The value of the deal – that has been signed during the visit by the Chinese President Xi Jinping to Islamabad – is $2 billion, The Wall Street Journal reported.

It has now officially paved the grounds for the resumption of exports of Iranian natural gas to Pakistan – a project that has been delayed for years.

The gas pipeline deal was part of a package of economic agreements that President Xi signed with Pakistan's Prime Minister Nawaz Sharif on Monday. The total value of the package is reported to have been around $45 billion and is meant to create what is now known as the China-Pakistan Economic Corridor (CPEC).

The CPEC links China's far-western region to Pakistan's south-western Gwadar port on the Arabian Sea through Kashmir and is a massive project of road, rail, energy schemes, pipelines and investment parks.