The money will help Lukoil manage its 10% stake in the Shah Deniz/South Caucasus Pipeline projects, which are engaged in extracting gas from under the Caspian Sea off Azerbaijan and building a pipeline to transport it to the West.

When completed, the pipeline system will have an annual capacity of about 20 billion cubic meters of gas a year, while production from the Shah Deniz field should reach 8.4 billion cubic meters a year.

International investors in the consortium developing the giant offshore gas-condensate field include BP, Norway’s Statoil, France’s Total and Azerbaijan’s SOCAR (the State Oil Company of Azerbaijan).

The European Bank for Reconstruction and Development’s loan will go to two subsidiaries, Lukoil Overseas Shah Deniz Ltd and Lukoil Overseas Shah Deniz Midstream Ltd, which hold the Lukoil stake. These companies will borrow $110 million and $70 million respectively. The money will fund Lukoil’s share of the cash calls for the development of the Shah Deniz gas field, and the South Caucasus Pipeline for gas exports to Georgia and Turkey.