McGuireWoods served as legal adviser to Chevron U.S.A. Inc. in negotiating an agreement between its wholly owned indirect subsidiary Energy Forge One LLC and Microsoft Corp. to develop a natural gas power facility in West Texas that will provide dedicated electricity to a co-located Microsoft-operated data center under a 20-year power purchase agreement. Chevron and the investment firm Engine No. 1 collaborated on the development, known as Project Kilby.
Kilby will be among the largest co-located natural gas power and data center developments in the United States. It is expected to deliver about 2.67 gigawatts of power generation capacity, built through a phased, modular approach that enables incremental expansion. The innovative structure will deliver reliable, dispatchable electricity directly to Microsoft, supporting the next phase of AI growth while avoiding strain on regional electricity systems.
The McGuireWoods team was led by partner Brian Kelly and associates Mark Staines and Jacob Lubinski, along with associate Michelle Lim Harris. The team also included Julia English, Katlyn Davis Farrell and Jake Maguire (regulatory); and Makram Jaber and Eric Mothander (environmental).
“This agreement represents a game-changing development in electricity offtake structuring, particularly in the data center space,” said Kelly, co-leader of the firm’s Energy Industry Team. “The novel concepts embedded in this transaction required creative solutions to satisfy Chevron’s commercial objectives and the stringent performance standards demanded by Microsoft. Our team was proud to assist in this historic transaction.”
McGuireWoods is a leader in helping clients develop innovative solutions to meet the data center industry’s surging electricity demands. In 2025, the firm advised NiSource Inc.’s subsidiaries Northern Indiana Public Service Company LLC (NIPSCO) and NIPSCO Generation LLC (GenCo) in structuring a groundbreaking electric service agreement with Amazon to supply up to 3 gigawatts of capacity for Amazon data centers in Northern Indiana. The firm also secured equity financing and led negotiations for construction and power purchase agreements for the generation facilities.
McGuireWoods’ cross-practice data centers team has facilitated the development of millions of square feet of data center space in markets throughout the country. The firm provides strategic guidance on transactions, site selection, permitting and energy procurement, with public affairs and advocacy support from McGuireWoods Consulting.
