Cover image is Gemini generated as an illustration for the huge project
In a massive move bridging big tech and heavy energy, Chevron Corporation (via its subsidiary Energy Forge One LLC) has officially signed a monumental 20-year power purchase agreement with Microsoft Corporation. Dubbed Project Kilby, this multi-billion-dollar joint venture, developed in collaboration with investment firm Engine No. 1, will establish a massive, co-located natural gas power facility and data center hub near Pecos in Reeves County, West Texas.
Key Project Specifications
The development stands out as one of the largest co-located natural gas power and data center projects in the United States.
1. Massive Energy Capacity
- Target Output: The facility is engineered to deliver a staggering 2.67 gigawatts of capacity.
- Modular Infrastructure: The project will utilize a phased, modular build-out to allow for incremental scaling well into the 2030s.
- Hardware Providers: Primary generation will be driven by large GE Vernova turbines, with supplemental capacity supplied by Caterpillar Inc.’s Solar Turbines subsidiary.
A Gemini generated image as an illustration to show that the exclusive development stands out as one of the largest co-located natural gas power and data center projects in the United States.
2. Grid Independence & Reliability
By co-locating the massive power generation plant directly alongside Microsoft’s advanced compute data center, Kilby delivers dedicated, dispatchable electricity. This direct-line design is specifically intended to mitigate heavy power draws and reduce strain on the local public utility grid.
Strategic and Economic Impact
“AI is reshaping the global economy, and abundant, affordable, reliable energy is essential to fueling that transformation.”
— Jeff Gustavson, President of Chevron New Energies
The Financial Blueprint
- Total Investment: Up to $7 billion committed to infrastructure development.
- Projected Returns: Chevron is targeting mid-teen financial returns, securing a diversified cash flow stream completely independent of traditional oil and gas commodity price cycles.
- Local Economy: The project is projected to generate over $10 billion in state and local tax revenue while supporting nearly 2,000 jobs.
Environmental and Community Design
- Water Conservation: The facility will bypass freshwater entirely, opting instead for non-potable, brackish groundwater and advancing solutions to reuse produced water from regional oil and gas operations.
- Emissions & Disturbance Controls: The plant design integrates Selective Catalytic Reduction (SCR) systems to strictly minimize $NO_x$ emissions, alongside specialized technology to reduce noise and light pollution for neighboring communities.
Project Timeline and Milestones
The roadmap for Project Kilby establishes a rapid development track to meet immediate AI infrastructure demands:
| Milestone | Target Date |
| Agreement Executed | June 2026 |
| Final Investment Decision (FID) | Expected Late 2026 (Pending final permitting) |
| First Power Delivery | Targeted for Late 2028 |
| Full Build-Out Completion | Phased rollouts continuing into the 2030s |
Its important to know that engine No. 1 (collaborating through its energy company, Joulent) retains an option for a 50% equity stake and proportional capital expenditures moving forward.
