Union Jack Oil, an onshore hydrocarbon production company, has announced plans for a natural gas-fueled Bitcoin mining site in the UK.

Union Jack has signed a letter of intent (LOI) with Texas-based 360 Energy, a natural gas offtake and monetization provider, to design a Bitcoin mining site in West Newton, in East Riding of Yorkshire, England.

Jointly owned by Union Jack and Rathlin Energy, another UK oil firm, the existing gas wells at West Newton have been out of use for some time. Union Jack plans to deploy 360 Energy’s In-Field Computing (IFC) technology to utilize the natural gas at West Newton to power on-site Bitcoin mining data centers.

The LOI envisages the IFC initially being deployed at the West Newton A site, converting natural gas from the WNA-2 well into Bitcoin, and subsequently being expanded to encompass other discoveries.

The company stated that regulatory uncertainty had hampered plans to develop onshore gas sites like the one at West Newton. The company had been searching for ways to make use of its dormant assets to generate near-term monetization.

“Onshore developers and producers have been forced to ‘think outside the box’ in order to make progress and deliver growth,” said David Bramhill, executive chairman of Union Jack.

“The board of Union Jack believes this proposed concept to produce Bitcoin through mining operations is innovative, offers strong scope for a sustainable return, and could lead to the company introducing a new Bitcoin Treasury strategy, on success,” Bramhill added.

The response by Union Jack’s shareholders on the stock message board was mixed at best.

While some expressed hope for the project, others derided the concept of using gas to mine Bitcoin as a mere “gimmick.”

“[The] economics would never stack up even at current prices. And then there is (sic) regulatory issues,” one commenter opined.

“Gas-to-Bitcoin will never happen, it’s pure theater,” said another.

That kind of cynicism hasn’t stopped multi-million dollar firms from pursuing natural gas as a fuel for Bitcoin production. NRG Energy recently signed an agreement to power a 295MW mining site in Texas using natural gas.

Earlier this month, Ireland’s National Trust lodged an appeal against a proposed data center that also planned to utilize natural gas.

Halliburton, the second-largest oilfield services business in the world, is an investor in 360 Energy, which uses stranded or flared gas at oil fields to power its Bitcoin miners.

Companies using flared gas to power servers claim the process benefits the environment because it means wasted energy is used, with the gas burned off more cleanly. The likes of Hyperscale Data, MARA, and NYDIG mine crypto through gas flare deployments. While they are not uncommon in the US, such deployments are less common in the UK and Europe.

On its website, 360 Energy says it has deployed 14 of its containerized IFC/Apex Gas Offtake units to date. After first deploying at its own wells in 2021, the company says it has partnered with several companies for deployments in Texas, including Norwood Energy and Barnett Shale. The firm says its In-Field Computing modules can run off Starlink and/or 4G LTE Internet.