Overview
- Chevron agreed to develop Project Kilby, a co-located natural-gas power facility that will supply Microsoft’s Pecos, Texas data center under a 20-year contract and has not yet begun construction.
- Chevron and Microsoft expect the plant to deliver first power in 2028 and to ramp to roughly 2.67 gigawatts of capacity over time as the campus grows.
- Most generation will come from GE Vernova gas turbines with additional capacity from Caterpillar’s Solar Turbines, and partners include investment firm Engine No. 1.
- Microsoft’s Pecos buildout will add about 2 gigawatts of data center capacity, support over 6,000 construction jobs and hundreds of permanent roles, and fits inside the company’s large near-term capital plans.
- The deal reflects a shift toward on-site, dispatchable fossil-fuel capacity to meet fast-growing AI power needs and raises trade-offs with Microsoft’s prior focus on renewables and nuclear while regulators and local permitting will shape the project before a final investment decision later this year.