Chevron Corp. has chosen West Texas as the location for its first power generation facility aimed at supporting an artificial intelligence data center, marking a major turnaround for the oil giant.
Chevron unveiled the plan for the initial 2.5GW plant at an investor day conference on Nov. 12 as part of a five-year strategy that moves the company beyond its traditional role as a fuel supplier to direct electricity generation. The plant could expand to 5 GW at a future point, the company said.
The natural gas facility located in the Permian Basin is Chevron’s first step in powering AI workloads. This business model allows the company to bypass the regional grid and supply power directly to a co-located data center operator. Chevron said operations are scheduled to begin in 2027.
The company did not provide an update on the specific site and said it is in exclusive negotiations with an unnamed operator. No further details about this partnership were disclosed, nor were details about the selection of the contractor.
Chevron New Energies is leading the development of the West Texas data center power facility. The division said it leverages the company’s natural gas production and operational expertise to help meet the data center’s energy needs.
Division President Jeff Gustavson said the Permian Basin site builds on Chevron’s existing gas production network, giving the project a competitive advantage. In the Permian, we have a unique data advantage thanks to our interest in one in five wells, and we are building AI-powered tools to unlock that potential, Gustavson said.
The facility will operate in a “behind the meter” configuration, supplying electricity directly to a data center rather than through the regional grid. according to Gustavson. Framing the project as both an external opportunity and internal change, he added: “We are not only working to drive the AI revolution, but we are applying it to our own business to create additional value.”
The announcement follows Chevron’s February 2025 partnership with gas engineer producer GE Vernova and investment firm Engine No. 1 to develop up to four natural gas plants for US data centers. The program will use GE Vernova 7HA gas turbines installed adjacent to data center sites in locations beyond Texas that have not been identified.
But the Institute of Energy Economics and Financial Analysis, en a recent analysis of the projected growth in data center energy load for some companies in the Southeast, he foresaw a risk of overbuilding gas infrastructure if projected data center demand falls short.
