Chevron, Microsoft enter exclusivity agreement for WT power hub

Chevron is advancing its plans to construct a natural gas-fired power complex for a co-located data center in West Texas. The multinational oil company announced an exclusivity agreement with Microsoft and Engine No. 1 to negotiate a proposed power generation and electricity offtake arrangement, though commercial terms have not been finalized. Chevron officials stated this approach reflects an emerging shift in how power for artificial intelligence is being developed, by bringing energy supply closer to demand through co-located, behind-the-meter generation. This aims to deliver reliability and avoid additional strain on regional electricity systems. Chevron previously announced plans for this power hub at its Investor Day, with an initial 2.5 gigawatts of gas-fired generation, expandable to 5 gigawatts. A final investment decision is expected early this year, with first power targeted for 2027. Analysts at East Daley Analytics noted the project supports Chevron's transition to directly selling electrons to hyperscale consumers and implies several hundred million cubic feet per day of steady in-basin gas demand.