Chevron and Microsoft Partner on 2.67-Gigawatt West Texas Data Center Powered by Natural Gas

Chevron has signed a 20-year agreement with Microsoft to supply natural-gas fired power for a proposed massive data center in West Texas called Project Kilby. Bloomberg reported that the facility is expected to begin operations by 2028 and scale up to 2.67 gigawatts, enough to power over 530,000 Texas homes. Chevron is collaborating with investment fund Engine No. 1 on the development, with a final investment decision expected later this year.

According to Hacker News, Chevron Corporation, through its subsidiary Energy Forge One LLC, signed the 20-year power purchase agreement to develop a co-located power facility. The project will use a phased, modular approach to provide dedicated electricity to a Microsoft-operated data center.

"The project, called Project Kilby, is a collaboration with Engine No. 1 and is expected to deliver approximately 2.67 gigawatts of capacity using a phased, modular approach to provide dedicated electricity to a Microsoft-operated data center."

This deal highlights the growing energy demands of the tech industry as data centers expand to support cloud computing and artificial intelligence workloads. Bloomberg noted that the 2.67-gigawatt capacity would be sufficient to power over 530,000 Texas homes, underscoring the scale of the infrastructure required.

The partnership between an oil major and a tech giant reflects a broader trend of energy companies seeking long-term contracts with data center operators. Hacker News emphasized the collaborative nature of the project, with Chevron working alongside Engine No. 1, an investment fund known for its focus on energy transition and industrial innovation.

As the final investment decision approaches later this year, Project Kilby represents a significant step in meeting the power needs of large-scale computing while leveraging existing natural gas resources. Bloomberg reported that the facility is slated to begin operations by 2028, marking a multi-year timeline for the development.