Oil major Chevron Corp. (CVX) announced on Monday that its unit, Energy Forge One LLC signed a deal with Microsoft Corp. (MSFT) to build a 2.67 gigawatt natural gas power plant in West Texas to supply a Microsoft-operated data center under a 20-year agreement.
The project, known as Kilby, will co-locate power generation with the data center and is expected to deliver first power in 2028. A final investment decision is expected by the end of 2026.
Most of the electricity will come from large GE Vernova (GEV) turbines, with additional capacity from Solar Turbines, a Caterpillar Inc. (CAT) subsidiary.
The project targets mid-teen returns and aims to generate cash flow independent of oil and gas price cycles.
Kilby is expected to create about 2,000 jobs and generate more than $10 billion in state and local tax revenue. The plant will use non-potable, brackish groundwater instead of freshwater and will include emissions control technology.
The facility is designed to deliver electricity directly to Microsoft, while reducing strain on the regional grid.
Chevron and Engine No. 1 have been collaborating on Kilby's development.
In pre-market activity on the NYSE, shares of Chevron were up 1.19 percent, changing hands at $175.64, after closing Thursday's regular session 2.22 percent lower.
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June 19, 2026 16:46 ET Major central banks continued to dominate the economic news flow this week too, led by the Federal Reserve, as they announced their latest policy decisions. The Federal Reserve policy session was in focus as it was the first to be led by the new chief Kevin Warsh. In Europe, central banks of the U.K. and Switzerland announced their rate decisions. In Asia, the Bank of Japan drew attention for its policy moves, while data out of China threw some light on the state of the economy.