Microsoft in Talks for $7 Billion Chevron Gas Plant as U.S. Data Center Pipeline Hits 378 GW
Gas-fired capacity tied to data centers nearly doubled in the first half of 2026, now making up half of all new U.S. gas power in development.
Microsoft is in talks with Chevron for a $7 billion gas-powered data center in Texas, Oilprice.com reported on Sunday (2026-08-30). The disclosure arrives as U.S. gas-fired power capacity in development has grown to 378 gigawatts — up 50% in the first six months of 2026, according to Global Energy Monitor.8
Of that 378 GW, 189 GW is tied directly to data centers. Planned gas-fired power capacity linked to AI and hyperscale computing nearly doubled in the first half of 2026 alone, meaning data centers now account for roughly half of every new gas plant entering the U.S. development queue.8
Chevron already has a precedent in place. The company and Engine No. 1 secured a 20-year agreement to supply natural gas electricity to a Microsoft data center in West Texas, Rigzone reported on June 23 (2026-06-23). The plant, Project Kilby, is rated at 2.67 gigawatts. Long-duration offtake agreements of that kind are what make gas generation bankable; lenders need revenue certainty before committing capital at scale.5
NYMEX Henry Hub front-month gas traded at $2.86/MMBtu on Monday (2026-08-31), up 0.35% on the day. Low gas prices keep new generation economically competitive, but they also compress the revenue outlook for producers and power developers justifying decade-long capital programs. The buildout arithmetic works at current gas prices; it becomes harder if they shift materially in either direction.8
ING Research estimates AI-driven data centers will consume more than 10% of U.S. electricity by 2030, up from around 4% at mid-2026. A June 2026 Business Insider analysis found that data centers permitted through 2025, if all come online, would use between 224.3 terawatt-hours and 358.8 terawatt-hours annually, a 50% increase over the prior cohort.6,8
The U.S. produces around 110 billion cubic feet per day of natural gas and overtook Qatar as the world's largest LNG exporter in the first quarter of 2024. Between 10% and 15% of domestic output flows to export terminals in any given year, according to Forbes.6
Shell's 2026 LNG Outlook forecasts the U.S. will supply more than one-third of global LNG in the early 2030s. Asia Pacific imported 168.7 million tons from global markets last year, Europe 126.2 million tons, per International Gas Union data. But if data center power demand absorbs domestic gas faster than production grows, generators and LNG export terminals will compete for the same supply, a tension not yet priced into long-term export contracts.7,6
The Strait of Hormuz closure on February 28 (2026-02-28) added geopolitical weight to those supply calculations. EIA data show the strait carries around 21 million barrels per day of petroleum liquids, equivalent to roughly 21% of global consumption in 2022. Saudi Aramco's East-West crude pipeline offers some bypass capacity, rated at 5 million barrels per day and expanded temporarily to 7 million b/d in 2019. For LNG shippers, no equivalent overland route exists. JKM, the Asian LNG benchmark, was at $23.17/MMBtu on Monday (2026-08-31).1,3
In China, grid operators are resisting plans to raise the share of renewable electricity for AI data centers, citing difficulties in forecasting peak demand loads, Oilprice.com reported in June (2026-06-22). China has 36 nuclear reactors under construction, accounting for more than 49% of all nuclear construction worldwide, per the IAEA's Power Reactor Information System. A Chinese power mix built increasingly around nuclear rather than imported gas could moderate the long-term LNG demand that U.S. export developers are pricing into their investment cases.4,3
LNG projects typically cost $8 billion to $15 billion each, according to Forbes, and higher interest rates raise the cost of that capital. The Global Energy Monitor figure of 378 GW reflects announced and development-stage capacity, not plants under construction. The distance between a signed offtake agreement and a commissioned facility is where cost assumptions and permitting timelines have historically caught developers short.2,6
A signed agreement between Microsoft and Chevron on the $7 billion Texas project would give the sector a second large-scale data center power contract to cite alongside Project Kilby. Until then, the 189 GW tied to data centers represents a set of announced intentions. Whether lenders price that pipeline as durable demand or speculative exposure will shape how fast those gigawatts move from permit filings to construction starts.8,5