Chevron to fuel massive Microsoft data center in Texas using natural gas
Chevron announced a 20-year agreement to fuel a massive Microsoft data center, dubbed Project Kilby, in Reeves County, West Texas, with natural gas. The data center is projected to consume 2.7 gigawatts of electricity, primarily from GE Vernova and Caterpillar turbines. This partnership signifies Microsoft's strategy to use fossil fuels to meet the substantial power demands of its growing AI infrastructure.
Chevron announced a 20-year agreement to supply natural gas to a new Microsoft data center, known as Project Kilby, in Reeves County, West Texas. The facility, which has not yet begun construction, is expected to become operational in 2028 and will require approximately 2.7 gigawatts of electricity, enough to power around 2 million homes.
The majority of the electricity will be generated by large gas turbines provided by Chevron's partner, GE Vernova, with additional turbines from Caterpillar, all located on-site. Chevron's president of new energies, Jeff Gustavson, stated that the company is well-positioned to deliver natural gas from the Permian Basin to data centers competitively.
This partnership underscores Microsoft's willingness to invest in fossil fuels to meet the escalating power demands of its artificial intelligence applications, despite its previous focus on renewable energy. Noelle Walsh, Microsoft's president of cloud operations and innovation, emphasized the need for energy infrastructure that can scale quickly and reliably to support AI's rapid growth. Microsoft is projected to spend $190 billion in capital expenditures this year, a significant increase from 2025, to build out its data center capacity.