Chevron, a Houston-based oil and gas company, said it signed a 20-year agreement with Microsoft to supply gas-fired power for a proposed data center campus near Pecos in West Texas.

The project, called Project Kilby, is expected to start generating power by 2028 and reach 2.67 gigawatts over time.

Chevron is developing it with Engine No. 1, a US investment firm, and the partners plan to make a final investment decision later this year.

People familiar with the project estimated the cost at about US$7 billion in April, but Chevron has not disclosed a figure.

Chevron said the plant would use Permian Basin gas and generate electricity on site rather than draw power from the grid.

The deal also adds to scrutiny of Microsoft’s energy strategy.

The company has pledged to be carbon negative by 2030, but in May Microsoft was considering delaying or abandoning its goal to match 100% of its hourly electricity use with renewable energy purchases by 2030.

Chevron said the project would not involve a local utility, but permitting and regulatory requirements for new gas-fired generation could still affect the timeline.

🔗 Source: Bloomberg

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