Kazakhstan Plans to Turn Oil-Field Gas Into Crypto Mining Power

Kazakhstan is exploring a new power source for crypto mining: associated petroleum gas that would otherwise be flared at oil fields.

The move follows a July decree signed by President Kassym-Jomart Tokayev that introduced a mechanism allowing associated petroleum and natural gas from oil and gas fields to be used for autonomous electricity generation, including for digital mining when the resources are not needed for state requirements.

The government is now developing a legal framework to define how companies can use the model, while miners and oil companies are already assessing potential projects.

Kazakhstan Sees Up to 1.3 TWh of Potential

Daniyar Mubarakov, head of the Blockchain and Digital Mining Association, told Euronews that around 300–340 million cubic meters of associated petroleum gas were flared in Kazakhstan in 2024.

If converted into electricity, the gas could have generated an estimated 1.2–1.3 TWh, according to Mubarakov.

The model would involve miners installing equipment to convert the gas into electricity at or near oil fields. A field producing about 100,000 cubic meters of associated gas per day, for example, could generate roughly 13–15 MW of electricity using gas-piston generation units, according to Euronews.

That would be enough to supply an industrial mining operation, with typical farms consuming around 5–20 MW and larger facilities requiring 50 MW or more.

Miners Could Avoid Grid Dependence

For mining companies, the model could provide access to dedicated power without relying entirely on Kazakhstan’s electricity grid.

Batyr Bauyrzhan, technical director of power solutions integrator WES LLP, said using associated gas could allow miners to secure power prices over longer periods instead of depending on fluctuating grid tariffs.

Mubarakov said miners are prepared to purchase and install generation equipment, while specialized engineering companies could handle gas processing, generation units, maintenance and required approvals.

Building a new power station from scratch, meanwhile, could cost around €1.7 million–€2.2 million per MW and take more than three years, according to Mubarakov.

Up to 60 Oil Fields Could Be Candidates

Kazakhstan's Ministry of Energy estimates that around 40–60 oil fields currently flare associated gas, creating a potential pool of sites for the model.

For oil companies, selling the gas could create an additional revenue stream while reducing the need to dispose of it through flaring. For miners, the gas could provide an alternative source of electricity outside the national grid.

Kazakhstan's National Bank said the country's 2026 digital-asset strategy places emphasis on autonomous generation using energy resources so that mining development does not create additional pressure on the wider power system.

Legal Framework Still in Development

Gizzat Baitursynov, Kazakhstan's vice minister of AI and digital development, said the government is working on rules to clarify how companies can participate in the arrangement.

The July presidential decree already established the policy direction, while separate rules for strategic digital mining were approved in July.

The initiative marks a different approach from Kazakhstan's 2021 crypto-mining boom, when rapid growth in electricity demand contributed to pressure on the country's power infrastructure and prompted tighter controls on mining-related electricity consumption.

Under the new model, Kazakhstan is looking to connect digital mining with an energy resource already being produced at oil fields—turning gas that might otherwise be flared into electricity for mining operations.