Asadollah Karahani told Oil Minister Bijan Namdar Zanganeh on Wednesday that Iran had provided Turkey $800 million worth of natural gas to clear a portion of its debt, Daily Sabah reported.
He added that the remaining amount owed to Turkey would also be paid off through natural gas supplies.
Iran, which started exporting gas to Turkey in 2001, is the second largest supplier to the country after Russia, delivering 10 billion cubic meters annually.
Majid Boujarzadeh, a spokesman for National Iranian Gas Company (NIGC), told the Turkish media in October that technical studies are already underway to increase exports to Turkey.
"We have a lot of gas reserves in Iran. Currently, we send 30 million cubic meters of gas daily to Turkey," said Boujarzadeh.
NIGC Managing Director Hamidreza Araqi had in August announced that Iran's exports of gas to Turkey could increase by six million cubic meters per day.
Araqi underlined that the increase in exports of gas to Turkey can be implemented through the existing infrastructure.
Boujarzadeh added that Iran has plans to build a LNG factory in Iran, and called on Turkey to invest in the project.
"We are ready to send LNG if Turkey is ready to receive it from Iran. If Turkey is able to invest in this LNG plant, we are ready to provide many opportunities to Turkey," he said.
Boujarzadeh said Turkey could avail of the opportunity to generate more income should Iran start to pipe gas to Europe via Turkish territory.
This could further be strengthened with the existing pipeline between Turkey and Iran, he added.
"We are considering sending gas to Europe via Turkey. We have excess capacity now to send gas to Turkey and Europe from Greece," Boujarzadeh said.