Azerbaijan, Baku, Mar.11/ Trend F.Milad
Pakistan will pay fine equal to one million dollars per day if it fails to complete the Iran-Pakistan pipeline in time.
The pipeline is scheduled to come on stream by the end of 2014, the Fars News Agency reported.
Iranian President Mahmoud Ahmadinejad and his Pakistani counterpart Asif Ali Zardari inaugurated the pipeline near the border on Monday.
Iran's president said the deal is historic as it defies efforts by foreign powers to dominate the region.
Ahmadinejad also expressed hope that the pipeline will reach eastern Pakistan and will extend further in that direction.
Iran plans to extend its 7th cross-country pipeline from Southwestern port city of Assaluyeh to the southeastern city of Iranshahr, and from there to the Pakistan border.
By extending the pipeline Iran can also supply gas to its eastern provinces.
An Iranian contractor will lay some 780 kilometers of pipeline in the Pakistan soil in 22 months, he said.
Iran and Pakistan have devised a plan to finance the gas pipeline on Pakistan's side without the need for Islamabad to transfer funds to Tehran.
Based on the agreement, Tehran will grant a $500-million loan to Tehran-based Tadbir Energy Development Group, which is responsible for laying a pipeline in Pakistan under the multi-billion-dollar project.
In the first phase, Iran will lend 250 million dollars and extend the assistance later to 500 million dollars.
Pakistan will pay back Iran's $500-million loan after peace pipeline's inauguration.
The Iran-Pakistan gas pipeline, projected to cost 1.2-1.5 billion dollars, would enable the export of 21.5 million cubic meters of Iranian natural gas to Pakistan on a daily basis.
Iran has already constructed more than 900 kilometers of the pipeline on its soil.
The United States has warned that the project could violate anti-Iran sanctions.
But Iran says the pipeline shows that the country has overcome the sanctions. Iran has almost completed its side of the project.
Now companies from both countries will undertake the construction of the remaining segment in Pakistan.