(Adds Prime Minister, Santos, energy user comments, changes dateline)
MELBOURNE, April 27 (Reuters) - Australia's conservative government unveiled a radical plan on Thursday to restrict exports of liquefied natural gas (LNG) at times when domestic shortages push up local prices, aiming to ease soaring energy costs for local manufacturers.
The plan would allow Australia's resources minister to impose controls on LNG exports on advice from the market operator and regulator, as the government seeks to cap domestic gas prices, which have become a political hot potato.
"It's not a threat. This will be export controls. They will not be able to export gas if that has the consequence of reducing the availability of gas for the Australian market," Prime Minister Malcolm Turnbull told Australian Broadcasting Corp radio.
Australia is the world's second-largest LNG exporter after Qatar, but local gas prices have rocketed over the past two years with the start of LNG exports from three newly built plants in eastern Australia to customers in China, Japan, Korea and Malaysia.
The government's move drew a swift rebuke from gas producers, who called instead for curbs on onshore gas exploration to be lifted to help boost supply.
"Restricting exports is almost unprecedented for Australia," said Malcolm Roberts, chief executive of the Australian Petroleum Production and Exploration Association.
The Australian Energy Market Operator warned in March of a shortage set to hit eastern Australia and has already taken steps to ensure there is enough gas for power plants at peak times.
At least one of the east coast LNG plants, Gladstone LNG (GLNG) - operated by Australia's Santos Ltd STO.AX - is drawing gas out of the domestic market to help meet its export contracts.
Santos said on Thursday it was seeking more details on how the new policy would work.
"Moving forward, Santos will supply more gas into the Australian dometsic market than it purchases for its share of LNG exports," it said in a statement to the stock exchange.
The two other eastern LNG exporters, Queensland Curtis LNG, operated by Royal Dutch Shell RDSa.L , and Australia Pacific LNG, operated by ConocoPhillips (NYSE:COP) COP.N , have committed to being net gas suppliers to the domestic market.
Manufacturers welcomed Turnbull's move.
"The government has given themselves a bigger stick to ensure the gas industry balances the needs of their international customers and their obligation to supply the domestic market with gas at a fair price," Energy Users Association of Australia Chief Executive Andrew Richards said in a statement.
Companies including France's Engie SA ENGIE.PA and Origin Energy ORG.AX have sealed deals to ensure gas supply to power plants at peak times, easing some short-term concerns about shortages that have already helped to trigger blackouts.