Chevron, Microsoft Sign 20-Year Deal to Build 2.67GW Power Plant for AI Data Center by 2028

According to UAnalyze, Chevron and Microsoft signed a 20-year power purchase agreement on June 22 to develop Project Kilby, a 2.67GW natural gas power facility in West Texas dedicated exclusively to Microsoft's data center operations, with power generation expected to begin in 2028.

Unlike traditional data centers relying on regional power grids, Project Kilby adopts a co-located model where the power plant operates on-site to directly supply the facility. This approach reduces strain on local grids and accelerates electricity access. Chevron expects to complete its final investment decision by late 2026, targeting double-digit returns on investment. The company estimates the project will generate over $10 billion in state and local taxes for Texas and support approximately 2,000 jobs.