Pakistani Petroleum Secretary Abid Saeed said the project could be completed by the end of next year. He said Pakistan will receive 750 million cubic feet of natural gas from Iran each day through the pipeline once all operations are completed.
India has been included as potential partner in the pipeline. The U.S. government favors a rival project planned from Turkmenistan through Afghanistan, Pakistan and India.
Pakistan hosted Chinese delegates Monday to discuss extending the Iranian pipeline through to western China, the Press Trust of India reported.
Both sides are expected to review options for oil links as well, the Indian newspaper said. Pakistan's aging infrastructure and energy sector mismanagement has left most the country without a reliable source of electricity.
Islamabad said a looming energy crisis in the country is a greater threat than terrorism. India, meanwhile, relies on natural gas imports because it lacks the infrastructure necessary to take advantage of its own reserves.
Chinese economic expansion is such that its energy demands are outpacing the rest of the world.