Microsoft, Chevron, and Engine No. 1 sign exclusivity agreement for natural gas power supply to AI data centers

Ppa Gas announced USA Apr 2, 2026

2.5 GW

Capacity

development

Stage

Microsoft, Chevron, and Engine No. 1 have entered into an exclusivity agreement for the supply of up to 2.5GW of natural gas power to Microsoft's new data centers. This deal is tied to a proposed $7 billion natural gas-fired power plant that Chevron and Engine No. 1 plan to construct in West Texas. The power plant, expected to be operational by 2027, will utilize GE Vernova's 7HA natural gas turbines. This agreement supports Microsoft's rapid data center expansion to meet the demands of its AI systems.

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Counterparts (3)

Developer

Engine No. 1

company

Engine No. 1 is an investment firm focused on reindustrializing the United States by building and investing in innovative companies. It is registered as an investment adviser with the U.S. SEC.

Chevron Corporation

company

San Ramon-based integrated energy company with global operations in oil, gas, and renewable energy. One of the world's largest publicly traded oil and gas companies, with expanding interests in hydrogen, carbon capture, and renewable fuels.

Offtaker

Microsoft

company

Redmond-based technology giant with a significant global presence, investing heavily in data center infrastructure, cloud computing, and renewable energy procurement to power its operations. Employs over 221,000 people worldwide.

Deal Analysis

Microsoft, Chevron, and Engine No. 1 have entered an exclusivity agreement for up to 2.5 GW of natural gas power supply to Microsoft's new data centers in the USA. This agreement is tied to a proposed $7 billion natural gas-fired power plant in West Texas, expected to be operational by 2027. The plant will utilize GE Vernova's 7HA natural gas turbines, supporting Microsoft's data center expansion for AI systems.

Exclusivity agreement for 2.5 GW natural gas power supply
Microsoft, Chevron, and Engine No. 1 are counterparties
Deal tied to proposed $7 billion natural gas-fired power plant
Plant expected operational by 2027 in West Texas
GE Vernova's 7HA natural gas turbines to be utilized

Source Intelligence

KEY DETAILS

The deal is tied to a proposed $7 billion natural gas-fired power plant. The power plant will utilize GE Vernova's 7HA natural gas turbines. Commercial terms have not been finalized.

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Capacity

Microsoft, Chevron, and Engine No. 1 have signed an energy deal that could see the hyperscaler receive up to 2.5GW of natural gas power to use for a new data center.

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Location

News of the agreement was first reported by Bloomberg , which said the deal will be tied to a $7 billion natural gas-fired power plant that Chevron and Engine No 1 are proposing to build in West Texas.

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PPA Details

Microsoft, Chevron, and Engine No. 1 have signed an energy deal that could see the hyperscaler receive up to 2.5GW of natural gas power to use for a new data center. The companies have entered into what they call an “exclusivity agreement” relating to power generation and offtake, but said no commercial terms have been finalized.

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Financials

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COD

It is expected to be operational by 2027.

PARTIES MENTIONED IN SOURCE

Microsoft buyer