UK-listed energy company Union Jack Oil announced plans to convert gas from its West Newton project into electricity for Bitcoin mining, which could become the UK's first profitable 'energy to cryptocurrency' project.
The project could bring early cash flow to previously undeveloped gas wells, the company stated in its operational report on Thursday.
This project is being conducted in collaboration with Rathlin Energy and American 360 Energy, the latter focusing on converting stranded or flared gas into electricity for data center use.
According to a non-binding letter of intent, the partners plan to deploy 360's on-site computing technology for Bitcoin mining at West Newton A, with implementation subject to regulatory approval.
If successful, the project could prompt Union Jack to introduce a new Bitcoin vault strategy.
West Newton: discovered but undeveloped
Union Jack Oil acquired its stake in West Newton in 2019, where Rathlin Energy discovered gas. However, delays in planning and regulatory uncertainty have hindered development.
The company chose to use natural gas on site to power Bitcoin mining rigs, generating early revenue.
New changes in energy monetization
Union Jack's mining operation represents a new way for energy companies to utilize stranded resources. Many oil and gas firms are trying to monetize gas that would otherwise be wasted through Bitcoin mining.
This model is being applied elsewhere. In North Dakota, USA, ConocoPhillips launched a pilot program supplying excess gas to Bitcoin miners. In Argentina, the oil company Tecpetrol is running mining equipment using residual natural gas from drilling operations. Canadian company AgriFORCE is using stranded gas to power 120 Bitcoin mining rigs in Alberta and plans to expand.
