Chevron says Microsoft-linked Texas data-center project remains on schedule

Chevron says unfinished permitting, engineering and financing for Project Kilby, its power project for Microsoft’s planned West Texas data-center campus, are not expected to delay first power targeted for 2028 or full energization targeted for 2031. Both dates are company forecasts, not completed construction or approval milestones.

That update comes after a September directive from Texas Governor Greg Abbott ordering the Texas Commission on Environmental Quality to halt permits sought by data centers until the Electric Reliability Council of Texas completes an audit. The directive also said state agencies should not advance related regulatory approvals until they receive the requested project information.

Chevron Chief Financial Officer Eimear Bonner said on the company’s October 30 earnings call that it was still working toward a final investment decision. Chevron had not completed its engineering, procurement and construction contract, permitting or financing. The company nevertheless says those unfinished workstreams have not changed the schedule.

Chevron announced in June that a subsidiary had signed a 20-year power-purchase agreement with Microsoft for the phased project, which is planned to reach about 2.67 gigawatts. Chevron said then that it expected to make a final investment decision by the end of 2026, subject to other conditions, and anticipated first power in 2028. For context on how power constraints can affect Microsoft’s capacity plans, the company recently ended its agreement for Nscale’s Loughton data center after a grid delay.

Texas had already required the Public Utility Commission of Texas and ERCOT to audit data centers in the grid-interconnection process, including electricity demand, on-site generation, water use, community effects, ownership and public support. Three days later, the governor’s office described Chevron’s proposed plant as compliant with the state’s standards because of its planned approach to grid and water impacts.

The public Texas directives reviewed for this story do not say whether Project Kilby is exempt from the September halt. They also do not identify which permits remain pending or establish that any Kilby permit has been suspended. No opened source independently confirms Chevron’s ability to meet the 2028 and 2031 targets.

Microsoft has described its Pecos campus as a multibillion-dollar investment expected to add about 2 gigawatts of data-center capacity over five to seven years. The campus is initially planned to use a co-located natural-gas plant “behind the meter,” meaning the plant would serve the site without first sending power through the public grid. Microsoft said it is funding the generation and supporting infrastructure.