Cryptomining firm Cannan has launched a Bitcoin mining data center powered through natural gas flaring in Calgary, Canada.

The pilot project is being undertaken in partnership with Calgary-based natural gas firm Aurora AZ Energy and will see the companies build a 2.5MW data center that is expected to house 700 Avalon A15Pro miners.

According to the partners, the data center will aim to achieve 90 percent uptime when utilizing the excess natural gas. Canaan has said that it hopes to use the excess energy for additional tasks, including switching between Bitcoin mining and AI computation. In addition, the company plans to sell excess power back to the grid during periods of curtailment to provide an alternative revenue stream for the data center.

"This initiative represents a major step in demonstrating how computing infrastructure can evolve alongside energy innovation," said Nangeng Zhang, chairman and CEO of Canaan. "High-density computing – whether for Bitcoin mining, AI inference, or HPC workloads – requires scalable and energy-efficient power architectures. By integrating localized natural gas generation with our modular computing systems, we are transforming previously wasted resources into productive energy with the potential to power the next generation of distributed AI infrastructure."

The company claims that, through the solution, it will be able to reduce CO2 emissions by 12,000 to 14,000 tons annually.

"This initiative to convert wellhead power into computing power is made possible by combining our capabilities in energy infrastructure with Canaan's expertise in high-density computing," said Jing Shan Zhou, CEO of Aurora AZ Energy. "Together, we're building a scalable framework to convert flared or stranded natural gas into productive power at the source, delivering reliable, low-cost energy while contributing to global sustainability goals."

Canaan is a Singapore-based cryptocurrency mining company. Established in 2013, it was founded by Chinese national Nangeng Zhang.

The company is not the first to explore the potential of gas flaring to power its operations. One of the most notable companies to explore the solution is MARA, which, in April, fully energized a 25MW modular cryptomine data center powered by flared natural gas in Texas and North Dakota.

Before this, in March, HNO International launched a new division, EcoFlare Power, to harness flared natural gas to power high-performance computing (HPC) data centers and Bitcoin mining operations.

In November last year, Hilcorp announced a pilot project to test the feasibility of using natural gas from Alaska’s North Slope oil and gas fields to power a Bitcoin mining operation.

Companies involved in using flared gas to power servers claim the process benefits the environment because otherwise wasted energy is used, and the gas is burned more efficiently, releasing less unburnt methane. However, it helps increase the revenues of gas projects, helping fund more fossil fuel development.

The practice has grown in popularity within the crypto and data center space over recent years, buoyed by new legislation such as the Flare Act, passed in March, which incentivizes entrepreneurs and crypto miners to use natural gas that would otherwise be stranded.