Gazprom Neft, the oil subsidiary of Russian gas giant Gazprom has launched a crypto mining farm at one of its oil sites in Siberia. Located in the Khanty-Mansiysk region of northwestern Siberia, the mining farm will use the gas energy from its oil field. It will also have its own power plant to transform the gas into electricity. The move will open greater avenues for Bitcoin mining by making the best use of Russia’s oil and gas resources.
Gazprom’s Oil Unit Opens Crypto Mining Farm
Gazprom Neft is the third-largest oil producer in Russia. It will use the associated gas from an oilfield in the Khanty-Mansiysk region of northwestern Siberia to generate electricity to sell it to the crypto mining operations.
A spokesperson for the company highlighted that Gazprom Neft doesn’t plan to mine for cryptocurrencies itself. However, the oil producer has no hesitation in sharing its energy resources with crypto miners. The oil producer believes that crypto miners could be one of their potential customers in the future through the electricity produced from associated gas.
In the crypto mining industry, one of the greatest barriers comes due to the expensive electricity needed to power the mining rigs.
By locating mining operations at oil drilling sites where there is abundant gas to provide for electricity, both miners and the oil companies can benefit. By doing this, Gazpromneft follows the footsteps of North American companies that are making use of gas at drilling sites in the U.S. and Canada.
Gazprom Is Russia’s Gas Monopolist
Gazprom is Russia’s gas monopolist and the world’s 10th biggest oil producer. The company even counts the Russian government as a shareholder.
In 2020, Gazprom Neft piloted a crypto mining operation with Russian computer hardware manufacturer Vekus at one of its oilfields in Siberia. The pilot led Gazprom to use the associated gas to produce electricity and sell it at prices below the price from the grid to Vekus.