Overview
- The agreement, announced Monday, June 22, 2026, commits Chevron to build a co-located natural-gas power plant and sell electricity to Microsoft under a 20-year power purchase agreement.
- Project Kilby is planned to ramp to about 2.67 gigawatts of on-site capacity, use GE Vernova and Caterpillar Solar Turbines equipment, and target first power delivery in 2028 with a final investment decision expected by the end of 2026.
- Microsoft and Chevron say the on-site plant will provide always-on, dispatchable power to the new multi-gigawatt data center campus in Reeves County to avoid long grid-connection delays that have slowed other data center builds.
- Environmental groups and independent analysts caution the plant could produce more than 13 million tons of CO2 a year, and Chevron proposes using brackish groundwater and treated oilfield produced water to reduce freshwater demand.
- Chevron projects more than $10 billion in state and local tax revenue and nearly 2,000 jobs, and local officials back the investment even as state regulators weigh how data center infrastructure costs affect residential ratepayers.