Microsoft and Chevron to Build 2.67 GW Power Plant for West Texas AI Data Center

Microsoft and Chevron have signed a 20‑year power purchase agreement to develop a 2.67‑gigawatt natural‑gas power facility in Reeves County, West Texas, to supply electricity directly to a Microsoft‑operated AI and cloud data centre. The project, called Project Kilby, will be built by Chevron’s subsidiary Energy Forge One and will use large turbines from GE Vernova and additional equipment from Solar Turbines, a Caterpillar subsidiary. Development will proceed in phased, modular stages, with a final investment decision expected by the end of 2026 and first power delivery anticipated in 2028.

Chevron estimates the plant could create more than 6,000 construction jobs at peak and hundreds of permanent positions, generate roughly $10 billion in state and local tax revenue, and support nearly 2,000 regional jobs. Environmental impact estimates suggest the facility could emit over 13 million tonnes of CO₂ and substantial quantities of regulated and hazardous pollutants, though Chevron says the design will include advanced emissions controls, selective catalytic reduction for NOx, and will use non‑potable brackish water to reduce freshwater consumption.

Jeff Gustavson, Chevron’s president of New Energies, said the project links the company’s traditional strengths to emerging AI demand, while Microsoft’s Noelle Walsh highlighted the need for reliable, large‑scale power to support advanced compute workloads.