The U.S. government said plans by Iran to build a natural gas pipeline through Iraq to Syria may run into problems with economic sanctions.

The semiofficial Fars News Agency in Iran reports that construction started on a natural gas pipeline through Iraq to Syria. The government said the project should be completed by June and requires about $3 billion in investments to support.



A preliminary agreement on what Fars said was a $10 billion pipeline deal was signed by Iraqi, Iranian and Syrian oil ministers last year in Iran's southern Bushehr province. Both downstream consumers are expected to take on Iranian gas from the South Pars offshore field to support electricity stations.



Victoria Nuland, a spokeswoman for the U.S. State Department, brushed off the report, saying Washington has seen similar reports on the Iran-Iraq-Syria pipeline "six or seven or 10 or 15 times before, and it never seems to materialize."



In August 2011, after the trilateral deal was signed, Tehran said international lenders were lining up to support the multimillion-dollar pipeline project.



Nuland said Iran was "bragging" about the pipeline with the latest report.



"I would simply say that the construction of any kind of an Iranian-Syrian pipeline could potentially raise sanctions issues under U.S. law on either Iran or Syria, including for international entities who might decide to participate in it either by financing or by construction," she said.