The consumer watchdog has been told to investigate Australia's gas market and compel industry figures to provide information in a bid to guarantee cheap and affordable energy.
News of the Australian Competition and Consumer Commission's intervention came after Malcolm Turnbull met gas company chiefs in Canberra on Wednesday to try to resolve a looming domestic LNG supply crisis.
Mr Turnbull emerged from the meeting saying his government remained concerned exporters of east coast LNG had not articulated how Australian households and business would get adequate supply at reasonable prices.
"The government has asked the exporters to provide further information, in the context of possible regulatory options, to address the short-term market issues," he said in a statement.
The ACCC's three-year inquiry will scrutinise the pricing, volume and availability of domestic gas compared to gas that is being exported.
The watchdog will release public reports every six months on the state of the gas market, including the prices and terms on which it is being offered, with a final report in 2020.
Ahead of the meeting, Mr Turnbull was determined to reinforce his message that a shortage on the east coast is not acceptable at a time when Australia will soon become the world's largest exporter of LNG.
At a previous meeting in March, he extracted a promise from exporters Shell and Origin to put more gas into the domestic market than they took out, with Santos expected to follow suit.
But one gas industry chief who met with Turnbull government ministers has cast doubt on the value of that promise aimed at staving off a domestic shortage.
Santos chief executive Kevin Gallagher said the idea of being a "net contributor" was a "fake construct".
The Gladstone LNG (GLNG) project, in which Santos is a lead partner, was producing less than its expected capacity so "we don't have any spare gas".
If Santos did find spare capacity, it would be more than happy to sell it into the Australian market, he told Sky News.
Energy Minister Josh Frydenberg said the GLNG project was taking gas from the south of Australia to export.
"That is increasing pricing across the country and it's also meaning that we've got a tightness in supply," he told ABC radio on Wednesday.
When asked whether the government was prepared to knock heads together at the meeting, Mr Frydenberg said: "Absolutely, absolutely."
Mr Gallagher said the bigger issue was barriers to developing new gas resources, such as his company's planned coal seam gas project around Narrabri in northern NSW.
He wants the commonwealth to pressure state governments to ease development restrictions.
"There's plenty of gas in the east coast and in the Northern Territory, it's a case of being able to develop it," he said.
"Had we been able to develop the Narrabri project as we intended to back in 2010-11, there would be no gas shortage in the east coast today."
