Mitsui is drawing up a detailed financing plan for the project's estimated $300 million-400 million foreign portion. It is understood that the Japanese trading house plans to appoint several other institutions as partners on the scheme and to secure the backing of international export credit agencies.

No financing agreements have been reached for IGAT 5's local portion, estimated to cost $250 million-350 million.

IGAT 5 covers the construction of a 510-kilometre, 56-inch-diameter natural gas pipeline and three gas compressor stations. The pipeline will link the onshore facilities of phases 6-8 of the South Pars gas development with the onshore Aghajari oil field, where the gas will be used for reinjection purposes.

Bid evaluation is ongoing at NIGC for the pipeline package, which was released earlier this year. At least three companies - European, Japanese and local - are understood to have submitted proposals for the project.

The engineering and procurement tender for the compressor stations is expected to be released in the first quarter of 2003.

IGAT 5 had originally been part of South Pars phases 6-8, which is being carried out by the local Petroparsand its Norwegian offshore partner Statoil. However, it was outsourced to reduce the financial requirements for the three-phase scheme (MEED 24:5:02).

UK-based Foster Wheeler Energycarried out the preliminary study for the project. The consultant is the local Bonyad Mostas.