BAKU, Nov 4 (AFP) - The European Bank of Reconstruction and Development and Azeri state oil company SOCAR have ironed out details of a 170-million-dollar (130-million-euro) loan to develop the controversial Shah Deniz Caspian gas field, they said Thursday.
"We've finalized all the documents, but the official signing is planned for December," EBRD spokeswoman Kate Dunn said by telephone from London.
SOCAR confirmed that a deal was made, saying it had signed a "technical" agreement with the bank in Baku.
Recoverable reserves in the Shah Deniz field have been estimated at 625 billion cubic meters (2.187 trillion cubic feet) of natural gas, making it a world-class field.
However, the project has been dogged from its inception by worries over whether a market can be found for the gas. Rival producers, including Algeria, Iran and Russia are already supplying gas to its target markets Turkey and Europe.
The lion's share of the loan, 110 million dollars, will go to the development of the offshore gas field with the remainder to be invested into a pipeline that will carry the gas from Baku through Georgia to a port in northeast Turkey, a SOCAR representative said.
SOCAR holds a 10-percent stake in the 3.2 billion dollar project, 900 million dollars of which covers the cost of the pipeline.
The EBRD has invested close to 600 million dollars into various Caspian oil and gas projects to date, including the much-lauded Baku-Ceyhan pipeline slated to start pumping oil next year.
The pipeline from Shah Deniz is expected to go online in 2006.
11/04/2004 19:11 GMT - AFP