Associate gas pilot could be a tremendous boon for Russian bitcoin miners

Source: Adobe / Leonid Fish

Russian bitcoin miners (BTC) could face a massive, unexpected eco-friendly windfall if a pilot gets the country’s energy giants to devote themselves to crypto mining en masse.

More details were released about a facility operated by Gazprom’s oil arm, Gazprom Neft, which asked miners to settle in an oil field in the Khanty-Mansi region late last year. The miners worked with a month-long bitcoin mining.

Pumping oil from such fields creates associated gas – not the intended destination of oil production.

Typically, such a gas is flared – essentially just burned – and pollutants are released into the atmosphere. The associated gas can also be converted into electrical energy on site. Given that the Khanty-Mansi region is conveniently located (from a mining point of view) in Western Siberia, known for its icy winters, cooling costs in the region are also low.

According to Ugra-News, the pilot notes that Gazprom Neft is supplying enough electricity to mine a transport of BTC 1.8 (USD 64,000) with a capacity of 49,500 cubic meters of associated gas within one month using 150 Antminer ASIC S9 devices. Subsidiary Gazprom carried out the energy conversion process.

According to media reports, “preliminary estimates” from 2020 show that around 34 billion cubic meters of associated gas were produced in the region last year.

The miners on the oil field paid “less than $ 0.04” per kW of energy. According to Global Petrol Prices, companies typically pay at least twice as much for electricity in other parts of the country.

However, the pilot’s impact could be even greater as the pilot is in the early stages and there are at least nine such oil fields in the region. The media quoted Natalya Komarova, longtime governor of the Autonomous Okrug Khanty-Mansiysk, and a former MP.

“The region has several competitive advantages for hosting [crypto miners]. Favorable factors include the low air temperature, which significantly reduces energy consumption, the availability of land that meets the basic requirements for the location of [mining] Centers, a system of telecommunications and transport infrastructure. “

The pilot is also supported in parliament by Pavel Zavalny, the chairman of the parliamentary energy committee – a man who also happens to be the president of the Russian gas company. Zavalny was quoted as saying, albeit with some caveats on other possible uses of crypto and the legal status of tokens.

“Crypto mining is one of the ways to monetize cheap electricity where there is a surplus or where the cost of generating electricity is higher than market prices. In this case, it makes more economic sense to monetize Bitcoin and exchange it for material goods. This is a competitive way to monetize the electricity produced. “

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