Microsoft, Chevron Anchor 2.67 GW Kilby AI Data Center In Pecos
Microsoft unveiled a multibillion-dollar 2 GW AI data-center campus in Pecos, West Texas backed by a 20-year, 2.67 GW behind-the-meter power deal with Chevron and Engine No. 1's Project Kirby - the largest co-located gas-and-compute build in the United States.
Key Takeaways
Microsoft announced a 2 GW AI data-center campus in Pecos, West Texas, backed by a 20-year PPA with Chevron for up to 2.67 GW of behind-the-meter natural gas from Engine No. 1's Project Kirby - the largest co-located gas-and-compute build announced in the US.
Kirby will run on seven GE Vernova 7HA gas turbines plus additional Caterpillar Solar Turbines capacity; Chevron finances and operates the plant, with first power delivery targeted for 2028 and phased ramp-up over five to seven years.
The behind-the-meter setup powers the campus independently of ERCOT, bypassing Texas grid interconnection queues that have delayed rival data-center projects, with a future grid interconnection path envisioned.
Microsoft expects about 6,000 construction jobs at full buildout, while Chevron projects over $10 billion in state and local tax revenue; cooling will use non-potable brackish groundwater and produced water from Permian oil and gas operations.
The deal builds on Chevron and Engine No. 1's January 2025 partnership targeting up to 4 GW of gas generation for data centers and an April 2026 exclusivity agreement with Microsoft.
Kaan Tınmaz
Microsoft has unveiled plans for a 2 gigawatt AI data-center campus in Pecos, West Texas, matched with a 20-year power purchase agreement with Chevron for up to 2.67 GW of behind-the-meter natural gas capacity supplied by Engine No. 1's Project Kirby. The deal marks one of the largest co-located gas-and-compute builds ever announced in the United States and gives Microsoft dedicated power for AI workloads outside the ERCOT interconnection queue.
Kirby Turbines Bolted Onto A Redmond Campus
Chevron said Kirby will run on seven GE Vernova 7HA natural gas turbines already secured under the oil major's January 2025 partnership with Engine No. 1, with additional capacity coming from Caterpillar's Solar Turbines subsidiary. Chevron will finance and operate the plant; Microsoft will draw the power under the 20-year PPA. First delivery is targeted for 2028, with capacity ramping in phases as construction unfolds over the next five to seven years.
Microsoft's Bet: 6,000 Jobs, $10 Billion In Local Tax Revenue
Microsoft has described the campus as a multibillion-dollar investment and expects about 6,000 construction jobs at full buildout. Details of the buildings themselves remain unpublished; the company likens the site to its Phoenix, Arizona campus. Chevron says Kirby will deliver more than $10 billion in state and local tax revenue over its life and will use non-potable brackish groundwater plus produced water from Permian oil and gas operations for cooling.
Behind The Meter, Ahead Of The Grid
Kirby's behind-the-meter arrangement means the campus is powered independent of ERCOT, insulating Microsoft's AI factories from Texas grid queues that have delayed rival data-center builds. A future interconnection path is envisioned as the plant matures. The setup mirrors the Chevron and Engine No. 1 January 2025 partnership, which committed the pair to up to 4 GW of gas generation for data centers, and follows a November decision to make West Texas the site of their first plant. Chevron and Engine No. 1 inked an exclusivity agreement with Microsoft in April 2026 that laid the groundwork for this deal.
What is Project Kirby and how much power will it supply to Microsoft?
Project Kirby is a behind-the-meter natural gas plant developed by Chevron and Engine No. 1 in Pecos, West Texas. Under a 20-year power purchase agreement, it will supply Microsoft's 2 GW AI data-center campus with up to 2.67 GW of dedicated capacity, using seven GE Vernova 7HA turbines plus additional capacity from Caterpillar's Solar Turbines.
When will the Pecos AI data center receive power?
First power delivery is targeted for 2028, with capacity ramping in phases as construction unfolds over the next five to seven years.
Why is the campus being built behind the meter, outside ERCOT?
The behind-the-meter arrangement means the campus is powered independently of the ERCOT grid, insulating Microsoft's AI workloads from Texas interconnection queues that have delayed rival data-center builds. A future interconnection path is envisioned as the plant matures.
What are the economic and environmental aspects of the project?
Microsoft calls it a multibillion-dollar investment expected to create about 6,000 construction jobs, while Chevron projects more than $10 billion in state and local tax revenue over the plant's life. Cooling will rely on non-potable brackish groundwater and produced water from Permian oil and gas operations rather than fresh water.
