Sterling Digital (LSE:ASIC) has signed a five-year gas purchase agreement to secure natural gas to power bitcoin mining operations in West Texas.
The agreement commits the AQSE-listed company, which is developing low-energy-cost digital asset mining operations in the United States, to a minimum purchase of 96,360 MMBtu per year for the first four years and guarantees availability of up to 6,500 MMBtu per day to support up to 25 megawatts of computing capacity.
Price is set at the average WAHA gas price based on the preceding two months plus a transportation fee of US$0.33 per MMBtu and a service fee of US$0.22 per MMBtu, and Sterling will pay a deposit equivalent to 61 days' estimated consumption to be held in escrow and refundable to the extent unused.
The initial term is five years with the option to extend for up to two further one-year periods and the agreement grants surface-use rights over a 1.5 acre parcel in Martin County, Texas for the mining site.
"We now have access to a reliable, competitively priced supply of up to 6,500 MMBtu per day, supporting our strategy of developing low-cost, energy-led bitcoin mining operations," Stefan Michealides, CEO, said.
The deal accesses the underutilised WAHA pipeline to convert otherwise stranded gas into on-site electricity, establishing a formal framework for purchase and delivery and a pathway to commence offtake and start production.
