TPAO, the Turkish national energy company, signed a number of deals to invest in developments in the South Pars gas field in Iran, the largest in the world.
Ankara could get around 1.2 trillion cubic feet of gas per year from the field under the terms of the deal. Ankara said the gas could go to meet domestic and European demands as Turkey positions itself as a major regional energy hub.
The Turkish government said Iranian gas could go to supply the Western-backed Nabucco natural gas pipeline to Europe, which would contribute to the regional effort to ease Russia's grip on the energy sector.
Despite the broad political backing for Nabucco, the project lacks firm commitments from potential gas suppliers.
Turkish Prime Minister Recep Tayyip Erdogan, however, said the Iranian gas deal has several obstacles to overcome as Iran faces punitive U.S.-backed economic sanctions targeting its energy sector, Turkey's daily Today's Zaman reports.
"We have more steps to take on the economy, trade, oil and gas to promote cooperation," he said.