Chevron has agreed to supply natural gas to fuel a massive Microsoft data center in West Texas under a 20-year contract, the oil major announced Monday.
The facility, known as Project Kilby, is expected to consume nearly 2.7 gigawatts of power, making it one of the largest single-site energy demands in the tech sector.
The deal highlights the intensifying competition for reliable power sources as artificial intelligence workloads strain existing grid capacity.
While Microsoft has committed to carbon-neutral operations, the partnership with Chevron signals a pragmatic shift toward fossil-fuel-backed generation to meet immediate, massive load requirements that renewables alone cannot yet satisfy at scale.
Natural gas prices have seen increased volatility amid surging demand from data centers and industrial users.
This long-term offtake agreement provides Chevron with a stable revenue stream while securing the baseload power Microsoft needs for its expanding AI infrastructure.