The Asian Development Bank (ADB) has agreed to provide a $500 million loan to Azerbaijan's Shah Deniz 2 project, the Azeri finance ministry said today.
The ADB said earlier this year it was considering lending money to Azerbaijan to help fund the second stage of development of the Shah Deniz natural gas project in the Caspian Sea.
On Sunday, the ADB and representatives of Azerbaijan signed an agreement in Yokohama, Japan, under which the Southern Gas Corridor will receive funds to develop Shah Deniz 2, the ministry said in a message sent to Reuters.
It was unclear when the loan would be made.
Shah Deniz is part of the Southern Gas Corridor project which involves expansion of the Southern Caucasus Pipeline and construction of the Trans Adriatic (TAP) and Trans Anatolian (TANAP) pipelines.
Plans call for piping gas from the Shah Deniz gas field to Europe via Georgia and Turkey.
Shah Deniz 2 is expected to add 16 billion cubic metres (bcm) of natural gas a year beginning in 2019-2020, 10 bcm earmarked for Europe and 6 bcm for Turkey, to the 9 bcm produced by the first stage of Shah Deniz.
The second stage of development includes 26 subsea wells, two offshore platforms, gas and condensate subsea pipelines and the expansion of the Sangachal terminal near the Azeri capital Baku and the South Caucasus Pipeline. It is estimated to cost $28 billion.
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