Chevron and Microsoft Partner for Major Gas-Fired Power Plant in Texas

US supermajor Chevron has signed a long-term agreement with Microsoft to develop a large-scale natural gas-fired power plant in West Texas, designed to supply electricity to Microsoft's data centre. The project, named Kilby, is expected to deliver approximately 2.67 gigawatts of capacity under a 20-year power agreement, making it one of the largest combined natural gas power and data centre developments in the United States.

Chevron's President of New Energies, Jeff Gustavson, emphasized that AI is reshaping the global economy and requires abundant, affordable, and reliable energy. He stated that Chevron is uniquely positioned to deliver power with certainty, speed, and competitive cost by leveraging Permian natural gas and its proven execution capabilities. Texas is becoming a hub for energy-intensive AI infrastructure projects due to its proximity to low-cost gas production in the Permian basin.

Chevron expects to make a final investment decision on the project by the end of this year, with first power generation targeted for 2028. Locating power generation next to the data centre will provide reliable electricity while limiting strain on the regional grid. Additionally, this initiative allows Chevron to diversify its cash flow away from its core oil and gas business, supporting resilient shareholder returns.