Overview
A 2 GW Microsoft Campus on a Chevron-Built Gas Plant
Microsoft announced the Pecos campus on June 22, 2026, calling it one of the largest single capacity additions in its history: about 2 GW added over five to seven years. The site is near the city of Pecos in Reeves County, near the New Mexico line. Microsoft says the campus will resemble its Phoenix, Arizona campus and serve AI and cloud demand.
Reeves County is not Pecos County. AWS GW Ranch is the campus in Pecos County, a separate project by a separate operator.
| Offtaker | Microsoft |
|---|---|
| Power developer | Energy Forge (Chevron and Joulent, 50/50) |
| Location | Pecos, Reeves County, West Texas |
| Distance from Austin | About 380 mi W |
| Data center capacity | About 2 GW over five to seven years |
| Generation | Project Kilby, 2.67 GW gas, behind the meter |
| Turbines | Seven GE Vernova 7HA units plus Solar Turbines |
| Power contract | 20-year PPA, signed June 2026 |
| First power | Targeted 2028 |
| Status | Contracted; FID pending, may slip to 2027 |
Energy model
Project Kilby Runs Behind the Meter on Permian Gas
Project Kilby is a 2.67 GW natural gas plant co-located with the campus and running behind the meter (BTM), with no utility and no ERCOT (Electric Reliability Council of Texas) interconnection at the start. Capacity comes online in phases as the plant is built. Chevron has committed orders for seven GE Vernova 7HA turbines, with more capacity from Solar Turbines, a Caterpillar company. Fuel comes from Chevron's own Permian Basin production.
The turbines carry selective catalytic reduction (SCR) to cut nitrogen oxide emissions. Chevron says the plant will use non-potable brackish groundwater and is working on reuse of produced water from oil and gas operations. Microsoft says the data center will use closed-loop cooling and non-potable water where possible. Both companies say the plant could later export surplus power to the grid.
Chevron projects more than $10B in state and local tax revenue and about 6,000 construction jobs at full buildout. TD Securities analyst Jason Gabelman estimates the plant at about $9B.
Deal structure
An Oil Major and an Investment Firm Own the Power, Microsoft Buys It
Energy Forge One LLC signed the 20-year power purchase agreement (PPA) with Microsoft. In July 2026, Chevron and Joulent, the energy company Engine No. 1 built over three years with GE Vernova, formed Energy Forge as a 50/50 partnership for the project. National Grid made a $1.75B minority investment in Joulent at the same time. Microsoft is the load and the campus owner; it does not own the generation.
Compare AWS GW Ranch, where the hyperscaler controls its own off-grid plant, and Crusoe Abilene, where Microsoft leases from a developer. See Microsoft's Texas compute for the full portfolio.
Constraints
The Final Investment Decision Waits on State Permits
Chevron had guided to a final investment decision (FID) by the end of 2026. On Sept 21, 2026, Governor Abbott ordered the Texas Commission on Environmental Quality (TCEQ) to pause data center air and water permits until ERCOT's review finishes, expected mid-December 2026, and the order covers self-powered projects like Kilby. Chevron power solutions vice president Daniel Droog told Semafor on Oct 1 that permitting has caused some slowdown and the FID could move into 2027. Early earthworks are underway and Chevron still targets first power in 2028. See the Texas data center permit pause.
Record
Dataset Record
- Sources
- Microsoft, Chevron, Kirkland & Ellis (Joulent), Semafor, The Next Web, Data Center Dynamics, The Register, Global Data Center Hub, Texas Office of the Governor
- Last verified
- October 2026