Permian natural gas is becoming an entrenched part of the AI power stack and one need look no further than the 20-year Chevron/Microsoft deal to see this.
The agreement covers Project Kilby, a co-located West Texas power facility designed to provide dedicated electricity to a Microsoft-operated data center. Chevron’s Energy Forge One signed the agreement with Microsoft, while Chevron and Engine No. 1 have been collaborating on the development.
Project Kilby is expected to deliver approximately 2.67 GW of capacity through a phased, modular buildout. A majority of the generation is expected to come from GE Vernova turbines and associated electrical infrastructure, with additional capacity from Solar Turbines. First power delivery is anticipated in 2028, subject to final investment decision and other conditions.
Data from Rextag fleshes out the story even more. The Project Kilby / Microsoft data center site near Pecos is shown alongside Chevron acreage, transmission natural gas pipelines, Chevron-owned processing plants, and operational power plants across the Permian region. That overlap helps explain why the project is best understood as a gas-to-power infrastructure development, not only a data center procurement deal.
Rather than treating the agreement as a standalone corporate power purchase agreement, the map frames Project Kilby as part of a broader Permian infrastructure pattern. Large AI loads require reliable, scalable power, and West Texas offers proximity to natural gas production, pipeline takeaway, processing infrastructure, and existing power generation assets.
The result is a new kind of Permian growth story. Chevron’s traditional upstream and midstream-adjacent strengths are being linked to dedicated electricity demand from AI and cloud infrastructure.
Why it matters
● Project Kilby connects Permian natural gas infrastructure with dedicated AI power demand.
● Chevron signed a 20-year power agreement with Microsoft for a West Texas data center.
● The project is expected to deliver approximately 2.67 GW of capacity through a phased, modular buildout.
● First power is anticipated in 2028, subject to final investment decision and other conditions.
● The map shows how the Pecos-area site sits near Chevron acreage, natural gas pipelines, Chevron-owned processing plants, and operational power plants.
What the map shows
A Permian infrastructure view of Project Kilby and its gas-to-power context.
● Project Kilby / Microsoft data center site near Pecos, Texas
● Chevron acreage
● Transmission natural gas pipelines
● Chevron-owned processing plants
● Operational power plants
● Permian Basin regional context
A deeper dive with Energy DataLink
Using Rextag Energy DataLink, users can:
● map natural gas pipelines around large-load power projects
● compare upstream acreage with nearby processing and power infrastructure
● review processing plant locations around Permian gas development
● evaluate how data center and power projects align with regional natural gas infrastructure
build cross-sector infrastructure views for upstream, midstream, power, data centers, and investment analysis
