The contract was signed on Wednesday in Turkmenistan following extensive negotiations between Tehran and Ashgabat.
Iran's Ambassador to Turkmenistan Ali Mojtaba Roozbahani and Maksat Babayev, chairman of the State Concern Turkmengas put their signatures on the agreement.
Based on the swap mechanism, Iran-- which lies between Turkmenistan and Iraq-- will supply up to 10 bcm of natural gas to Baghdad in exchange for receiving the same volumes from Ashgabat.
Furthermore, Iranian companies will construct a new 125-kilometer gas pipeline along with three gas pressure booster stations in Turkmenistan aimed at boosting annual shipments of gas to Iran to 40 bcm.
Speaking to IRNA's foreign policy correspondent, Ambassador Roozbahani highlighted the role played by the late President Ebrahim Raisi and foreign minister Hossein Amirabdollahian in pushing the gas swap deal.
He emphasized that the agreement is the result of high-level consultations between the two countries.
Rouzbehani described the gas swap deal as a significant step towards further developing cooperation between Iran and Turkmenistan in the gas sector.
MNA/IRN