The idea was conceived by a young Pakistani civil engineer Malik Aftab Ahmed Khan in mid 1950s, when an article of his was published by the Military College of Engineering, Risalpur. The article "Persian Pipeline" also mentioned the method for its protection along the hostile territory by establishing mini battalion-size cantonments along its proposed route through Baluchistan/Sind. The project was conceptualized in 1989 by Rajendra K. Pachauri in partnership with Ali Shams Ardekani, former Deputy Foreign Minister of Iran. Dr Pachauri proposed the plan to both Iranian and Indian governments in 1990. The government of Iran responded positively to the proposal. At the annual conference of the International Association of Energy Economics, 1990, Dr Ardekani backed Dr Pachauri's proposal.
Discussions between the governments of Iran and Pakistan started in 1994. A preliminary agreement was signed in 1995 between Pakistan and Iran. This agreement foresaw construction of a pipeline from South Pars gas field to Karachi in Pakistan. Later Iran made a proposal to extend the pipeline from Pakistan into India. In February 1999, a preliminary agreement between Iran and India was signed.