Chevron to fuel massive Microsoft data center in Texas with natural gas

Key Points:

• Chevron and Microsoft have entered a 20-year agreement for Chevron to supply natural gas to power Microsoft's massive Project Kilby data center in West Texas, expected to consume nearly 2.7 gigawatts of electricity.
• The majority of the power will come from large gas turbines provided by Chevron's partner GE Vernova, with additional turbines from Caterpillar, all located onsite at the data center.
• Project Kilby, located in Reeves County, has not yet begun construction, with Chevron planning a final investment decision later this year and power delivery expected to start in 2028.
• Microsoft's partnership with Chevron aligns with its significant data center expansion to support AI applications, backed by a $190 billion capital expenditure plan for 2026, a 61% increase from 2025.
• While Microsoft has invested heavily in renewable and nuclear energy to offset emissions, this deal indicates its willingness to incorporate natural gas from the fossil fuel industry to meet its growing electricity demands.