The managing director of Iran's Gas Engineering and Development Co., Ali Reza Qaribi, said the 48-inch pipeline to Iraq would carry around 880 cubic feet of natural gas per day to Iraq once completed.
"The $450 million project will be built by Iranian contractors," he told the semiofficial Fars News Agency.
Natural gas from Iran would be used by Iraq to fuel its power stations. Parts of Iraq still struggle with electricity generation more than nine years after the U.S.-led invasion.
The Iranian director provided few details in terms of expected completion date or specific route. He added, however, that the required steel for the pipeline was purchased.
Iran has some of the largest natural gas reserves in the world. One of its most ambitious pipeline projects, the Iran-Pakistan-India pipeline, has suffered under diplomatic and sanctions pressure, however.