The IP gas pipeline will supply natural gas from Iran to Pakistan and help the country to meet its growing power needs.
It is expected that the pipeline will be completed in December 2014 and supply 750 million cubic feet of gas per day to Pakistan.
Pakistani section of the Peace pipeline will run 781km and will be built at a cost of $1.5bn, of which Iran will provide a loan of $500m for the project, reported The Financial Express.
The Iranian section of the IP gas pipeline is almost complete.
Following the groundbreaking ceremony, the US has threatened Pakistan with sanctions.
Iran’s President Mahmoud Ahmadinejad was quoted by the newspaper as saying that the pipeline project has been undertaken with a good intention.
"The Westerners have no right to make any obstacles in the way of the project," Ahmadinejad added.
