The oil and gas giant announced on Monday that it has signed a 20-year cooperation agreement with Microsoft to provide natural gas power generation and power services for Microsoft's large data center in West Texas. The data center project, codenamed Project Kilby, is expected to have a total electricity load of nearly 2.7 gigawatts, equivalent to the power consumption of approximately 2 million homes.
Most of the project's power will be generated by large gas turbine units provided by Chevron's partner General Electric Wilnova. Caterpillar will also supply the gas turbines. The entire power generation infrastructure will be built directly in the data center park.
Currently, construction has not yet begun on the Kilby project in Reeves County. Chevron plans to make a final investment decision on the project later this year, and the data center is expected to be officially powered on and put into use in 2028.
Microsoft is currently expanding its data centers on a large scale to provide computing power support for various artificial intelligence applications. In this context, it has reached a sub-energy cooperation with Chevron. Microsoft plans to invest $190 billion in capital expenditures this year, a 61% increase from 2025.
Microsoft's choice to cooperate with oil and gas companies and rely on natural gas to ensure power supply reflects the company's willingness to use fossil energy to meet its huge electricity needs.
Noel Walsh, president of Microsoft's Cloud Operations and Innovation Division, said in a statement on Monday: The rapid development of the artificial intelligence industry "requires the support of a stable and reliable energy infrastructure that can rapidly expand capacity."
Jeff Gustafson, president of Chevron’s New Energy Division, said the company can stably and efficiently transport natural gas from the Permian Basin to the data center at a very competitive cost.
Previously, Microsoft mainly offset the carbon dioxide emissions generated by its data centers by investing in renewable energy. However, enterprises have been looking for power supplies that can stably meet the power needs of data centers around the clock. As early as 2024, Microsoft has entered the nuclear power field and invested in helping the Three Mile Island Nuclear Power Plant in Pennsylvania restart operations.