The Ministry of Petroleum and Natural Resources said it consented to the construction of an LNG terminal for the port city of Gwadar near the Iranian border. An associated pipeline would be built through a government-to-government arrangement.
"We are running from pillar to post to get this mega LNG terminal-cum-pipeline included in the list of early harvest projects agreed with China," Pakistani Natural Resources Minister Shahid Khagan Abbasi told The News, a Pakistani newspaper. "It will take three to four years to get commissioned."
The minister said the pipeline would cost an estimated $1 billion and more than $2 billion would be needed for the LNG terminal.
The Pakistani government has said aging infrastructure in the country is leaving it short on energy supplies.
Sanctions on Iran are inhibiting Islamabad's gas pipeline options from its western neighbor. The government said the new pipeline from Gwadar could be reviewed whenever U.S. sanctions pressure on Iran eases.