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YPF Luz, a subsidiary of the Argentine state oil company YPF, is currently piloting a project to mine bitcoin with residual gas. The initiative, currently being tested in Vaca Muerta, one of the largest oil fields in the country, seeks to take advantage of this byproduct from the initial stages of oil well drilling.
Cryptocurrency miners are always looking for new ways to get cheap and convenient power sources to mine. YPF Luz, a subsidiary of the state-owned YPF in Argentina, is running a pilot project to take advantage of flare or tail gas to run bitcoin mining. This project, which has been ongoing for three months in Vaca Muerta, a large oil field in the country, seeks to exploit this gas, which would otherwise be burned.
The gas in these oil fields cannot be taken elsewhere to be used, so the only way is to bring interested parties to the zone. YPF Luz already has a number of customers paying for this type of power, which is produced on site with generators installed during the oil well drilling phase.
Martin Mandarano, CEO of YPF Luz, stated:
This first pilot, which is already operational, operates with 1 [megawatt] of generation and a second project is being developed at the same time to start operation before the end of the year, with approx. 8 MW, in the Bajo del Toro area.
Mandarano also pointed to the relationship the company has with these customers, and how they pay for this generated power. The payment varies, and is sometimes linked to the price of the asset extracted on international markets, and sometimes the price is set by the company. However, he did not specify under what conditions a company would pay one way or the other.
Given the nature of the operations, the equipment must be moved to new locations once the drilling of the well in which the generator is installed is completed. However, this is not a problem, because the equipment is designed to be portable and modular to be transported quickly to other locations.
Mandarano clarified that this new focus is part of an atypical solution to the electricity problem. He stated:
We take the demand to where the supply is, in this case in Vaca Muerta, when normally it is somewhere else, hundreds or thousands of kilometers away, for which it is necessary to build transmission, which is precisely one of the infrastructure problems.
Other large mining companies have already established themselves in Argentina, such as Bitfarms, which recently started operations in a facility in Rio Cuarto.
What do you think about YPF Luz’s on-site energy generation plans for Bitcoin mining? Tell us in the comments section below.
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