One of the largest carbon emitters in the world, Russian gas giant Gazprom aims to reduce its carbon footprint by providing its flue gas for Bitcoin mining.
The Russian government continues to forge ties with major players in the cryptocurrency mining industry, despite remaining skeptical about legalizing cryptocurrency trading and payments.
Russia’s state-owned gas giant Gazprom Neft has partnered with BitRiver, the largest cryptocurrency mining colocation service provider in Russia, which provides hosting services for major cryptocurrency mining operations. Gazprom will supply BitRiver’s partner data centers with electricity generated from associated petroleum gas, the companies officially announced on June 16.
As part of the collaboration, BitRiver will develop a digital infrastructure based on Gazprom oil fields to provide cryptocurrency mining services from flare gas.
Gazprom First Deputy Chairman Vadim Yakovlev emphasized that Gazprom’s own business model does not allow working with digital assets. The gas giant aims to optimize the use of energy resources to enable renewable energy, enabling “new forms of beneficial use of associated petroleum gas,” he noted, stating:
“Reducing our carbon footprint is an essential component of Gazprom Neft's ESG policy. […] By combining technologies and competencies with partners, we create industry best practices for efficient and environmentally sound use of natural resources.”
Gazprom is one of Russia’s largest oil and gas companies and also one of the largest gas suppliers to the European Union. The oil giant was ranked as the world’s third largest producer of carbon emissions as of 2019.
According to the announcement, flare gas-fueled crypto mining projects are especially relevant when working on new oil fields that do not have an established gas transmission infrastructure. Another option is to establish these developments in remote oil fields in the Siberian regions, as these fields are associated with surplus electricity and unprofitable flare gas logistics.
BitRiver founder and CEO Igor Runets noted that the new partnership with Gazprom is part of the company’s ambitious plan to increase its total power capacity to 2 gigawatts in the next two years.
The Russian government previously considered a project to mine Bitcoin with associated petroleum gas in October 2021.
Russia is a major player in global energy markets as well as Bitcoin (BTC) mining. The country was the third largest BTC hash rate producer in the world as of August 2021, according to the Cambridge Bitcoin Electricity Consumption Index. According to the latest index update, Russia fell to fifth place as its BTC hash rate fell to 8.6 EH/s in January 2022 from 13.6 EH/s in August 2021.