Chevron’s subsidiary Energy Forge One entered a 20‑year agreement with Microsoft in June to construct a gas‑fired power plant adjacent to a Microsoft data‑center campus in Pecos, Texas, scaling to roughly 2.67 GW. The final investment decision is slated for the end of the year with power generation expected by 2028, aiming to capture excess natural gas from the Permian Basin that currently lacks sufficient pipeline capacity. Meanwhile, Permian gas output is projected by the EIA to average 29.2 Bcf/d this year—a 6 % increase and a regional record—yet the Waha pricing hub has logged negative prices on 118 of the first 131 trading days, forcing producers to pay to off‑load gas to keep oil wells operating.
The persistent negative pricing pressures upstream gas producers and related energy equities, tempering capital inflows and sentiment toward Permian‑focused oil‑and‑gas stocks such as CVX. The Microsoft‑Chevron partnership, however, introduces a strategic off‑take and could stimulate infrastructure investment, offering a modest counterbalance for industrial and utility assets. Overall, the market remains cautious, with a bias toward bearish outlooks for stranded gas assets while viewing the partnership as a limited positive catalyst.