Resources Minister Madeleine King says she does not need to pull the so-called "gas trigger" and restrict gas exports after producers agreed to provide additional gas to avoid a shortfall on the east coast next year.
Last month Ms King put gas producers on notice that the government intended to restrict their exports unless they could prove Australia would not face gas shortfalls in 2023.
She said the Australian Competition and Consumer Commission (ACCC) had estimated there would be a shortfall of 56 petajoules if all domestically produced gas was exported.
"To prevent this predicted supply shortfall, I asked Gladstone LNG producers to provide me with plans to avoid that shortfall," Ms King said.
"In aggregate, their plans that they have given me will provide an additional 157 petajoules of gas to the east coast gas market in 2023.
"That is almost three times the shortfall forecast."
Gas producers not sitting on supplies
The minister said even with the additional gas provided to the east coast market, gas producers would still be able to meet their contracts with foreign countries.
Ms King denied that gas producers were sitting on supplies that could have eased the pressure on the east coast market earlier this year.
"Gas moves around quite quickly in the system … I think what happened is they weren't under the governmental pressure to ensure that the domestic supply was there," she said.
"We also had a potential set of circumstances that we hadn't seen before where coal-fired generators failed … as well as other incidents, it was the perfect storm of events that led to the supply crunch that saw a really extraordinary demand for gas that hadn't been demanded before."
The minister said it was "very unlikely" that gas prices would reach low points of $6 or $8 a gigajoule, the advice was that securing the extra domestic supply would lead to lower prices for consumers.
"The truth is we are in a global energy crisis, we have all seen what is happening in Europe and we have trading partners who have had their gas supply cut off," Ms King said.
"So it will continue to be a pretty heavy crunch on gas prices and other energy prices for that matter.
"I don't see this changing in the short term and it won't change without the war in Ukraine ending."
The agreement on Thursday means the government does not have to enact its "gas trigger" which would force producers to keep gas for domestic use.
A Shell spokeswoman said it was in the best interest of Australians that the right policy settings were in place to encourage investment in gas.
"The revised Heads of Agreement attempts to strike the right balance by giving the market confidence that there will be gas available from Queensland at a competitive price in the near term," she said.
The spokeswoman said Shell had already offered 130 petajoules of gas for next year and it ws committed to working with the federal government to identify new supply solutions.
