Regal Cuts Gas Price For Ukrainian Affiliate

Regal Petroleum, a London-listed operator in northeastern Ukraine, has agreed to slash the price of gas it sells to its local affiliate Smart Energy to help alleviate the latter’s regulatory burden.

Ukrainian regulation has increased compliance costs for Smart Energy, Regal explained in an August 27 statement. It has therefore expanded a discount at which it sells gas to the company from 0.5% to 2.0%.

“The company has achieved and believes will continue to achieve, on average, a materially higher net price for its gas than could otherwise be achieved through the direct sale of the company’s gas or by selling via an alternative gas trader,” Regal said.

Ukraine’s tax system makes it beneficial for London-based Regal to sell the gas it produces to Kiev-registered Smart Energy, which then passes it on to customers. Smart Energy is a subsidiary of Smart-Holding Group, owned by Ukrainian businessman Vadym Novynskyi, who also controls a 82.65% stake in Regal.