Invest1 publisher3 min readPublished
Kazakhstan's flared-gas decree fits bitcoin miners better than AI builders
Kazakhstan's July decree lets oil producers supply flared-gas power to crypto miners, as Crusoe did before assembling 10 gigawatts of AI projects. Crusoe sold those flare operations to NYDIG, so AI demand in Kazakhstan more likely lands on new grid capacity.
The Investor · Invest desk
What happened
- In July, President Kassym-Jomart Tokayev signed a decree letting Kazakh oil producers burn otherwise-flared gas for off-grid electricity used in crypto mining, Interfax-Kazakhstan reported.
- The decree came from the Ministry of Artificial Intelligence and Digital Development, with input from the central bank and the Astana International Financial Centre, and proposed stablecoin settlement for cross-border trade.
- Crusoe, which pioneered flare-gas bitcoin mining in US shale fields, sold its mining and flare-mitigation operations to NYDIG in 2025 as it moved fully into AI infrastructure.
- Kazakhstan ranked among the top three countries by bitcoin mining hash rate after China's 2021 ban, according to Cambridge Centre for Alternative Finance data.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- constraint Because the state can reclaim the gas for its own purposes, producers can offer only interruptible supply, and a miner willing to switch off is the easiest buyer to sign.
- precedent If Kazakh operators follow Crusoe, their flare sites are more likely to end up with a bitcoin owner, as Crusoe's did with NYDIG, than to host AI clusters.
- cost The proposed personal income tax exemption on regulated crypto income is revenue the state would give up to attract the capital its minister is courting.
- exposure Putting data centers in the same 70% category as miners adds a second large buyer to a grid that has already strained under miners alone.
The condition attached to this power decides who buys it. Producers may redirect the gas only when it is not needed for state purposes [2], so the buyer at the wellhead is taking electricity the government can take back. Flaring exists to get rid of gas in places pipelines often cannot reach [16]. Crusoe's chief executive, Chase Lochmiller, explained what first drew his company to that gas. "Bitcoin mining is the best buyer of last resort," he said [9].
The Crusoe precedent is narrower than the comparison suggests. The company built mobile data center sites across the North Dakota and Montana shale fields and worked with producers including Equinor, Devon Energy and Kraken Oil & Gas [5]. "What started with capturing waste methane in the oilfield to power Bitcoin mining has evolved into finding new and creative ways to power AI data centers," its founders wrote in 2025 [8]. That evolution included the NYDIG sale [6]. The AI business Crusoe kept has a pipeline of more than 10 gigawatts of data center projects [7].
The opening for AI in Kazakhstan is in a different rule. Under the country's 70/30 model, data centers and miners, counted as one category of buyer, may take up to 70% of new power capacity created by infrastructure upgrades [10]. At least 30% stays with other users [1]. That capacity comes from upgrading the grid, which is a separate supply from gas at the wellhead. The report does not give a volume of flared gas or a megawatt figure for what producers could generate.
The demand the report cites is crypto demand. It puts the regulated crypto market's growth at more than 30-fold in three years, to over $10 billion [12]. Taken at those floors, the market started near $333 million [2]. Binance has picked the country for a regional settlement hub [13], and the decree proposes exempting regulated crypto income from personal income tax [17]. "Our goal is to make Kazakhstan a point of attraction for global capital and expertise while ensuring maximum transparency and protection for every participant in this market," Zhaslan Madiyev, who heads the ministry, said [4].
This can go a few ways. In the first, producers sign miners at the wellhead while AI builders compete with those same miners for the 70% on the upgraded grid [10]. In the second, a local operator follows Crusoe's sequence: it learns on flare gas, then sells the wellhead units to a bitcoin company [6]. In the third, the state reclaims the gas for its own purposes often enough that no buyer of either kind commits [2].
I think the first is the likeliest. The decree builds a bitcoin mining business at the wellhead, and AI compute, if it comes, arrives on the grid. Cryptopolitan answers the AI question with "a qualified yes" [15], citing a decree steered by a ministry named for artificial intelligence [3] and a rule that bundles data centers with miners [10]. The same report notes that nothing in the decree names AI training as the goal, and that Kazakhstan's grid has strained under miners before [14]. I would be wrong if the first contracts under the decree put a data center operator at a flare site.
What to watch
- Any published volume of redirectable flared gas, or megawatts of off-grid capacity, from Kazakh oil producers.
- How Kazakhstan divides the 70% of upgraded capacity between data centers and digital miners.
- Whether the personal income tax exemption for regulated crypto income moves from proposal into law.