Delegates from Turkmenistan, Afghanistan, Pakistan and India met this week to sign off on a multilateral natural gas pipeline from Turkmen gas fields.
Victoria Nuland, a spokeswoman for the U.S. State Department, said the project is a good example of the energy diversification efforts needed for the region.
"This is a perfect example of energy diversification, energy integration, done right," she told reporters during her regular press briefing. "We are very strong supporters of the TAPI pipeline."
The project is backed by the Asian Development Bank and is favored over Iran's plans to build a similar project from its giant South Pars natural gas field in the Persian Gulf.
Nuland said revenue from the Iranian pipeline could help Tehran support its controversial nuclear program. Washington's concerns, she said, were about potential investments in dangerous technology and weapons.
"If Iran wants to come back into compliance with its international obligations, the whole picture's going to look different in terms of the way we feel about investment," she said.