Chevron Powers Microsoft's AI Data Center with 20-Year Deal

Chevron has entered into a significant long-term agreement to supply electricity for Microsoft's new data center in Texas. The company will provide power under a 20-year take-or-pay power purchase agreement (PPA) with Microsoft, as part of Project Kilby.

The project involves collaboration between Chevron, Microsoft, and Engine No. 1 to generate approximately 2.67 gigawatts (GW) of power. The primary source of energy will be advanced natural gas-powered turbines developed by GE Vernova, while additional capacity will come from Solar Turbines, a subsidiary of Caterpillar.

Chevron's involvement as both co-investor and fuel provider is crucial to the project. The company will source natural gas directly from its Permian Basin fields, redirecting associated natural gas that would otherwise be flared off during oil extraction into productive use for energy generation.