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Chevron struck a 20-year agreement with Microsoft to power what could become one of the country’s largest AI data centers in West Texas
The data center will get its energy from natural gas produced from the energy company Joulent’s fields in the area
“Leadership in the AI era will be determined by who can deliver energy and compute the fastest, most reliably, and at the lowest cost,” Chris James, the founder and CEO of Joulent, said in a news release
Chevron has struck a 20-year agreement with Microsoft to power a large AI data center in West Texas.
On Monday, June 22, the multinational energy corporation announced that it signed an agreement to develop and provide dedicated electricity to a massive Microsoft-operated data center known as Project Kilby, according to a news release.
“AI is reshaping the global economy, and abundant, affordable, reliable energy is essential to fueling that transportation,” Jeff Gustavson, Chevron’s president of new energies, said in the release. “Chevron is uniquely positioned to deliver power to customers with certainty, speed and at a competitive cost, leveraging Permian natural gas and our proven execution capabilities.”
A sign displays the prices of unleaded gasoline at a Chevron gas station
Credit: David Paul Morris/Bloomberg via Getty
According to the Wall Street Journal, the oil company will work with the energy company Joulent to build the 2.7-gigawatt campus on more than 2,000 acres of land in Reeves County.
The amount of electricity produced by Kilby’s on-site power plant is equivalent to the power needed to run approximately 2 million homes, according to CNBC.
The data center will get its energy from natural gas produced from Joulent’s fields in the area as part of its first big AI data-center project, according to a separate news release.
A majority of the generation will come from large GE Vernova gas turbines, which will then be supplemented by turbines made by a subsidiary of Caterpillar Inc.
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In addition to supporting digital infrastructure, Chevron said that the data center is expected to generate economic benefits for the region — including bringing in more than $10 billion in tax revenue and creating nearly 2,000 jobs.
While Microsoft has invested “primarily” in renewable energy for its data centers, CNBC reported, the company is now searching for alternatives — including nuclear power, and now natural gas — to meet the “24/7 demand” of the projects.
The Chevron announcement comes as Microsoft embarks on a buildout of data centers for artificial intelligence, according to CNBC, which reported that the company “plans $190 billion in capital expenditures this year,” marking a 61% increase from 2025.
The data center is expected to start receiving power in 2028.
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