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Testing bitcoin mining
Paving way for larger project; making use of plentiful ANS natural gas
Kay Cashman
On Nov. 5, the Alaska Department of Natural Resources' Division of Oil and Gas received a land use permit application from Austin, Texas-based TA Infrastructure Management LLC requesting to install a small data center module on a trial basis to utilize currently produced natural gas in the Hilcorp-operated Endicott oil field, which is part of the Duck Island unit.
The proposed data center site is the unit's Satellite Drilling Island, or SDI, a gravel oil and gas production facility pad. The data center module will contain 1.4 megawatts of bitcoin mining computers -- a digital process that supports cryptocurrency.
The trial data center module will consume power from existing power generation equipment owned by Hilcorp Alaska LLC.
The purpose of this project, TA Infrastructure said, is to demonstrate the ability to operate data center infrastructure on the North Slope and identify any logistical or operational challenges that a larger project might have.
DNR Commissioner John Boyle told Petroleum News in a prepared statement: "We are very encouraged that companies are pursuing opportunities like this in Alaska, and DNR hopes to continue to see more opportunities for computing and data center development using Alaska's abundant resources. The Division of Oil and Gas is currently adjudicating this permit application through the public process."
The term requested in TA Infrastructure's application is four years, from November 2024 to November 2028.
Installation Installation of the data center module will be overseen by a Hilcorp team, including "logistics onto the site, placement of the module on the existing pad and the electrical connection from the transformer already in place to the data center module," TA Infrastructure said in its application.
Transportation to the site will be done by a single truck out of Deadhorse on existing roads.
Placement of the module at the site will involve a single crane to move the container from the truck onto the pad with no additional construction or surface disturbance necessary.
Electrical connections will be performed by Hilcorp and consist of five total cables running 60 feet each from the transformer to the data center module.
"We are estimating less than a week total to complete installation once the data center module arrives at the site," TA Infrastructure said.
"Overall, we have designed this pilot to have minimal impact to the existing pad site," the tech firm said.
Collaborating with Hilcorp TA Infrastructure said it has been "collaborating with Hilcorp on strategic projects to monetize produced natural gas on the North Slope" that is associated with some oil fields and otherwise stranded from traditional sales markets.
"As part of those efforts, we have developed a business model whereby we can utilize currently produced natural gas to generate power and co-locate data centers to consume that power on the North Slope," TA Infrastructure said in its application.
The pilot program will consist of a single 40-foot shipping container that will serve as a modular data center. Its computers will consume power from Hilcorp's already installed power generation equipment "on a continuous basis 24/7 for 4 years," TA Infrastructure said.
"Overall, we believe this project and future larger projects present significant opportunity to monetize natural gas on the North Slope and attract new high-tech industries to the state of Alaska," TA Infrastructure said.
Connected by causeway The Duck Island unit was initially developed from two artificial gravel islands, the main producing island and the Satellite Producing Island, connected by a causeway to the mainland.
BP had proposed drilling ultra-extended reach wells to tap the Liberty oil reservoir, located on federal leases in shallow Beaufort Sea waters about 6 miles offshore and 15 miles east of Prudhoe Bay.
A monster rig was to bore the wells from the SDI at BP's offshore Endicott field. In November 2010, however, BP announced it was suspending construction pending an engineering review, and the rig stood idle at Endicott for several years before eventually being removed.
Comments welcome TA Infrastructure Management's application package is available for review at the Division of Oil and Gas' Permitting Section, 550 West 7th Avenue, Suite 1100, Anchorage, AK 99501, or online at http://dog.dnr.alaska.gov/Newsroom.
Send comments to [email protected] or to the division address above. All comments must be in writing. A copy of the final decision will be sent to any person who provides written comments. An eligible person affected by this decision may appeal or request the commissioner's reconsideration in accordance with 11 AAC 02.
All comments must be received by the comment deadline: 4:30 p.m., Alaska Standard Time, Nov. 29.
The Department of Natural Resources complies with Title II of the Americans with Disabilities Act of 1990. This notice will be made available in alternative communication formats upon request. Individuals with disabilities who may need auxiliary aids, services, or special modifications to participate may contact the address above or call 907-269-8411.
Editor’s note: Nathaniel Herz of Northern Journal contributed to this story.
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