Overview of the Chevron-Microsoft Kilby Project

Chevron has entered into a long-term agreement with Microsoft to develop a major gas-fired power plant in West Texas, specifically designed to power Microsoft's data centre. The project, named Kilby, is expected to deliver approximately 2.67 gigawatts of capacity under a 20-year power agreement, making it one of the largest combined natural gas power and data centre developments in the United States.

Strategic Importance and Rationale

Chevron's President of New Energies, Jeff Gustavson, emphasized that AI is reshaping the global economy and requires abundant, affordable, and reliable energy. Chevron aims to leverage its Permian natural gas resources and proven execution capabilities to deliver power with certainty, speed, and competitive cost. Texas is becoming a hub for energy-intensive AI infrastructure due to its proximity to low-cost gas production in the Permian basin.

Project Timeline and Benefits

Chevron expects to make a final investment decision by the end of 2025, with first power generation targeted for 2028. Locating power generation next to the data centre will provide reliable electricity while limiting strain on the regional grid. Additionally, this project allows Chevron to diversify its cash flow away from its core oil and gas business, supporting resilient shareholder returns.