Kazakhstan is moving to use associated petroleum gas to power cryptocurrency mining as it seeks to revive a mining industry that was hit by electricity restrictions. President Kassym-Jomart Tokayev signed a decree in July ordering the development of a mechanism that would allow companies to use associated gas for digital mining.
Daniyar Mubarakov, head of the Blockchain and Digital Mining Association, said the country’s total associated gas output could be converted into 1.2 to 1.3 terawatt-hours of electricity. He said that amount would be enough to support the construction of medium-sized or large data centers or Bitcoin mining farms at some oil fields.
Kazakhstan’s Energy Ministry estimates that as many as 60 oil fields in the country produce associated gas. Under the proposed model, oil companies could sell otherwise wasted gas to miners and cut disposal costs worth millions of dollars, while miners could secure multi-year power prices and reduce reliance on the national grid. The government is also drafting a legal framework to define operating rules for companies and regulate the market, according to officials.
Kazakhstan is moving to use associated petroleum gas to supply electricity for cryptocurrency mining, part of an effort to restore a mining sector that was affected by power restrictions.
President Kassym-Jomart Tokayev signed a decree in July calling for a mechanism that would allow companies to use associated gas for digital mining.
Daniyar Mubarakov, head of the Blockchain and Digital Mining Association, said Kazakhstan’s total associated gas volume could be converted into 1.2 to 1.3 terawatt-hours of electricity. He said that would be enough for some oil fields to build medium-sized or large data centers or Bitcoin mining farms.
Kazakhstan’s Energy Ministry estimates that up to 60 oil fields in the country generate associated gas. Under the model being discussed, oil companies could sell waste gas to miners and reduce disposal costs by millions of dollars, while miners could lock in power prices for years and cut their dependence on grid electricity.
The Kazakh government is drafting a legal framework to clarify operating rules for companies and regulate the market. Gizzat Baitursynov, vice minister of AI and digital development, said the mechanism would increase government tax revenue and improve the environment.
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