Cryptomining firm Genesis Digital Assets Limited (GDA) has launched a new data center in partnership with state-owned utility YPF Luz in Argentina.

GDA’s first South American facility is located in Rincon de Los Sauces, in the Neuquen Province, and has a total capacity of 7MW and 1MW of backup.

GDA Argentina

The 1,200 Bitcoin mining machines will be powered by the Bajo del Toro Thermal Power Plant, jointly owned by YPF, Equinor, and YPF Luz.

The data center will monetize and use stranded gas which the companies said would otherwise be flared into the atmosphere.

GDA said its Bitcoin mining operations could potentially reduce between 25 and 63 percent of carbon dioxide equivalent emissions by repurposing methane gas.

Abdumalik Mirakhmedov, executive president of GDA, said: “We believe that Argentina is an important country for Bitcoin mining, given its abundance of energy sources and business-friendly environment.”

He added: “The opening of our first data center in South America is an important step in our geographic diversification efforts. And this will be yet another opportunity to show the world that Bitcoin mining can have a positive effect on the environment and can be fully integrated into local communities.”

The companies said that by GDA using stranded gas, YPF and Equinor can offset its related costs and contribute to positive environmental changes, ultimately resulting in lower oil prices in the region.

Martin Mandarnano, CEO of YPF Luz, said: “In 2022, we were the first Argentine company to generate electrical energy for crypto mining from flare gas, an innovative solution in line with YPF’s energy transition needs.”

YPF Luz previously announced it was powering a crypto mining operation using waste flare gas in Northern Patagonia in October 2022.

Other companies, such as Crusoe Energy in the US, have claimed data centers powered by the burning of natural gas are reducing emissions. Toronto-based Validus Power feeds on burning gas and turns it into cryptocurrency in a model not dissimilar to GDA and YPF.

GDA operates and owns data centers optimized for Bitcoin mining. The operator currently claims to have 20 data centers in operation with more than 500MW of IT capacity, with the majority being located in Texas, US, and South Carolina, US. The company also operates data centers in Ortrask, Sweden, and North Carolina.

Last month, the company announced the launch of its fifth Texas data center, offering an IT capacity of 36MW, and opened a new facility in Sweden in August 2023.

YPF Luz said it has a renewable installed capacity of 497MW and is constructing two wind farms totaling an additional 218MW in capacity.