Chevron signs power supply deal with Microsoft for Texas data center
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Wiring sits inside of the Data Hall of the Microsoft data center campus in Mount Pleasant, Wisconsin, U.S., September 18, 2025. REUTERS/Audrey Richardson
June 22 (Reuters) - Chevron said on Monday it has signed an agreement with Microsoft to develop a co-located facility that would provide natural-gas fired power to the technology giant's data center in West Texas.
Technology companies, including Microsoft, are rushing to secure electricity supply for their rapidly expanding data centers that would support AI services such as ChatGPT and Copilot.
Chevron said the co-located facility, known as project Kilby, would provide dedicated electricity to Microsoft's data center campus at Pecos, Texas, for 20 years.
The campus is expected to expand Microsoft's data center capacity by 2 gigawatts.
The multi-billion-dollar data center investment, spanning the next five to seven years, is expected to support over 6,000 construction jobs and hundreds of permanent operational roles, Microsoft said in a separate statement.
Project Kilby, is expected to is expected to provide first power by 2028 and will ramp up to 2.67 gigawatts over time.
The U.S. energy major had said last year it was partnering with investment firm Engine No. 1 and electric services company GE Vernova on the project.
Majority of the generation will come from GE Vernova's turbines, with additional capacity to be provided by Caterpillar subsidiary Solar Turbines.
Kilby is expected to be among the largest co-located natural gas power projects in the United States, Chevron said, adding that it would support the next phase of "American AI growth by leveraging America's natural gas advantage".
Chevron expects to announce a final investment decision for the project by the end of this year.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Leroy Leo)
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