Bitcoin Miners Eyeing Argentina’s Natural Gas Cash Cow

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British firm FMI Minecraft is engaged on a venture to mine the cryptocurrency Bitcoin utilizing pure fuel from Argentina’s Vaca Muerta.

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The venture could be within the Zapala free commerce zone within the province of Neuquén and supply fuel from the Vaca Muerta, or ‘Lifeless Cow’ shale formation.

“Vaca Muerta is nice as a result of there are greater than 20 producers of excellent high quality fuel,” FMI companion Eduardo Meyer informed NGI.

[Want today’s Henry Hub, Houston Ship Channel and Chicago Citygate prices? Check out NGI’s daily natural gas price snapshot now.]

The mining operation would initially contain 100 MW of gas-fired energy, which might be expandable to 250 MW. Meyer mentioned Argentina has “good suppliers of generators and mills, and human assets.” He added, “there’s a massive oil and fuel scene in Argentina.”

The venture would develop native fuel transport capability, present jobs, and all suppliers could be native, Meyer mentioned. “Our plan is to work with the native college to create a service hub to repair mining machines.”

With China outlawing cryptocurrency, most Bitcoin mining is completed in North America, however that market has turn out to be saturated, Meyer mentioned. Pure fuel for energy is affordable in Argentina and the free commerce zone makes the venture enticing.

Bitcoin mining is the method by which specialised computer systems confirm bitcoin transactions. The method permits miners so as to add “blocks” of the distributed public ledger, aka the blockchain, on which transactions are recorded. 

“Mining is the way in which we are able to make the community protected and safe,” Meyer mentioned. “By doing so the miner receives an incentive because the community mints a brand new bitcoin as cost to the miner.”

The important thing to the success of a venture is entry to the mining machines, which primarily come from China and are backlogged, Meyer mentioned. The opposite important part is vitality.

The mining course of is very vitality intensive. In the middle of the final 12 months, Bitcoin mining consumed 204 TWh, as a lot vitality because the nation of Thailand, based on a research by know-how evaluation platform Digiconomist.

“However conventional banking makes use of plenty of vitality too,” Meyer mentioned. “Bitcoin makes use of plenty of vitality, sure, but it surely’s a extra clever system.”

Gaining Floor In Latin America

Cryptocurrency has turn out to be considerably mainstream in the USA, with everybody from celebrities Matt Damon to Larry David selling it. Nevertheless it’s catching on in Latin America too.

In a area with a historical past of excessive inflation and forex devaluations, cryptocurrency has been hailed by some as the way forward for monetary transactions. El Salvador has adopted Bitcoin as authorized tender. Argentina’s President Alberto Fernández has mentioned it may assist struggle the nation’s torrid historical past with inflation.

Meyer sees Bitcoin as extra of an asset than a forex, and a “good hedge on inflation.”

Based on blockchain information platform Chainalysis, Brazil noticed the very best worth of cryptocurrency flows in Latin America in 2021, at $144 billion. Argentina was second at $103 billion.

FMI isn’t the one firm becoming a member of the Bitcoin mining house in Argentina. Late final 12 months, international Bitcoin mining firm Bitfarms Ltd. signed engineering, procurement and building contracts and commenced building of a 210 MW manufacturing facility within the nation. The kind of vitality for use wasn’t specified.

Is Bitcoin A Pure Gasoline Match?

Argentina is house to plentiful pure fuel assets. Vaca Muerta has been mentioned to be geologically corresponding to the Eagle Ford Shale in South Texas. To attempt to jumpstart exploration and manufacturing (E&P) growth from the realm, the Fernández authorities has held quite a few pure fuel buy tenders. 

In a hydrocarbons promotion invoice despatched to congress in September, Argentina’s authorities additionally mentioned pure fuel could be a necessary a part of the nation’s vitality transition. The invoice consists of value stabilization mechanisms and ensures that volumes produced for export will see preferential tax charges and entry to capital markets.

The federal government has additionally given the inexperienced gentle to a brand new Vaca Muerta fuel pipeline. The $1.5 billion, 24 Mm3/d Néstor Kirchner pipeline is to run from Tratayen in Neuquén to Salliqueló in Buenos Aires province. Officers have mentioned the pipeline could be in operation by winter 2023.

Unconventional manufacturing hit a document in Argentina in January at 69 Mm3/d, up 2% from December and 42% from the identical month in 2021. Total pure fuel manufacturing was 130 Mm3/d in January, up 12% 12 months/12 months. Quite a few E&P corporations have established aggressive manufacturing targets for the 12 months.

At an oil and fuel convention in Buenos Aires final week, Argentina vitality minister Darío Martínez mentioned there was no ceiling to grease and fuel manufacturing within the nation, and that manufacturing was poised to “explode.”


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