In the next few days, AGL is expected to ask Pilkington Australasia and other major industrial customers to reduce their use of gas.The move comes after a fire shut down Santos' Moomba natural gas plant in South Australia, which is expected to stay out of operation for at least a fortnight.
The New State Wales Government says industry is facing a possible 20 per cent drop in supply caused by the fire and explosion at the gas plant.
The State Government says it is not yet clear whether staff will have to be stood down in gas-dependent industries, which is facing a drop in supply over the next few weeks.
Pilkington Australasia president Roger Leeming says they will keep staff on as long as possible if forced to reduce gas consumption.
"Our feeling at the moment is that we'd be unlikely to be able to produce products at our two major plants in Sydney," Mr Leeming said.
Mr Leeming says stopping production will mean that stock in some products will run out within days rather than weeks.
He says the company expects to be asked to cut gas usage within the next few days.
"Hopefully it would mean a reduction in output, although our feeling at the moment is that we'd be unlikely to be able to produce product at our two major plants in Sydney, the plant in Campbelltown at Ingleburn and the plant at Alexandria in Euston Road," he said.
"We will be supplying out of stock for several days, so our employees would be working as normal for as long as we can obviously."
Pilkington Australia is part of the Pilkington Group, he worlds largest glass manufacturer, and supplies products mainly for the building and automotive markets.
Santos spokesman Jon Young says the company is looking for more ways to ease the shortage.
"We're going to be examining further steps to bring into production small volumes of field gas, and over the next few days we will pursue further opportunities," Mr Young said.
Santos says the full extent of the damage to the plant will not be known for several days.
The South Australian Government has already told the State's 50 biggest industrial gas consumers to cut usage and says it cannot offer guarantees that jobs will not be lost due to the gas shortage.