and the Australian Energy Market Operator (AEMO) earlier this week.
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Both reports warned that shortages of gas in 2018 could go as high as 108 petajoules - about three times larger than previously forecast.
The shortfall amounts to about one-sixth of the east coast's total projected demand for gas.
Ahead of the meeting, the head of industry association APPEA told the Australian Financial Review that all the gas needed to avoid the shortfall is currently available for sale but buyers had to come forward and sign up to contracts.
The federal government has threatened to trigger export controls if gas companies fail to make more domestic supply available and is pushing the NSW and Victoria state government to lift curbs on gas exploration.
The details for the arrangement are being finalised and will be incorporated into an agreement, Mr Turnbull said.
