Project Kilby: power for Microsoft data center
Chevron signed a 20-year power purchase agreement with Microsoft on 22 June 2026. A final investment decision is expected by the end of 2026, with first power targeted for 2028.
What it is
A co-located gas-fired power plant in West Texas, built with Engine No. 1, that will supply a Microsoft-operated data center. Chevron's subsidiary Energy Forge One signed the deal. The plant will be built in phases to about 2.67 GW, with Permian gas as fuel and brackish groundwater for cooling, and is targeting mid-teen returns.
Why it matters to the stock. A 20-year power contract with a hyperscaler is a new revenue stream tied to data-center demand rather than the oil price. Its FID and first-power timing are the key checkpoints.
News
Chevron signs 20-year power deal with Microsoft for 2.67 GW West Texas plant
Chevron's subsidiary Energy Forge One signed a 20-year power purchase agreement with Microsoft on 22 June 2026 for Project Kilby, a co-located gas-fired plant in West Texas that will supply a Microsoft-operated data center.