The head of the fire department in the Kirkuk-based North Oil Company, Jumaa Ahmad, said an explosive device caused the blast on Sunday on the pipeline which transports gas from the Jambur oil field to the Baiji refinery, 250km north of Baghdad.
The blaze was so big that its glow could be seen in the night sky from Kirkuk, 30km to the north of Jambur.
The explosion is the latest in a long series of blasts against Iraq's oil infrastructure, blamed by the US-led occupation on loyalists of toppled president Saddam Hussein and resistance fighters.
The gas pipeline fed the power plant in Baiji. Ahmad said he expected the city's refinery to experience production problems because of the fire.
The 300,000-barrel-per-day (bpd) Baiji refinery is Iraq's largest and newest refinery, built in the 1980s.
It is supplied mainly from the northern oil fields around Kirkuk. Jambur is one of the main fields in northern Iraq. Before the US-led invasion it produced around 75,000 bpd.
Meanwhile, the toll among occupation forces continued to rise.
Two US soldiers were killed and another injured in an unusual accident involving two military vehicles in Iraq.
The US army said in a statement on Sunday that the Humvee in which the soldiers were travelling was struck by an M1 Abrams tank near Baghdad International Airport.
US soldiers are out in force in the
northern city of Mosul
The crash occurred on Saturday and the dead soldiers belonged to the 1st Armoured division.
In related news, three US soldiers were killed in the northern city of Mosul, including two who witnesses said had their throats cut.
Two shopkeepers who saw the deaths of the two soldiers said they had their throats slit after being ambushed in traffic.
But a senior US military spokesman said it would be "ghoulish" to comment on the testimony, but did not specifically deny it.
A formal statement said the two men from the 101st Airborne Division which patrols Mosul were killed just past noon (0900 GMT) in the western part of the city centre.
Witnesses said they saw gunmen open fire with Kalashnikov assault rifles on a three-vehicle convoy, causing one to crash.
They said the other two vehicles had continued on their way, allowing the assailants to approach the stricken soldiers and remove their helmets and flak jackets. The attackers then slit the soldiers' throats, they said.
Further south, a US soldier was killed and two wounded when their vehicle struck a roadside bomb, said a spokesman.
The attack came a day after US troops seized a former lieutenant general in Hussein’s army in a raid.
US soldiers blocked off area in
Mosul where troops were killed
Meanwhile, occupation authorities announced they ordered the suspension of all civilian flights into the airport after a missile strike on a cargo jet belonging to German-owned courier DHL.
Authorities said there is a hold on Royal Jordanian and DHL civilian aircraft until further investigations.
Military travel will continue.
Royal Jordanian subsidiary Royal Wings was the only carrier operating civilian passenger flights into Baghdad, albeit on a restricted basis.
DHL was the only courier flying in. The two services provided an important link to the outside world.
The only alternative is the 10-12 hour road journey to the Jordanian or Syrian capitals, along a highway that is regularly targeted by robbers and is the scene of frequent roadside bombings on US troops, or the arduous land trip south to Kuwait.
The crew of the DHL freighter emerged unscathed from Saturday's hit by an SA-7 ground-to-air missile.