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Update: Chevron Signs 20-Year Deal With Microsoft to Power Data Center in West Texas

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(Updates with Chevron's statement in the headline and throughout.)

Chevron (CVX) said Monday its Energy Forge One subsidiary has signed a 20-year power purchase agreement with Microsoft (MSFT) for a planned Microsoft-operated data center in West Texas.

Under the agreement, Chevron and Engine No. 1 have been collaborating to develop a co-located natural gas facility known as Project Kilby, which is expected to deliver about 2.67 gigawatts of capacity in phases, primarily using GE Vernova (GEV) turbines and equipment from Caterpillar's (CAT) Solar Turbines unit, according to a statement.

Chevron said it targets a final investment decision by the end of 2026, with first power delivery expected in 2028 and the project anticipated to deliver mid-teen returns.

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