Asian and European lenders unveiled a $1 billion finance package Friday to help fund an Azeri natural gas field meant to diversify the European energy sector.

The Asian Development Bank and the European Bank for Reconstruction and Development, with support from the Black Sea Trade and Development Bank, announced funding support for the second stage of the Shah Deniz natural gas field off the coast of Azerbaijan.

The ADB said the project is "crucial" for energy security in the European economy.

"This project is one of the European Union's highest priorities for the energy sector," EBRD Managing Director for Energy and Natural Resources Riccardo Puliti said in a statement. "It is key for energy security because it diversifies routes and sources of gas supply."

Most of the Russian gas bound for the European market runs through the Soviet-era pipeline network in Ukraine, where lingering conflicts and economic rows with the Kremlin create risks to European energy sector.

A series of pipelines are planned for delivery of natural gas from the Shah Deniz reserve basin in the Azeri waters of the Caspian Sea. Development of Shah Deniz is underway from a consortium led by British energy company BP.

BP's subsidiary in Azerbaijan said progress on gas developments meant to aid European energy security was ahead of schedule. More than 500 billion cubic feet of natural gas per year is slated for exports from Shah Deniz to the European market through a network of 2,100 miles of pipelines by late 2018.

BP, leading Azeri developments alongside a state-backed energy company, has awarded more than $1 billion in development contracts since selecting the Trans-Adriatic pipeline as its option for Shah Deniz in 2013. TAP would connect to the Trans-Anatolian natural gas project running through Turkey to the Greek border. Construction is slated to begin in 2016.

"[Shah Deniz] will be the largest gas field development project undertaken in Azerbaijan, generating more economic opportunities and helping to boost closer regional ties with Georgia and Europe," Michael Barrow, deputy director general of ADB's private sector operations department, said in a statement.

ADB estimates the total cost of Shah Deniz development to exceed $47 billion.