Power Infrastructure
Chevron to Build Its First Data Center Power Plant in Texas Permian Area
Natural gas‑fired facility in state energy region marks oil giant's entry into AI infrastructure
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A pumpjack east of Andrews, Texas, in the heart of the state's Permian Basin, the region's primary oil and gas production area, stands in an area where fossil fuel giant Chevron is launching a move into electricity generation.
Chevron Corp. has chosen West Texas as the location for its first power-generation facility aimed to support an artificial-intelligence data center, marking a significant pivot by the oil giant.
Chevron unveiled the plan for the initial 2.5-GW plant at a Nov. 12 investor day conference as part of a five‑year strategy that moves the company beyond its traditional role as a fuel supplier into direct electricity generation. The plant could expand to 5GW at a future point, the company said.
The natural gas-fired facility located in the Permian Basin marks Chevron's first move into powering AI workloads. This business model allows the company to bypass the regional grid and supply energy directly to a data center operator at a co-located site. Chevron stated that 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. Further details about this partnership have not been disclosed, nor were details on contractor selection.
Chevron New Energies is leading development of the West Texas data‑center power facility. The division said it is drawing on the company's natural gas production and operating experience to help meet the data center power needs.
Division President Jeff Gustavson said the Permian Basin site builds on Chevron's existing gas production network, giving the project a competitive edge. "In the Permian, we hold a unique data advantage through our interest in one out of every five wells, and we're building AI‑driven tools to unlock that potential," Gustavson said.
The facility will operate in a "behind‑the‑meter" setup, 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 an internal shift, he added: “We’re not just working to power the AI revolution—we’re applying it across our own business to create additional value.”
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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‑fired plants for U.S. data centers. The program will use GE Vernova 7HA gas turbines installed alongside data‑center sites at beyond Texas sites that were not identified.
But the Institute for Energy Economics and Financial Analysis, in a recent analysis of forecasted data center power load growth for some Southeast utilities, projected a risk of overbuilding gas infrastructure if forecasted data center demand falls short.
