Russia faces gas surplus as European exports collapse, eyes data centres

By Oksana Kobzeva

ST PETERSBURG, Russia (Reuters) -Russia, which holds the world's largest natural gas reserves, is exploring ways to manage a surplus of gas, including using it for data centres, as exports to Europe continue to plummet, government officials and company managers have said.

State-owned Gazprom saw gas exports to Europe peak at between 175 billion cubic metres (bcm) and 180 bcm in 2018-2019, only to fall to just 32 bcm in 2024, according to Reuters calculations, due to the conflict in Ukraine. 

That level is set to halve again this year following the stoppage of Russian gas transit via Ukraine.  

Russia's northern regions are having to contend with a glut of natural gas, Alexei Chekunkov, minister for the development of the Far East and the Arctic, said at the St. Petersburg International Economic Forum.

"Previously, half a billion cubic meters per day went through the gas pipelines to the West, but now it does not, and the question of what to do with this gas is very urgent," said Chekunkov. 

Chekunkov added that large investors were increasingly focusing on the gas chemical sector, and surplus gas could also be used to generate power for data centres deploying artificial intelligence technologies, as demand for energy to power such facilities has surged globally.

Gazprom produced 416.19 bcm of gas last year after an all-time low of 355.23 bcm the previous year. At the same time, it could only sell both domestically and internationally 361.7 bcm in 2024. 

The company also uses gas for its own needs, including for power generation at its gas fields and pipelines.

Russia's largest data centre operator, BitRiver, has said that up to 10 bcm of associated petroleum gas could be consumed annually for large-scale cryptocurrency mining, the Interfax news agency reported.

Pavel Sorokin, Russia's deputy energy minister, told the forum that natural gas production is too expensive for the data centres usage. He believes that the gas could be used for coal production, which faces a number of challenges, including international sanctions over the Ukraine conflict.

"We are in a pretty tough situation with coal now. Why should we use expensive gas to create additional data capacity when we can build power plants at a (coal) mine," he said.

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(Reporting by Oksana Kobzeva; Writing by Vladimir Soldatkin;Editing by Louise Heavens)