TEHRAN: Iran has awarded contracts worth $2.6 billion to a company controlled by the Revolutionary Guards, the semi-official Mehr news agency said on Saturday, showing the continuing rise of the elite military force.

Khatam al-Anbia will build two pipelines totalling 1,100 km long to carry oil from the southeastern Khuzestan province to a refinery in Rey, south of the capital Tehran, under a contract with a state oil company worth $1.3 billion, Mehr said.

"These oil projects have been ceded to the Khatam al-Anbia Construction Headquarters by forgoing tender formalities," said Ali-Reza Zeighami, the head of the state-owned National Iranian Refining and Distribution Co.

Khatam al-Anbia will sign another $1.3 billion contract with the National Iranian Gas Co. soon to build a segment of pipeline to northwesterm Iran that Tehran hopes could eventually take Iranian gas to markets in Western Europe, Mehr said.

The contracts are the latest sign of the growing clout of the Revolutionary Guards Corp in the Iranian economy at a time when international sanctions have meant many foreign companies have been unable or unwilling to compete for tenders.

Iran is the second biggest producer within OPEC and boasts the world's second-largest natural gas reserves after Russia, but US and UN sanctions deterring investment by Western firms with expertise and capital have slowed its development as a major exporter.