Tehran last week called on its partners in Baghdad and Damascus to come to Iran to discuss gas exports to the Mediterranean.
Iraqi Oil Minister Hussain al-Shahristani told Radio Free Europe/Radio Liberty that Baghdad had agreed "in principle" on the construction of the pipeline.
The pipeline could carry around 3.8 billion cubic feet of gas per day through Iraq. Iranian officials said as much as 3.8 million cubic feet of gas per day could be used by Iraq to power electrical plants with gas, something Shahristani said was a key component of the deal.
The minister told RFE/RL that building the pipeline through his country would provide an excellent source of revenue for all parties involved.