First Vice President Mohammad-Reza Rahimi attended a ceremony marking the completion of a 560-mile leg of a pipeline from gas facilities in Asalouyeh to the Pakistani border, the official Islamic Republic News Agency reports.
Tehran and Islamabad finalized a deal in June for the delivery of 750 million cubic feet of natural gas through the pipeline from the South Pars gas complex in the Persian Gulf.
Iran started construction on the pipeline in its territory using domestic engineering companies. Tehran said if the pipeline reaches India as originally planned, Bangladesh could link to the gas line from there.
India was included in initial plans for the project but stayed on the sidelines since 2008 because of pricing issues with Iran and concerns over the security of the pipeline through Pakistan.
Washington opposes the deal because of the economic benefits for Tehran, which was slapped with U.S. and European sanctions targeting Iran's energy sector in June.
First deliveries of natural gas through the pipeline are expected in Pakistan by 2015.