Iran will double natural gas exports to Iraq starting in 2017 under a contract signed on November 11.
The deal, to send 20 to 35 million cubic meters of gas per day to the southern Iraqi city of Basra, follows a first major contract between the countries in 2013 to export gas to Baghdad.
Iran's Deputy Oil Minister Hamid Reza Araghi, who, along with Iraq's deputy energy minister signed the deal, said the six-year contract will require the building of new pipelines and other facilities.
"The pricing will be similar to that of the Baghdad contract," he said.
The Baghdad contract to export 25 million cubic meters of gas a day was reportedly was worth $3.7 billion (3.4 billion euros) a year.
Iran sits on the world's second largest natural gas reserves and produces some 600 million cubic meters a day. It currently consumes almost all of the gas domestically as it lacks infrastructure and markets for exports.