The pipeline will be able to process 50,000-barrels-a-day (b/d) of crude, with an option to increase this to 100,000 b/d, according to the ministry.

Iraq’s Oil Minister Hussein Shahrastani has claimed that the capacity of the pipeline could eventually top 350,000 b/d.

The main contract is expected to be awarded in July 2008 and be completed by July 2010.

The project stalled in 2007, with Iranian officials blaming US sanctions against Iran for Baghdad’s loss of interest on the scheme. However, the project now looks likely to proceed with each side expected to cover their own costs.