Gas tanks are pictured at Austria's largest natural gas import and distribution station in Baumgarten May 2, 2014.
Gas tanks are pictured at Austria's largest natural gas import and distribution station in Baumgarten May 2, 2014. Austria rescued Gazprom's South Stream pipeline project last month so it can bring its own gas from the Black Sea, a source told Reuters, which will be the first time the Russian gas exporter has agreed a competitor's gas access to its pipelines. Picture taken May 2. To match story Reuters

After a long suspense, Russia finally agreed to resume natural gas supplies to Ukraine after forcing the latter to pay up its dues and make advance payment for the upcoming supply. The details of the deal, valid until March next year, were announced by Russian gas exporter Gazprom.

The deal clinched at Brussels last week, makes Kiev to pay almost $3 billion in debt and pre-payments. At the Brussells meeting the European Union helped in resolving the deadlock on payment of past-due bills of Ukraine to Gazprom, reported New York Times.

Ukraine has been asked to make payments amounting to some $3.1 billion for past-due gas supplies before the end of this year, using the money it borrowed from the International Monetary Fund. The deal also provides the leeway for Ukraine to buy another $1.5 billion at discounted prices for the remainder of the winter.

EU Under Pressure

But the gas deal put the European Union in an awkward position. It is seen as assisting Ukraine to pay up its debt to Russia's Gazprom, weeks after it imposed hard economic sanctions on Russia in order to make it alter its policies in Ukraine.

The Guardian quoted Alexey Miller, CEO, Gazprom saying that Russia would restart the gas supply within two days of the agreed payment by Ukraine. "Now everything depends on Ukraine is going to make this payment. We hope this can happen by end of next week," Miller told Russian TV Rossiya 24. As a special gesture, Gazprom will also not apply a contractual clause of "take-or-pay" until March next year. The clause had a fine on the buyer if it takes less gas than specified in the long-term contract.

Safe Gas to Europe

Meanwhile, Arseniy Yatsenyuk, prime minister of Ukraine assured safe transit of gas to the EU and said it "won't give Russia a chance to blackmail Ukraine and Europe". The new traiff for Ukarine, was approved by Russian Prime Minister Dmitry Medvedev after he formally signed the decree to allow a $100 discount on the gas export tariffs in case the price for 1,000 cubic meters of gas supplies to Ukraine is $333.3 and more.

"The decree will temporarily offer relief until March 31, 2015, a special procedure for calculating the rates of export tariffs depending on the level of the contract price for the natural gas delivered from the territory of the Russian Federation to the territory of Ukraine," reported Awip News. But the rider is that if the gas price is less than $333.3, then the discount will be restricted to 30 percent of the price.