Chevron and Microsoft Announce Project Kilby Power Agreement for West Texas Data Center

Project Kilby: A Dedicated Power Solution for AI Infrastructure

Chevron and Microsoft have entered into a 20-year power purchase agreement (PPA) to develop a co-located power facility in West Texas known as Project Kilby. The project aims to provide dedicated, large-scale electricity to a Microsoft-operated data center, bypassing regional grid constraints to support the rapid scaling of AI and cloud compute capabilities.

Technical Specifications and Capacity

Project Kilby is designed to deliver approximately 2.67 gigawatts (GW) of capacity. The facility will be built using a phased, modular approach to allow for incremental expansion. The primary generation source will be large GE Vernova turbines, supplemented by capacity from Solar Turbines (a Caterpillar Inc. subsidiary).

Key infrastructure details include:

• Generation Source: Natural gas turbines (GE Vernova and Solar Turbines).
• Total Capacity: ~2.67 GW.
• Deployment Strategy: Phased, modular construction.
• Location: West Texas, leveraging Permian Basin natural gas resources.

Strategic Rationale for Co-location

By co-locating the power generation facility directly with the data center, the partnership aims to achieve two primary goals: reliability and grid stability. Dedicated power ensures that Microsoft's advanced compute workloads have a reliable, dispatchable source of electricity that is not subject to the volatility or limitations of the public utility grid. Simultaneously, this approach is intended to mitigate the impact on the regional electrical grid that residential and commercial consumers rely on.

Environmental and Resource Management

To minimize the environmental footprint of the project, Chevron is implementing several resource management strategies:

• Water Usage: The plant will utilize non-potable, brackish groundwater instead of freshwater. Chevron is also exploring the reuse of produced water from oil and gas operations.

• Emissions Control: The facility will incorporate Selective Catalytic Reduction (SCR) systems to reduce NOx emissions, alongside measures to reduce noise and light pollution for surrounding communities.

Economic Impact and Timeline

Chevron expects the project to generate significant regional economic benefits, including an estimated $10 billion in state and local tax revenue and the support of nearly 2,000 jobs.

Project Timeline:

• Final Investment Decision (FID): Expected by the end of 2026.
• First Power Delivery: Anticipated in 2028.