Gazprom Neft invites crypto miners to use company’s energy resources

Associated gas from oil drilling can be used to produce electricity for mining farms

Gazprom Neft invites crypto miners to use company’s energy resources

The first venue for bitcoin mining powered by electricity transformed from associated gas has recently been opened in Siberia. Such cooperation is beneficial both for miners, as they consume a lot of electricity, and for oil companies, which need to get rid of associated gas.

Russian oil drilling giant Gazprom Neft opened a crypto mining farm running on associated gas energy unlocking the power of Russia’s oil and gas resources for the needs of bitcoin (BTC) mining, reports Yahoo Finance. The venue for cryptocurrency mining is on one of the company’s oil drilling sites in the Khanty-Mansi Autonomous Okrug in Siberia. It is using the associated gas from Gazprom Neft’s oil field as an energy source and has its own power plant to transform this gas into electricity.

Normally, the gas that gets freed during the oil drilling is a liability for oil companies, as they have to burn it into the atmosphere. Electricity generation is one of the ways to utilise the gas instead of wasting it. At the same time, one of the greatest costs in cryptocurrency mining is for electricity needed to power mining rigs. Locating mining operations at oil drilling sites where there’s abundant gas to provide virtually free electricity is profitable for both miners and oil companies. The idea is not unique: North American companies Upstream Data and Crusoe Energy Systems are already making use of gas at drilling sites in the US and Canada.

Cryptocurrency mining facilities consume a lot of electricity to power mining rigs. Photo: Marco Krohn

Gazprom Neft is not planning to mine cryptocurrency itself, but the company is ready to open its energy resources to miners and has already piloted a small-scale project with Vekus mining firm. The latter placed a shipping container housing 150 units of Bitmain’s Antminer S7 ASIC chips on the site, and the machines mined 1,8 BTC using 49,500 cubic metres of gas in one month. The oil company is planning to expand the mining farm and get more clients’ equipment as well as more contractors like Vekus.

Gazprom Neft is the oil subsidiary of Russia’s natural gas giant Gazprom, the country’s gas monopolist and world’s tenth-biggest oil producer. Gazprom's cross-border gas pipelines such as Nord Stream and South Stream bring Russian gas to Europe. Meanwhile, Gazprom Neft is a rare example of Russia’s state-owned company that has openly expressed interest in the crypto mining industry. According to CoinDesk, Russia’s nuclear power monopolist Rosatom also opened up its energy supplies for miners last year.

By Anna Litvina