Chevron Corp Waha to Watts: CVX Inks Long-Term Natural Gas-Fired Power Agreement with Microsoft

Research evidence excerpt

Chevron Corp Waha to Watts: CVX Inks Long-Term Natural Gas-Fired Power Agreement with Microsoft

J P M O R G A N North America Equity Research

22 June 2026

Chevron Corp Overweight

CVX, CVX US

Waha to Watts: CVX Inks Long-Term Natural Gas- Price (18 Jun 26):$173.63

Fired Power Agreement with Microsoft

Oil & Gas Exploration & Production

JPM View: CVX signed a 20-year agreement with Microsoft (covered by JPM Arun Jayaram AC

Software – Large Cap / Mid- & Small Cap analyst Arti Vula) to supply natural-gas– (1-212) 622-8541

fired power to a data-center campus in West Texas. The project – named Project arun.jayaram@jpmchase.com

Kilby and developed alongside Engine No. 1 – is expected to deliver first power Pankaj Bhatter, CFA

by 2028 and ramp to ~2.67 GW over time, supported by committed orders for seven (1-212) 622-3795

GE Vernova (covered by JPM Clean Energy, Power Infrastructure, and Sustainable pankaj.bhatter@jpmchase.com

Investing analyst Mark Strouse) gas turbines, with FID still anticipated later this Jack Jerusalmi

year. On the demand side, we view the offtake as durable, with Microsoft doubling (1-212) 622-6552

jack.jerusalmi@jpmorgan.com

down on data-center capacity. Importantly, we continue to believe the most J.P. Morgan Securities LLC

compelling element of the structure is its behind-the-meter design, whereby the

plant generates its own power on-site and feeds the campus directly without

drawing on the grid or involving a local utility, fed by cheap Permian associated

gas at Waha. We think the deal is consistent with our prior thesis that the

commercial structure is designed to deliver competitive returns and a cash flow

stream that is uncorrelated to the underlying commodity, providing valuable