The Inter State Gas System (ISGS), a company set up by the government to act as project manager, has set a deadline of August 20 for the submission of expression of interest (EOI) from the banks for financial advisory services, according to a document published on Tuesday.

The document did not identify the project but ISGS officials confirmed the EOI had been sought for the multi-billion Pakistan-Iran gas pipeline project.

Under the deal finalised in March last year, Iran will pump 750 million cubic feet of gas to Pakistan each day by 2014.

"ISGS is inviting EOI from reputable/international banks ... to act as financial adviser to assist ISGS in arranging capital (debt and equity) for the project," the company said in the document.

"The prospective consortia, if any, may include multiple banks along with other non-banking enterprises, but each consortium shall identify one bank as the lead adviser."

The lead adviser would manage the entire transaction up to the financial close, it said.

Petroleum secretary Ejaz Chaudhry told a parliamentary panel on Monday that a route survey was already underway for laying the 750-km pipeline, which is estimated to cost $1.2 billion.

Iran is said to have almost completed construction of its portion of the pipeline.

The Pakistani section of the planned pipeline will cross the province of Baluchistan, where separatist militants have been targeting power and gas installations for years in a decades-long low-scale insurgency.

Despite security fears over the pipeline, analysts say the southern part of the province, through which it will pass, is less vulnerable and the plans are likely to go ahead.

Pakistan is desperate for new energy sources and needs gas to feed its power sector as it faces a shortfall of up to 5,000 megawatts per day during peak hours in summer.

It also plans to import 500 million cubic feet per day (cfd) of liquefied natural gas (LNG) by August next year. The Petroleum Ministry is evaluating 17 foreign and domestic firms that have shown interest in the project.

Pakistan's own balance of recoverable natural gas reserves stood at 28.33 trillion cubic feet per day (mmcfd) by Jan. 1, 2010, official figures show. The average daily gas production is 4.5 billion cubic feet, with consumption at 6.5 billion cubic feet by June 30, 2011.

Copyright Reuters, 2011