Chevron signed a 20-year deal to provide electricity to a Microsoft data center in West Texas, opening a new line of business for the oil giant but raising questions about potential environmental effects.
Texas-based Chevron announced the agreement Monday and said it plans to build 2.67 gigawatts of natural gas-fueled generation over time at the Project Kilby site in Reeves County. It would be Chevron’s first large-scale power plant to supply a data center. But the company already has extensive operations in the area, which is part of the prolific Permian Basin oil field.
Gas in the Permian Basin is cheaper than most other parts of the country, giving the project a built-in cost advantage. The field produces huge amounts of gas along with crude — so much oil that producers sometimes have to pay pipeline companies to ship the fuel out of the region.
“Chevron is uniquely positioned to deliver power to customers with certainty, speed and at a competitive cost, leveraging Permian natural gas and our proven execution capabilities,” Jeff Gustavson, Chevron’s president of New Energies, said in a statement.
