Chevron Enters Long-Term Power Purchase Agreement with Microsoft for AI Data Center
Chevron has signed a significant 20-year power purchase agreement (PPPA) to supply energy for one of Microsoft's artificial intelligence-focused data centers in Texas. The deal, part of Project Kilby involving Chevron’s subsidiary Energy Forge One and Engine No. 1, aims to develop approximately 2.67 gigawatts of on-site natural gas-powered electricity by 2028. The agreement provides Chevron with a stable revenue stream insulated from volatile oil prices while allowing Microsoft to secure long-term energy for its expanding data center infrastructure. The project uses GE Vernova and Caterpillar’s Solar Turbines technology, enabling scalable power generation over time. By utilizing associated natural gas—a byproduct of crude drilling—Chevron can avoid flaring excess production. This move positions Chevron in the growing AI-driven demand for reliable energy sources, offering a high-margin commercial expansion opportunity. The deal highlights how hyperscalers are prioritizing long-term baseload power solutions and could lead to similar partnerships for Chevron.
Topics: Data Centers Energy Microsoft Partnership Natural Gas