Russian Oil Giant Launches Bitcoin Mining Operation Using Associated Gas
Bitcoin hash war is on!
The third-largest oil producer in Russia, Gazprom Neft has launched a cryptocurrency mining operation at one of its oil sites in Siberia.
Gazprom Neft is an oil unit of Russian gas giant Gazprom, a partially state-owned multinational energy corporation which is the largest publicly-listed natural gas company in the world and also the largest company in Russia by revenue.
The company doesn’t have any plans to do the mining itself but will be sharing its energy resources with cryptocurrency miners.
The company will be using the associated gas from an oilfield in the Khanty-Mansiysk region of northwestern Siberia to generate electricity that it will be selling to the crypto mining operations.
Associated gas is a product of oil production which is most often pumped back underground. Gazprom Neft believes crypto miners could be one of the customers for the electricity produced from associated gas.
The company has connected a mobile container with computing equipment to the APG power plant and is offering the electricity to the crypto miners.
“Energy from APG can power data centers and mining farms. This will increase the percentage of rational use of raw materials. This is especially true for remote regions of Siberia and the Arctic, where the transportation of associated gas from the fields is unprofitable,” Alexander Kalmykov, head of the Gazprom Neft blockchain technology center told Russia publication Forklog.
The company launched a project in 2020 and Russian computer hardware manufacturer Vekus was the first local purchase of electricity from processed gas. The company leveraged 150 Antminer S9 ASICs that used 49,500 cubic meters of associated gas and produced 1.8 BTC.
While crypto miners get cheaper electricity, Gazprom Neft was able to achieve 95% use of the associated gas, for the first time in 2020.