YPF Luz (a subsidiary of the Argentine State Oil Company YPF) is currently testing a project to generate residual gas for bitcoin mining. The project, currently in testing in Vaca Muerta (one of the largest oilfields in the country), aims at taking advantage of this byproduct during the early stages of oil drilling.
YPF Luz in Argentina Takes Bitcoin Mining to Oil Wells
In order to continue their mining operations, cryptocurrency miners look for cheap power sources that are convenient and affordable. YPF Luz in Argentina is a subsidiary to the state-owned YPF. It has launched a pilot project that makes use of residual or flare gas to run bitcoin mining operations. The project has been in operation for three months at Vaca Muerta oilfield, in Argentina. It aims to use this gas that would otherwise have to be burnt.
It is impossible to transport the gas from these oilfields to other places for it to be used. Therefore, the only option is to get interested parties to this zone. YPF Luz has a number of customers who pay for this type of power. It is produced locally with generators that were installed in the drilling phase of oil well drilling.
Martin Mandarano CEO, YPF Luz stated:
The pilot is currently operating with 1 [megawatt]A second project, which will be operating in parallel, is currently being planned for the Bajo del Toro region. It has approximately 8 MW.
Modus Operandi for Customers
Mandarano also mentioned the relationships the company maintains with its customers and the way they pay for that generated power. It varies and can be tied to an asset’s price on international markets. Other times, the company will fix the price. But he didn’t specify which conditions a company would have to pay.
Because of its nature, equipment has to be transported when drilling for the well is complete. This is not a problem as the equipment can be easily transported to different locations.
Mandarano explained that his new emphasis is part of an unusual solution for the power problem. He added:
In this instance, we are taking the demand where there is supply, and in Vaca Muerta. Normally, the supply can be found elsewhere hundreds of thousands of km away. For which transmission is required, which is exactly one of the infrastructure issues.
Bitfarms is one of the other major mining companies that have established an Argentina presence. It recently opened a Rio Cuarto facility.
What do you think about YPF Luz’s onsite energy generation plans for Bitcoin mining? Leave a comment below.
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