Chevron signs 20-year power agreement with Microsoft for West Texas data center

Chevron and Microsoft have signed a 20-year power purchase agreement for Project Kilby, a 2.67 GW co-located natural gas power facility in West Texas designed to provide dedicated electricity to Microsoft's data center, with first power delivery expected in 2028. This strategic partnership directly addresses the critical infrastructure bottleneck limiting AI and cloud expansion, positioning both companies to capitalize on surging demand for reliable, large-scale computing power while generating mid-teen returns and $10+ billion in regional economic benefits. For IT organizations, this signals a fundamental shift in how hyperscalers will secure power infrastructure—moving from grid-dependent to dedicated, co-located generation partnerships—which has implications for data center strategy, regional expansion planning, and energy cost predictability.