The Federal Government has secured an agreement with major firms on gas export controls.

The Prime Minister has met with the heads of Santos, Shell and Origin to urge them to direct more gas to the local market.

Most of the gas produced in Australia is shipped overseas, leading the large export market to be blamed for shortages and increasing gas prices.

“[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 says formal market intervention will no longer be necessary, if the gas companies honour the deal.

AEMO is projecting a shortfall of up to 107 petajoules in 2018 and 102 petajoules in 2019, increasing the risk of energy blackouts.

Mr Turnbull said the threat of export restrictions appears to have 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 spokesperson Mark Butler said the government still needs legal assurance that it 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.”