Chevron Corporation has announced that Energy Forge One LLC, a wholly owned subsidiary, has signed an agreement with Microsoft Corp. 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 investment firm Engine No. 1 have been collaborating on the development, known as Project Kilby.
Project Kilby is expected to deliver approximately 2.67 gigawatts of capacity and positions Kilby among the largest co-located natural gas power and data center developments in the United States, 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, Project Kilby is designed to deliver reliable, dispatchable electricity directly to Microsoft while aiming to mitigate impacts on the regional grid that consumers rely on.
The S&C team that advised Chevron included Inosi Nyatta, Renata Mascarenhas and Nolan Abboud. David Spitzer, John Jo and Joel Forsstrom advised on tax matters. Mehdi Ansari and Jay Thornton advised on IP matters. Pat Lingwall advised on commercial contracting matters. Matt Brennan advised on environmental matters. Jeanette Bander and Sarah Remmer Long advised on executive compensation matters. Saul Brander and Sizhuang Miao advised on ERISA matters.