Chevron just made a massive bet that the AI boom’s biggest bottleneck isn’t chips. It’s electricity.
The energy giant announced a 20-year power purchase agreement with Microsoft to develop a dedicated natural gas-fired power facility in Reeves County, West Texas. The project, called Project Kilby, targets approximately 2.67 GW of capacity, enough to power roughly 2 million homes at full build-out. First power delivery is expected in late 2028, with phased development continuing into the 2030s.
What Chevron is actually building
Project Kilby will sit on over 2,000 acres in West Texas, drawing on Chevron’s low-cost natural gas supply from the Permian Basin. The facility will use turbines from GE Vernova and Solar Turbines, a subsidiary of Caterpillar, to generate electricity that flows directly to a Microsoft-operated data center campus on the same site.
The entire setup operates behind the meter, meaning the power generation exists solely to feed Microsoft’s data centers without touching the public electrical infrastructure. By co-locating the power source with the data center, both companies skip the lengthy queue for grid connection approvals and transmission upgrades.
