HomeBitcoinRussia appears to be preparing to mine Bitcoin with flare gas

Russia appears to be preparing to mine Bitcoin with flare gas

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The Russian gas company Gazprom, one of the world’s greatest carbon emitters, hopes to decrease its carbon impact by providing flare gas for Bitcoin mining.

Despite being dubious about regulating cryptocurrency trade and payments, the Russian government continues to create relationships with important participants in the cryptocurrency mining business.

Gazprom Neft, Russia’s state-owned gas behemoth, has partnered with BitRiver, Russia’s leading crypto-mining colocation services supplier, to provide hosting services for major crypto mining operations. Gazprom will supply energy generated from related petroleum gas to BitRiver’s partner data centers, the firms announced on June 16.

BitRiver will construct a digital infrastructure based on the oil fields for which Gazprom will provide crypto mining services using flare gas as part of the agreement.

Vadim Yakovlev, first deputy CEO of Gazprom, stated that the company’s business plan does not include working with digital assets. He stated that the gas giant’s goal is to optimize the use of energy resources in order to enable renewable energy by enabling “new ways of beneficial use of associated petroleum gas.”

“Reducing our carbon footprint is an essential component of Gazprom Neft’s ESG policy. […] By combining technologies and competencies with partners, we create the best industry practices for the efficient and environmentally friendly use of natural resources.”

Gazprom is one of Russia’s largest oil and gas enterprises, as well as one of the European Union’s top gas providers. As of 2019, the oil behemoth was considered the world’s third-largest emitter of carbon emissions.

Flare gas-powered crypto mining initiatives, according to the release, are especially significant when working in new oil fields with no established gas transmission infrastructure. Another idea is to locate such developments on isolated oil fields in Siberian regions, where there is excess electricity and unprofitable flare gas logistics.

Igor Runets, BitRiver’s founder and CEO, stated that the new agreement with Gazprom is part of the company’s ambitious aim to raise its overall power capacity to 2 gigatonnes in the next two years.

The Russian government has earlier contemplated a proposal in October 2021 to mine Bitcoin with related petroleum gas.

Russia is a prominent player in both the global energy markets and Bitcoin (BTC) mining. According to the Cambridge Bitcoin Electricity Consumption Index, the country was the third greatest BTC hash rate producer in the world as of August 2021. Russia fell to fifth place in the latest index update, with its BTC hash rate dropping to 8.6 EH/s in January 2022 from 13.6 EH/s in August 2021.

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