ANKARA (AFP) -- Turkey and Iran agreed in principle to expand their electricity trade and build dams and power stations, Turkish Energy Minister Hilmi Guler said Thursday.

The projects include upgrading existing power lines and building additional lines, the two ministers said.

"We agreed to multiply by 2.5 the capacity of the two existing power lines between our countries and to build two more lines if need be," Fattah said.

Guler explained that both countries would give each other electricity according to their changing needs.

He said they also discussed a barter system under which mutual investments would be paid with electricity, as well as proposals to build dams and natural gas- or oil-fueled power stations.

If such a station is built in Turkey, Guler said, Iran will supply the natural gas or oil to run it and Turkey will produce the electricity, which could be shared with Iran.

Fattah invited Turkish companies to look into the possibility of building dams and power plants in Iran.

"Iran is completely ready for such investment and cooperation," he said.

Trade volume between Turkey and Iran was 6.7 billion dollars (4.9 billion euros) in 2006, with the bulk of Iranian sales in the form of oil and natural gas carried via a pipeline linking the two neighbors.