Iran and Iraq signed a high profile agreement on Sunday according to which Iran will supply natural gas to Al-Baghdad, Al-Mansouriyah and Sadr power plants in Iraq, Tehran Times reported.
The deal was signed by Iranian Oil Minister Rostam Qasemi and his Iraqi counterpart Abdul Kareem Luaibi in Baghdad.
According to the deal, Iran would pump 25 million cubic meters of natural gas per day to the Iraqi power plants.
Based on the agreement, Iran would earn $3.7 billion a year from natural gas exports to Iraq.
Deputy Iranian Oil Minister Javad Owji said on Sunday that officials from the Iranian Oil Ministry had been negotiating for two years with officials from the Iraqi Energy Ministry for exporting gas to the neighboring country. He said negotiations took place in Tehran, Mashhad and Baghdad.
The operation for the construction of the pipeline for transferring the gas has started both in Iraq and Iraq, Owji said, adding that it is predicted the construction of the 227-kilometer-long pipeline in Iran would be completed by September.
He put the cost of the 48-inch pipeline at 342 million dollars.
Before visiting Baghdad for signing the gas deal, Owji said that Iran is seeking to establish a "new troika" for exporting gas to Europe.
Owji also said that Iran's annual incomes from gas exports will reach 8 billion dollars in 2014.