SOFIA, July 27 (Reuters) - Russia’s state gas company Gazprom has agreed to pay 349 million euros ($412 million) in advance for capacity on the Bulgarian extension of the TurkStream gas pipeline, Bulgarian state network operator Bulgartransgaz said on Tuesday. Gazprom’s export unit Gazprom Export has agreed to pay upfront for booked capacity from July 1, 2021 until June 30, 2023, Bulgartransgaz said in a statement. Bulgaria’s 474 km gas pipeline, which transports Russian gas from its southern border with Turkey to its western border with Serbia - providing a link to the Russia-backed TurkStream twin pipeline to Serbia and Hungary, became operational in January. Bulgartransgaz said it would use 461 million levs ($278 million) of the proceeds to make advance payments to Saudi-led group Arkad, which built the pipeline for 1.1 billion euros. The Bulgarian gas network operator will also use the money to cover 65 million euros in loans to commercial banks. Bulgaria meets most of its gas needs with supplies from Gazprom. (1 = 0.8477 euros) $1 = 1.6557 leva Reporting by Tsvetelia Tsolova Editing by Mark Potter Our Standards: The Thomson Reuters Trust Principles.