Dhaka, Oct 2 : Bangladesh says export of gas is only the third option in its production-sharing contracts with multinationals engaged in exploration.

"We think ultimately gas export will not be needed as we have a shortage of gas," said Muqtadir Ali, chairman of the state-owned oil company Petrobangla, at a media briefing here Thursday.

The statement came after the Sheikh Hasina government this year opened limited bids to award three blocks in the upper reaches of the Bay of Bengal, triggering off protests from opposition parties and environmentalists.

Petrobangla has the first right to purchase any gas from the offshore blocks. The gas will have to be sold in the domestic market if it declines.

The question of gas export will only come up if this does not happen, Ali clarified Thursday.

"After any commercial discovery of gas, the contractors will have to offer the entire gas to Petrobangla. If Petrobangla does not give a written notice on gas purchase within six months, contractors would be free to find a market outlet in Bangladesh," Ali was quoted as saying by New Age newspaper Friday.

"As the country is facing a shortage of gas, Petrobangla is not in a position to decline to purchase gas. If the contractor finds a very large reserve, it can export gas only after meeting our demand to recover its investment," he claimed.

The media briefing, attended by the prime minister's adviser Tawfiq-e-Elahi Chowdhury and state minister for power and energy Enamul Haque, was organised "to allay the raging controversy over gas export provision" in the contracts expected to be signed with two international oil companies for three offshore blocks, the paper said.

Ali said the contractors would require to invest around $1 billion to install facilities for liquefied natural gas (LNG).

"Considering these aspects, we think gas export would not be needed," he said.

Petrobangla is expected to hold discussion with ConocoPhillips of the US next week for signing production sharing contracts for two blocks.