YPF Luz, a division of the state-owned Argentine energy company YPF has begun an initiative to use residual gas to power Bitcoin (CRYPTO: BTC) mining.
The project seeks to make use of this residue from the earliest phases of oil well drilling and is presently being tested in Vaca Muerta, one of the largest oil fields in the nation.
Oil wells being used to mine Bitcoin
With crypto miners looking for innovative methods to obtain accessible, affordable power sources for their mining operations, a pilot project is being conducted by YPF Luz, a division of the state-owned YPF in Argentina, to use a flare or leftover gas to power bitcoin mining facilities.
This operation, which has been operating for three months in the country's largest oil field, Vaca Muerta, aims to use the gas that would otherwise be burned.
The only method to utilize the gas in these oil fields is to lure interested parties to the zone because it cannot be transported to other locations for usage.
Customers of YPF Luz already pay for this kind of electricity, which is generated on-site with generators set up during the drilling phase of oil wells.
“This first pilot, which is already operating, operates with 1 [megawatt] of generation and a second project is being developed simultaneously to start operating before the end of the year, with about 8 MW, in the Bajo del Toro area,” Martin Mandarano, CEO of YPF Luz, told the national news agency Télam.
Clientele and Methodology
Mandarano also discussed the company's connection with these clients and how they pay for the electricity provided.
The payment varies and is sometimes based on the value of the asset that is mined on global markets, and other times the company sets the price.
Given the nature of the operations, the equipment must be relocated after the well digging and the generator installation is complete.
Although, the mining can then quickly resume since the apparatus is made to be portable and modular so that it may be swiftly transported to different sites.
Also read: BEST PLACE TO BUY CRYPTO MINING EQUIPMENT
An unusual solution to the electricity issue: Mandarano
“We are taking the demand to where the supply is, in this case in Vaca Muerta, when normally the supply is elsewhere, hundreds or thousands of kilometers away, for which it is necessary to build transmission, which is precisely one of the infrastructure problems,” he said.
Like Bitfarms Ltd (NASDAQ:BITF), which recently began operations in a facility in Rio Cuarto, other significant mining companies have already established a foothold in Argentina.
