By David French and Tom Arnold

DUBAI, June 21 (Reuters) - Aluminium Bahrain has approached banks for a $750 million loan towards the financing of its Line 6 expansion project, sources told Reuters on Tuesday.

Alba will become the world's largest single aluminium smelter complex, boosting its annual output by 540,000 tonnes to 1.5 million tonnes per year by adding the sixth "potline", used in producing the metal from raw materials such as bauxite.

Production from the facility is expected to start in early 2019 and Alba is raising around $3 billion to help finance the scheme, through a mixture of loans from banks and export credit agencies and an international bond or sukuk issue.

Alba had initially targeted $3.5 billion, but this was cut back due to lower oil and commodity prices, it said last month.

The first stage of this financing, the commercial bank loan, has begun with banks invited to participate in the deal in recent days, the sources said.

Alba, which declined to comment, is seeking a seven-year loan which has an amortising structure, according to two of the sources. Under an amortising facility, the loan amount is repaid during the lifetime of the deal as opposed to just servicing the interest payments and repaying the principal at the end.

Pricing for the deal will range from 300 basis points to 350 basis points over the London interbank offered rate, the sources said, adding that banks can provide cash either as conventional funds or as part of a tranche compliant with Islamic financing.

Alba has asked banks to let it know if they will participate by the first week of next month, the two sources said, with one adding it aims to finalise the loan by the end of July.

(Editing by Alexander Smith) ((davidj.french@thomsonreuters.com; +971 4 362 5864; Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))