Australia's largest gas companies have assured the Federal Government they will increase supply to the eastern states next year, potentially avoiding an energy crisis and export restrictions.

Key points: Suppliers have guaranteed to offer the domestic market gas to make up the shortfall

Suppliers have guaranteed to offer the domestic market gas to make up the shortfall Mr Turnbull says the deal means the Government will not have to intervene on exports

Mr Turnbull says the deal means the Government will not have to intervene on exports AEMO had warned the risk of gas shortages was three times worse than initially expected

Prime Minister Malcolm Turnbull met with the heads of Santos, Shell and Origin on Wednesday morning, repeating his threat to cap their exports unless they directed more gas to the local market.

The meeting came after the energy market regulator and the competition watchdog warned the risk of gas shortages was three times worse than initially expected.

The vast majority of gas produced in Australia is shipped overseas and the export market has been blamed for the shortage and the increasing gas prices in the eastern states.

"[The companies] have given us a guarantee that they will offer to the domestic market the gas that was identified as the expected demand shortfall by AEMO [Australian Energy Market Operator] in 2018," Mr Turnbull said.

"They've stated that will provide a similar guarantee over two years."

Mr Turnbull foreshadowed the market intervention earlier this year in a bid to secure supply in 2018, but it appears that will no longer be necessary, should the gas companies honour the deal.

Deputy Prime Minister Barnaby Joyce said the threat of export controls played a role in gas companies agreeing to increase supply.

"I see policemen every day and they have a car, a siren, flashing lights and they have a holster on their hip," Mr Joyce said.

"We don't expect them to use it every day."

'Australians have to come first,' PM says

On Monday AEMO projected a shortfall of up to 107 petajoules in 2018 and 102 petajoules in 2019, warning risk of energy blackouts requires "close attention and monitoring".

The Australian Competition and Consumer Commission (ACCC) has warned the supply-demand outlook has "significantly deteriorated" since its last inquiry, with a "substantial shortfall" now likely in 2018.

Mr Turnbull said introducing export restrictions was not something the Government "relished", but the threat had worked.

"We want to see more exports, but Australians have to come first," he said.

"If there is no other way to prevent a shortfall occurring, we would restrict gas exports.

"But if we are able to achieve commitments that will ensure there is not a shortfall of gas, and that the market functions well and people can buy the amount of gas that they need at prices that reflect global prices, then we don't need to restrict exports."

Opposition energy spokesman Mark Butler said the agreement was "all well and good" but the public needed a legal assurance the Government could restrict exports if required.

"They need a legal guarantee from the Government that if things don't come to pass the way that the Prime Minister hopes they will, Australian businesses and households will be looked after," Mr Butler said.

"Australian business and households have been given those assurances in the past and they haven't been delivered."