Chevron Data Centre Delayed as Texas Politics Intervene
A major data centre project in West Texas may face delays due to state politics. Chevron is building the Project Kilby gas-powered data centre near Pecos, which will supply a Microsoft facility under a long-term power deal.
The 2.67GW site is expected to begin producing power by 2028, with Chevron signing a 20-year contract with Microsoft in June. However, Governor Greg Abbott's order last month to halt new environmental permits for data centres could push the final investment decision from late this year to 2027.
According to Tim McDonnell of Semafor, the delay is due to permitting and regulatory issues, which are common across Texas AI projects. Chevron's vice president for power solutions, Daniel Droog, said Kilby is still on track to meet its 2028 deadline, despite early earthworks beginning while developers wait for permits.
State grid and water agencies must complete audits before new permits can be issued, with data centres becoming a major issue ahead of November's elections. Candidates from both parties have called for tighter water rules.