Javad Oji, managing director of the National Iranian Gas Co., said talks with Iraqi officials in Baghdad resulted in agreements between the countries to move ahead with a natural gas pipeline, the semiofficial Fars News Agency reports.
Iranian Oil Minister Rostam Qassemi had said Iran could supply as much as 880 million cubic meters of natural gas to Iraq to help fuel two power plants.
Iraq struggles with electricity availability. Because it lacks the infrastructure needed to capture it, Iraq burns off most of the natural gas associated with oil production.
Oji said Iraqi officials had expressed interest in using Iranian contractors to build the 167-mile section of pipeline planned for the Iraqi side of the project, Fars adds.
Iran has some of the largest proven deposits of natural gas in the world. Economic sanctions imposed as punishment for a controversial nuclear program make for an adverse investment climate, however.