Chevron, Microsoft Advance 2.67-GW Gas Power Hub for West Texas Data Center

Chevron Corp. subsidiary Energy Forge One LLC has signed a 20-year power purchase agreement with Microsoft Corp. to develop a co-located power facility in West Texas that will supply dedicated electricity to a Microsoft-operated data center, according to Chevron. The development, known as Project Kilby, is being advanced by Chevron in collaboration with Engine No. 1 and is expected to deliver approximately 2.67 GW of capacity.

For turbomachinery and rotating equipment suppliers, operators, and service providers, Kilby signals another major step in the convergence of gas-fired generation, modular plant execution, and hyperscale data center demand. Chevron said the project will use a phased, modular buildout that enables incremental expansion over time, with a majority of generation coming from large GE Vernova turbines and associated electrical infrastructure. Additional capacity will be supplied by Solar Turbines.

Why does Project Kilby matter for turbomachinery?

Kilby’s planned 2.67-GW scale places it among the largest co-located natural gas power and data-center developments in the United States, Chevron said. The project’s configuration—large gas turbines supplemented by additional turbine capacity—points to rising demand for high-availability rotating equipment packages capable of supporting AI and cloud workloads.

Data centers increasingly require power systems with fast deployment, high reliability, and predictable long-term operating profiles. Chevron said the agreement is intended to provide Microsoft with dedicated, large-scale power to support advanced compute reliability while reducing impacts on the regional grid. For gas turbine OEMs and aftermarket providers, this type of arrangement could create long-duration opportunities across balance-of-plant integration, controls, emissions systems, fuel handling, condition monitoring, outages, and lifecycle services.

How will the co-located power model work?

Rather than relying solely on regional grid supply, Kilby is designed to co-locate new large-scale power generation with the data center. Chevron said the facility will deliver reliable, dispatchable electricity directly to Microsoft, while aiming to mitigate impacts on the regional grid used by consumers.

That architecture has direct implications for plant design. A co-located power island serving a mission-critical digital load must prioritize availability; redundancy; black-start or ride-through strategies where applicable; maintenance scheduling discipline; and tight coordination between generation assets and data-center load profiles. Although Chevron did not disclose detailed plant configuration, the use of large GE Vernova turbines alongside Solar Turbines equipment suggests a multi-unit approach that may support phased commissioning and operational flexibility.

What environmental and infrastructure systems are planned?

Chevron said Kilby plans to use non-potable, brackish groundwater sources for power plant operations instead of freshwater. The company is also working to advance solutions for reuse of produced water from oil and gas operations. For plant engineers, water sourcing and treatment strategy will be a key balance-of-plant consideration, particularly in West Texas, where water management is often central to project execution.

The plant design will also incorporate advanced air emissions control technologies, including selective catalytic reduction systems intended to reduce NOx emissions, as well as measures to minimize noise and light impacts on surrounding communities. These requirements will affect equipment layout, exhaust systems, catalyst management, acoustic treatment, and maintenance planning.

Chevron said the agreement is an important milestone toward a final investment decision expected by the end of 2026, subject to completion of other conditions. First power delivery is anticipated in 2028, and the project is targeting mid-teen returns.

Chevron also said Kilby is expected to generate diversified cash flow independent of oil and gas price cycles, while supporting regional economic activity through more than $10 billion in state and local tax revenue and nearly 2,000 jobs. The company’s broader portfolio spans crude oil and natural gas production, fuels, lubricants, petrochemicals, additives, and energy technologies.

For the turbomachinery sector, Kilby reinforces a fast-developing market: dedicated gas-fired power for AI infrastructure. If executed as described, the project could become a benchmark for modular, co-located generation serving high-density compute loads.

Reference
Chevron: “Chevron signs 20-year power agreement with Microsoft for West Texas data center”. June 22, 2026.