Ali Majedi, Iran's deputy oil minister for international affairs, said a pipeline from southern Iran across the border to power stations in Basra province is "currently under construction."
The pipeline will stretch from the Iranian port city of Asaluyeh, near the South Pars gas field, to Iraq.
Iran has boasted of its potential to reach new gas customers through South Pars, which is one of the largest gas complexes in the world. Iran shares the field with Qatar.
European officials have brushed off Tehran's gas offerings because of sanctions imposed on the Iranian energy sector. Though Iran secured some sanctions relief through an interim nuclear deal with Western powers last year, the U.S. government in particular has said Iran is not yet open for business.
Majedi said the pipeline from Asaluyeh could reach into the Syrian market when conditions return to normal in the war-torn country.
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