Chevron Secures Long-Term Revenue with Microsoft Data Center Deal
Chevron has made significant strides in its business by signing a 20-year power purchase agreement (PPA) to provide electricity for Microsoft's artificial intelligence-focused data center in Texas.
The deal is part of Project Kilby, which involves Chevron and its subsidiary Energy Forge One, Engine No. 1, and Microsoft working together to develop approximately 2.67 gigawatts of on-site power.
Most of the power will come from GE Vernova's gas-powered turbines, while additional capacity will be provided by Solar Turbines, a wholly owned subsidiary of Caterpillar.
Chevron plays a crucial role as a co-investor and developer through Energy Forge One, as well as a fuel provider. The company will supply natural gas from its Permian Basin production field directly to the power plant, while Energy Forge One will manage the long-term operations, including maintenance and water management systems.
The 20-year PPA take-or-pay contract provides Chevron with stable revenue over the life of the contract, eliminating upstream gas price volatility. This move into AI data centers also offers Chevron a targeted, high-margin commercial expansion.