YPF Luz, a subsidiary of Argentina’s state-owned oil company YPF, is currently testing a project to power bitcoin mining operations with residual gas. The effort is currently being tested in Vaca Muerta, one of the country’s largest oil fields, and seeks to use this byproduct from the early stages of oil field drilling.
Argentine company YPF Luz takes bitcoin mining to oil wells
Cryptocurrency miners are always looking for new forms of cheap and convenient sources of electricity to run their mining operations. YPF Luz, a subsidiary of Argentina’s state-owned company YPF, is implementing a pilot project that uses flare and residual gas to power bitcoin mining operations. The project, which has been running for three months in Vaca Muerta, a large oil field in the country, seeks to utilize this gas that would otherwise be burned.
The gas from this field cannot be taken elsewhere and utilized, so the only way is to bring interested parties to the zone; YPF Rus has already had a series of customers paying for such power and is producing on-site with generators installed during the oil well drilling phase.
Martin Mandarano, CEO of YPF Luz, said,:
This first pilot project is already in operation, producing 1 [megawatt] of electricity; the second project is being developed simultaneously in the Bajo del Toro region to be operational by the end of the year with about 8 MW.
Customers and Methodology
Mandarano also mentioned the company’s relationship with these customers and how they pay for this generated power. Payments vary, sometimes linked to the price of the mined assets on the international market, and sometimes the price is fixed by the company. However, he did not specify the conditions under which the company pays unilaterally.
Due to the nature of the work, once the drilling of the well where the generator is installed is finished, the equipment must be moved to a new location. However, this is not a problem. This is because the equipment is designed to be portable and modular so that it can be quickly transported to another location.
Mandarano revealed that this new focus is part of an atypical solution to the power problem. He stated.
Usually, when the supply is elsewhere, hundreds or thousands of kilometers away, we are taking where the demand is, in this case Vaca Muerta, for which we need to build transmission, and this is exactly one of the infrastructure problems.
Other major mining companies have already established a presence in Argentina, such as Bitfarm, which recently started operations at its facility in Rio Cuarto.
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