Turkey secures loans to buy stake in Shah Deniz gas project

State-run Turkish Petroleum Corporation said it secured $1 billion in loan agreements to take on French energy company Total's stake in an Azeri gas project.

The state-run company, known by its Turkish initials TPAO, said it would bring its stake in the Shah Deniz gas field in Azerbaijan to 19 percent and through the deal become one of the largest shareholders after British energy company BP.

TPAO secured two $500 million loan agreements, one each from state-run lender Vakifbank and private Isbank. Another $450 million for the acquisition from Total would come from TPAO's coffers.

The Turkish company in May signed an agreement to take on Total's 10 percent stake in Shah Deniz.

Turkey would host part of a pipeline network to carry gas from the Azeri gas field to the European market. The company said its "long-term strategic objectives" are secured through the loans.

First gas from the second phase of the Shah Deniz gas field is expected by Europe in late 2018.

In May, BP said most of the contracts for a natural gas pipeline from Azerbaijan to Europe have now been awarded.

Pipeline construction is slated for January and should be completed by 2017.