BHP Billiton and Exxonmobil have agreed to sell up to 198 petajoules of gas to AGL under a new gas sales agreement that incorporates an oil linked pricing component.

AGL says the pricing is competitive.

"The gas sales agreement has enabled AGL to secure competitively priced gas supply until 2020 for our 1.5 million residential and small business gas customers," AGL said in a statement.

AGL's gas portfolio now has sufficient Queensland-sourced supplies to release 30-50PJ per annum for sale into the high value Queensland market between 2017-18 and 2018-19.

The GBJV fields in the Bass Strait contain the largest volume of uncontracted gas in Australia.

Gas prices in the east coast are rising, and are expected to rise even further, now that the Gladstone LNG projects are starting to send gas out into the world, and there is an ongoing issue with demand being higher than supply.

AGL said in March that NSW gas prices may even be higher than the LNG export price, and said that domestic gas projects like Gloucester could act to dampen prices.

Deliveries of the Gippsland Basin gas will start in 2018 and will last until 2021, at which time presumably AGL may seek to recontract more gas.

AGL is in the midst of a review of its upstream business, particularly in light of issues around its contentious CSG pilot project near Gloucester, New South Wales.

Work was stopped on the Waukivory site earlier this year after the discovery of toxic chemicals in flowback water.

Based in figures released today, AGL still expects the project to be a major source of east coast gas, starting in 2018-19.

The company has also confirmed that work will temporarily return to the project, with the four pilot wells to be flared to release a build-up of natural gas in the shut-in well heads, to ensure the wells remain safe for future gas production.

AGL has also confirmed that a small gas leak was discovered at the site last week.

The EPA was notified and the leak has been fixed.