Chevron signs 20-year natural gas deal with Microsoft for AI data center

M&A · Partnership Impact 4
โดย CNBC·Read original
Summary · why it matters

Chevron signed a 20-year power purchase agreement with Microsoft to supply electricity from a natural gas plant to a data center the tech company plans to build in West Texas. The project, called Project Kilby, is designed to generate approximately 2.67 gigawatts at full build-out, with power expected to begin flowing in late 2028 and development extending through the 2030s. The on-site plant will operate independently from the regional grid, using GE Vernova and Solar Turbines units, and will draw on Chevron's Permian Basin natural gas production. Chevron expects mid-teen returns and a final investment decision by the end of 2026, while Engine No. 1 holds an option for half ownership. The project is estimated to cost roughly $7 billion and is expected to generate more than $10 billion in state and local tax revenue.

Impact on stocks 4

Energy Transition & Power Demand▲ · 2 stocks
GE Vernova LLC
GEV
▲ PositiveDemandrelevance

GE Vernova units selected for the project, driving demand for its power generation equipment.

Energy▲ · 1 stocks
Chevron Corp
CVX
▲ PositiveDemandrelevance

Chevron signs 20-year PPA to supply natural gas for Microsoft data center, securing long-term demand for its Permian production.

Artificial Intelligence▲ · 1 stocks
Microsoft Corporation
MSFT
▲ PositiveSupplyrelevance

Microsoft secures dedicated natural gas power for its AI data center, ensuring reliable energy supply for operations.

Theme Impact 6

Off-coverage companies 2

Solar Turbines IncorporatedPrivate▲ Positive
Demandrelevance

Solar Turbines units selected for the project, driving demand for its turbine products.

Engine No. 1 LLCPrivate▲ Positive
Capitalrelevance

Engine No. 1 holds option for half ownership in the project, representing a potential investment opportunity.

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