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Chevron and Microsoft plan Permian gas power plant amid negative Waha
The project targets natural gas supply for a data center campus, with power scheduled to flow in 2028 after a final investment decision by year end.
Chevron’s subsidiary, Energy Forge One, is preparing to build a gas-fired power plant next to a Microsoft data center campus in West Texas, aiming to address a long running mismatch in the Permian Basin where production outpaces local demand for natural gas.
According to OilPrice, the company signed a 20 year agreement with Microsoft in June, with the plant ramping up to about 2.67 gigawatts. The final investment decision is expected by the end of this year, and power is planned to start flowing in 2028.
The broader problem is tied to gas that has proven hard to monetize locally, as the basin’s older fields tend to produce more natural gas alongside oil over time. OilPrice cites EIA expectations that Permian gas production will average 29.2 Bcf/d this year, up 6% and a regional record, while Waha, the Permian gas pricing hub, reportedly traded negative on 118 of the first 1
OilPrice also notes that while oil side activity in Midland has been shaped by restraint and slower growth, the gas dynamic is increasingly becoming the shared constraint as multiple West Texas energy issues begin to draw from the same buyer.
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