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 apprehensive about the legalisation of cryptocurrency trade and payments, the Russian government continues to cultivate relationships with important actors in the cryptocurrency mining business.
Gazprom Neft, Russia’s state-owned gas company, has partnered with BitRiver, Russia’s leading crypto-mining colocation services provider, to provide hosting services for major crypto mining operations. The firms officially announced on June 16 that Gazprom will offer energy generated from related petroleum gas to BitRiver’s partner data centres.
Bitcoin mining using flare gas
BitRiver will construct a digital infrastructure based on the oil fields where Gazprom provides crypto mining services using flare gas as part of the agreement.
Vadim Yakovlev, Gazprom’s first deputy CEO, stated that the company’s economic strategy does not allow for the use of digital assets. He explained that the gas giant’s goal is to optimise the use of energy resources in order to enable renewable energy by enabling “new ways of productive 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 a major gas supplier to the European Union. As of 2019, the oil behemoth was said to be 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 build similar developments on isolated oil fields in Siberian regions, where abundant electricity and unprofitable flare gas logistics are available.
The new relationship with Gazprom, according to BitRiver founder and CEO Igor Runets, is part of the company’s ambitious aim to raise its overall power capacity to 2 gigawatt in the next two years.
In October 2021, the Russian government explored a project to mine Bitcoin with related petroleum gas.
Russia is a significant player in both the global energy markets and Bitcoin (BTC) mining. According to the Cambridge Bitcoin Electricity Consumption Index, as of August 2021, the country was the world’s third greatest BTC hash rate producer. Russia dropped to fifth place in the latest index update, with a BTC hash rate of 8.6 EH/s in January 2022, down from 13.6 EH/s in August 2021.