Kazakhstan is exploring a new way to put excess gas from oil fields to use by mining Bitcoin. The process would utilize natural gas at oil wells that would otherwise be burned as waste.

Euronews reported that under a new government initiative, oil companies can now sell excess gas from oil fields directly to Bitcoin miners. The miners would then use the gas to produce their own electricity at or near the oil fields instead of relying on Kazakhstan’s national power grid.

President Kassym-Jomart Tokayev signed a decree in July 2026 aimed at stimulating and developing Kazakhstan’s digital asset industry. The decree calls for a legal mechanism that would allow oil and gas companies to provide associated gas to digital miners for electricity generation.

The plan follows Kazakhstan’s experience with a major Bitcoin mining boom in 2021.
After China restricted digital asset mining that year, many miners moved to Kazakhstan because of its relatively cheap electricity. But the rapid growth put heavy pressure on the country’s aging power system and contributed to electricity shortages in some areas.

The government responded by limiting miners’ access to electricity and introducing an auction system under which mining companies could buy surplus power. In practice, there was often little surplus electricity available.

Those restrictions pushed many miners out of Kazakhstan. The new plan is designed to give miners another source of power without putting additional pressure on the national grid.

Oil production often produces associated petroleum gas. When an oil field is far from pipelines or other infrastructure, transporting the gas can be difficult or too expensive.

Instead, the gas is often burned in a process known as flaring. Kazakhstan now wants to put some of that gas to work.

Under the proposed system, Bitcoin miners would install equipment at or near oil fields to turn the gas into electricity. They could then use that electricity to run their mining machines.

Kazakhstan’s Ministry of Energy estimates that around 40 to 60 oil fields could have opportunities to use this model. Daniyar Mubarakov, head of Kazakhstan’s Blockchain and Digital Mining Association, estimates that the country flared around 300 million to 340 million cubic meters of associated gas in 2024.

If that gas were converted into electricity, it could produce around a whopping 1.2 to 1.3 terawatt-hours of power, according to Mubarakov.

That figure represents potential rather than an immediate increase in Kazakhstan’s available mining power. Projects would still need equipment, investment, permits and access to suitable oil fields.

Electricity is one of the biggest costs for Bitcoin miners. Mining machines run around the clock, so miners need a reliable and affordable power supply.

Using gas directly at an oil field could give miners more control over their electricity costs and reduce their dependence on the national grid.

“Access to cheap electricity is absolutely critical,” said Batyr Bauyrzhan, technical director of WES LLP, a company involved in gas processing, power generation and mining infrastructure.

Bauyrzhan said oil companies could also benefit because they could sell gas that previously had little value.

“For us, the gas that was previously flared has no alternative cost, so we are prepared to sell it at a price significantly lower than the market price of commercial-grade gas,” he said.

The oil companies could also reduce gas flaring and potentially avoid environmental penalties. For miners, meanwhile, the attraction is a potentially cheaper and more stable source of electricity that does not compete directly with households and other businesses for grid power.