Chevron Corporation's wholly owned subsidiary Energy Forge One LLC has signed a 20-year power purchase agreement (PPA) with Microsoft to supply electricity to a data center in West Texas. The 2.67 GW natural gas facility, known as Project Kilby, was developed in collaboration with activist fund Engine No. 1 and ranks among the largest co-located natural gas power and data center developments in the United States.

Kilby is designed to deliver approximately 2.67 GW of capacity through a phased, modular approach enabling incremental expansion over time. Generation will come primarily from GE Vernova turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar. The infrastructure will be co-located directly with Microsoft's data center, delivering reliable, dispatchable electricity while minimizing impacts on the regional grid. Chevron plans to leverage Permian Basin natural gas, where the company already operates as a major producer.

The Final Investment Decision (FID) is expected by the end of 2026, subject to completion of necessary conditions, with first power delivery anticipated in 2028. The project targets mid-teen returns and is positioned by Chevron as a generator of diversified cash flows independent of oil and gas price cycles, aimed at reinforcing shareholder returns resilience.

The project is expected to generate more than $10 billion in state and local tax revenue and support almost 2,000 jobs in the region. The plant will use non-potable, brackish groundwater rather than freshwater for power operations. The design incorporates Selective Catalytic Reduction (SCR) systems to reduce nitrogen oxide (NOx) emissions, along with measures to minimize noise and light impacts on surrounding communities. Chevron is also advancing solutions for the reuse of produced water from its oil and gas operations.

The expansion of gas-fired power plants to meet new industrial demand is accelerating in Europe, where ENGIE Deutschland is advancing a hydrogen-ready gas power plant project in Saarland. Long-term hydrocarbon commitments remain active globally, as illustrated by the gas agreement signed between Shell and Trinidad and Tobago on the Loran gas field.