Chevron Signs Power Purchase Agreement with Microsoft
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 22 2026
0mins
Chevron Corporation (CVX) announced that Energy Forge One, a wholly owned subsidiary, has signed an agreement with Microsoft Corp. (MSFT) to develop a co-located power facility in West Texas that will provide dedicated electricity to a Microsoft-operated data center under a 20-year power purchase agreement. Chevron and Engine No. 1 have been collaborating on the development, known as Project Kilby. Kilby is expected to deliver approximately 2.67 gigawatts of capacity, built through a phased, modular approach that enables incremental expansion over time. A majority of the generation will come from large GE Vernova (GEV) turbines and associated electrical infrastructure, with additional capacity provided by Solar Turbines, a wholly owned subsidiary of Caterpillar (CAT). This positions Kilby among the largest co-located natural gas power and data center developments in the U.S., supporting the next phase of American AI growth by leveraging America's natural gas advantage. By co-locating new, large-scale power generation with the data center, Kilby is designed to deliver reliable, dispatchable electricity directly to Microsoft while aiming to mitigate impacts on the regional grid that consumers rely on. This agreement represents an important milestone toward Chevron's Final Investment Decision (FID), which is expected by the end of 2026, subject to the completion of other necessary conditions. The project is targeting mid-teen returns. Kilby is expected to generate diversified cash flow that is independent of oil and gas price cycles, further supporting resilient shareholder returns. First power delivery is anticipated in 2028.
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Analyst Views on CVX
Wall Street analysts forecast CVX stock price to rise
19 Analyst Rating
15 Buy
4 Hold
0 Sell
Strong Buy
Current: 169.200
Low
158.00
Averages
176.95
High
206.00
Current: 169.200
Low
158.00
Averages
176.95
High
206.00
About CVX
Chevron Corporation is an integrated energy company. The Company produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance its business and industry. The Company’s segments include Upstream and Downstream. Upstream operations consist primarily of exploring for, developing, producing and transporting crude oil and natural gas; liquefaction, transportation and regasification associated with LNG; transporting crude oil by major international oil export pipelines; processing, transporting, storage and marketing of natural gas; carbon capture and storage; and a gas-to-liquids plant. Downstream operations consist primarily of the refining of crude oil into petroleum products; marketing crude oil, refined products, and lubricants; manufacturing and marketing of renewable fuels, and transporting of crude oil and refined products by pipeline, marine vessel, motor equipment and rail car.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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