The competition watchdog has urged the federal government to work with Queensland’s three LNG exporters to ensure they free up more gas for the east coast market after it found the threat of a shortfall this winter had worsened.

In the south-eastern states, the forecast shortfall is now expected to reach a record high of 40 petajoules in the September quarter unless the LNG producers keep some uncontracted gas at home, the Australian Competition and Consumer Commission said.