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ISLAMABAD—Iran and Pakistan signed a deal in Turkey on Tuesday paving the way for construction to start on a much-delayed natural-gas pipeline connecting the two nations in a move that has been opposed by Washington as undermining sanctions efforts against Tehran.

Pakistan has argued the pipeline, which will connect Iran's South Pars gas field with Pakistan's Baluchistan and Sindh provinces, is crucial to averting a growing energy crisis that is already causing severe electricity shortages.
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"It's in our legitimate economic interests," said Abdul Basit, a foreign ministry spokesman. Construction on the pipeline should begin this year and be operational by 2014, he said.

Iran and Pakistan signed an initial pact in June last year and reached agreement on pricing in September. Under the terms of the final deal signed Tuesday, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years.

The pipeline has been on the drawing board since the mid-1990s, when Iran and India signed a deal to transport gas through Pakistan. Dubbed the "Peace Pipeline" because of hopes it would lead to a détente between rivals India and Pakistan, the $7 billion, 2,700-kilometer pipeline project was stalled as the two nations almost went to war in 2001.

India dropped out last year amid continued security concerns in Pakistan's Baluchistan province, home to a militant Islamist ... >>>