More than $3 billion is needed to overhaul the Soviet-era natural gas transit network in Ukraine, Ukrainian Energy Minister Yuri Prodan said Wednesday.

European consumers rely on Russian energy company Gazprom for about a quarter of their annual gas needs, though the bulk of those supplies runs through Ukraine's pipeline network.

"In order for the gas transport system to operate normally, though it is working normally now, it needs modernizing, and I think that the first stage [will require] $3-$4 billion, that is what is needed to intensively invest in the modernization," Prodan said Wednesday.

Members of the European community have looked to alternative gas transit networks from the Caspian region to help break the Russian grip on the region's energy sector. Gazprom, for its part, aims to build South Stream, a pipeline that would avoid geopolitically sensitive territory in Ukraine.

Visiting U.S. Vice President Joe Biden offered Ukraine a new $50 million aid package to help support energy and economy developments.

Russian President Vladimir Putin warned European leaders the region's energy sector was at risk because of Ukraine's mounting gas debts.

Despite the concerns over Ukraine, the Gazprom board of directors said Tuesday the European market remains a "top priority."