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Chevron and Microsoft sign a 20-year power agreement to build a 2.67-gigawatt natural gas facility in West Texas, securing dedicated energy for a major data center as AI demand strains the grid.

Yahoo Finance AI8h ago3 min read

Key takeaway

Chevron and Microsoft have signed a 20-year power agreement to build Project Kilby, a 2.67-gigawatt natural gas facility in West Texas that will supply energy directly to a Microsoft data center. The co-located power plant is designed to meet the massive energy demands of AI computing while reducing strain on the regional grid that serves consumers.

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3 Key Points

  • What happened

    Chevron's subsidiary Energy Forge One LLC has signed a 20-year agreement with Microsoft to co-locate a power facility called Project Kilby next to Microsoft's data center in Reeves County, West Texas. The facility will generate about 2.67 gigawatts of capacity, primarily from natural gas turbines, and will be built in phases to allow incremental expansion.

  • Why it matters

    Large-scale AI data centers require enormous amounts of reliable power, and the regional grid is strained by this growing demand. By building dedicated power generation on-site and delivering it directly to the data center, this project aims to support Microsoft's computing needs while reducing the burden on consumers' power supply in the region.

  • What to watch

    Chevron projects the project will deliver more than $10 billion(約1.6兆円) in state and local tax revenue, support for almost 2,000 jobs, and broader economic growth in West Texas. The facility will use non-potable, brackish groundwater for operations rather than freshwater.

FAQ

When will Project Kilby start operating?
The body does not specify a start date or timeline, only that the facility will be built in phases to enable incremental expansion over time.
What are the main power sources for Project Kilby?
A majority of the generation will come from large GE Vernova turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar Inc.
How much freshwater will Project Kilby use?
Chevron stated that Kilby will use non-potable, brackish groundwater for power plant operations instead of freshwater.

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