Chevron’s Energy Forge One subsidiary signed a 20‑year power purchase agreement with Microsoft to build a located power plant for the tech giant’s West Texas data center. The project, dubbed Kilby, will deliver roughly 2.67 gigawatts of capacity through a modular, phased rollout. Most generation will come from GE Vernova gas turbines, with supplemental output from Caterpillar’s Solar Turbines, and will support Microsoft’s expanding AI workloads.

Both companies frame the tie‑up as essential to AI’s energy demand. Chevron president Jeff Gustavson highlighted the firm’s Permian natural‑gas advantage for “certain, speedy, competitive” power, while Microsoft’s cloud chief Noelle Walsh said dedicated supply lets the data center scale significantly without stressing the regional grid. The plant will use brackish water and advanced emissions controls to limit NOx.

Kilby targets its first power delivery in 2028, with a final investment decision slated for late 2026. Expected to generate mid‑teen returns and produce over $10 billion in state and local tax revenue, the project adds diversified cash flow that decouples from oil price cycles. It will also create roughly 2,000 jobs directly in the Permian region.