Chevron Picks Texas for First AI Data Center Power Project

Core Viewpoint - Chevron Corp. is initiating a new business line by providing natural gas-fired power to a data center in West Texas, aiming to capitalize on the growing demand for energy driven by artificial intelligence [1][3]. Group 1: Project Details - The data center project is in exclusive discussions with an unnamed end user, with a final investment decision expected early next year [2]. - The facility is projected to be operational by 2027, with a future capacity to generate up to 5,000 megawatts [2]. - The project is anticipated to reach a capacity of about 2,500 megawatts by its third year, equivalent to more than two nuclear reactors [4]. Group 2: Market Context - There is a significant demand for energy to power data centers, which are increasingly located near fuel sources rather than population centers [3]. - Chevron is strategically positioned in the Permian Basin, which produces an excess of natural gas, often leading to flaring due to pipeline constraints [3]. Group 3: Financial Strategy - Chevron aims to grow production through 2030 while reducing capital expenditures, which is expected to increase free cash flow by 14% annually over the next five years [6]. - The company has partnered with Engine No. 1 to secure an order for seven large natural gas turbines from GE Vernova Inc., enhancing its competitive edge in this new venture [5].