The Shah Deniz stage II offshore natural gas field project in Azerbaijan has secured $1bn loan from the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), and the Black Sea Trade and Development Bank (BSTDB).

A consortium of companies, including BP, Türkiye Petrolleri Anonim Ortakligi (TPAO), Malaysian firm Petronas, State Oil Company of Azerbaijan Republic (SOCAR), Lukoil, Iran’s Naftiran Intertrade (Nico) and SGC will develop the $47bn Shah Deniz II project.

Lukoil Overseas Shah Deniz, a subsidiary of Lukoil, will gain access to the funds allocated for the gas field, which will feed Southern Gas Corridor from Caspian to Europe.

ADB private sector operations department deputy director general Michael Barrow said: "This will be the largest gas field development project undertaken in Azerbaijan, generating more economic opportunities and helping to boost closer regional ties with Georgia and Europe."

Scheduled to be commissioned in 2018, the Shah Deniz II field is expected to produce 16 billion cubic meters of natural gas a year.

EBRD energy and natural resources managing director Riccardo Puliti said: "This project is one of the EU’s highest priorities for the energy sector.

"It helps cut carbon emissions by providing a bridge fuel for renewables and replacing coal. The project will also be a very big step towards the market-based hub pricing for gas which will bring Europe closer to a common gas market."