Chevron has signed a long-term power supply agreement with Microsoft to support a major Texas data centre project, highlighting rising energy demand from AI-driven infrastructure.
Chevron has signed an agreement with Microsoft to supply power to the tech giant’s planned data centre in West Texas, as demand for AI infrastructure continues to rise.
According to Reuters, the co-located facility, called Project Kilby, will provide natural gas-fired power to Microsoft’s data centre campus in Pecos, Texas, for 20 years.
The project is expected to significantly expand Microsoft’s data centre capacity by 2 gigawatts. Reuters reported that the multi-billion-dollar investment, to be developed over the next five to seven years, is expected to create more than 6,000 construction jobs and hundreds of permanent operational roles.
Project Kilby is expected to deliver first power by 2028 and gradually ramp up to 2.67 gigawatts over time.
Chevron said the project will be developed with investment firm Engine No. 1 and power solutions provider GE Vernova. Most of the power generation will come from GE Vernova turbines, with additional capacity from Caterpillar subsidiary Solar Turbines.
“Kilby is expected to be among the largest co-located natural gas power projects in the United States,” Chevron said.
The deal reflects how major technology companies are increasingly securing dedicated energy supply as AI services drive rapid growth in data centre power consumption.
