The two countries have signed an Operational Agreement and a Heads of Agreement (HoA), which includes a provision for India's possible participation in the project at a later date.
As outlined in the HoA, Pakistan will have the right to charge the transit fee for the transportation of gas to India.
Iran will deliver 750 MMcf/d of gas to Pakistan for the next 25 years, in order to generate 4,000 MW of electricity.
The 900 km, 42 inch diameter gas pipeline will run from the Assaluyen Gas Field in southern Iran to Pakistan.
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The pipeline was initially planned to also run through India, however the Indian Government withdrew from negotiations in 2009 due to concerns about the security of the project.
Iran and Pakistan signed a gas sales purchase agreement for the pipeline project in May this year.
The pipeline is scheduled to become operational by 2015.
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