Russian Energy Giant Taps BitRiver to Mine BTC With Flared Natural Gas

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Russian Energy Giant Taps BitRiver to Mine Bitcoin Using Flared Natural Gas
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Russia’s third-largest oil producer has signed an agreement with BitRiver, a green crypto mining custodian company, to build mining facilities in oil fields.

Russian state-owned energy giant Gazpromneft wants to increase Russia’s contribution to the global hash rate as the North American debate over the alleged impact of bitcoin and ethereum mining on the environment intensifies.

The oil company has partnered with BitRiver, Russia’s largest mining hosting provider, to build green cryptocurrency mining data centers on its oil fields powered by burning natural gas. BitRiver will establish these centers in new oil fields in inaccessible or remote areas. The new facility will allow for the expansion of up to 2 GW of power capacity over the next two years.

“Over the next two years, BitRiver intends to implement projects to create its own data center for power-intensive computing, scaling up to 2 [gigawatts]Include [associated petroleum gas]which will additionally provide high and stable power consumption,” Gazprom founder and CEO said in a statement on Thursday.

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The deal was signed at the St. Petersburg International Economic Forum on June 16, 2022. Gazprom is a subsidiary of Gazprom and is headquartered in St. Petersburg.

BitRiver’s role in the Ukrainian-Russian war

Founded in 2017, BitRiver operates a 100 MW renewable energy mining data center in Bratsk, Siberia.

In April, BitRiver ran into trouble with the U.S. Treasury Department’s Office of Foreign Assets Control, becoming the first cryptocurrency mining company to be sanctioned as part of the isolation of the Russian regime following the February invasion of Ukraine.

The department highlighted that BitRiver has three offices in Russia, despite transferring ownership of its digital assets to Switzerland last year. It also said the miner helped the Kremlin monetize its assets by subcontracting capacity to international clients.

Crusoe Energy Systems pioneers digital flare mitigation

Companies such as U.S. oil major ExxonMobil have recently floated plans to mine Bitcoin using this cleaner energy source in North Dakota.

Meanwhile, Oman’s sovereign wealth fund bought a stake in Denver-based Crusoe Energy Systems Inc. to mine cryptocurrencies using burning natural gas as part of Crusoe’s proprietary “Digital Torch Mitigation” program. North Africa and the Middle East both account for 38% of total global burning.

The Omani government signed a deal to end routine burning by 2030 and has been an investor in Crusoe since early last year before buying a larger stake in April this year.

It remains to be seen whether BitRiver’s natural gas-burning business continues to be sustainable. JPMorgan analyst Nikolaos Panigirtzoglou estimates that the cost of mining one bitcoin has risen to $15,760, meaning less profit for bitcoin miners as the price of bitcoin falls below $20,000 at the time of writing.

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