Chevron and Williams bet big on data center gas plants

Williams and Chevron are rushing to supply dedicated power to data centers, forging billion-dollar alliances with technology companies as artificial intelligence strains the U.S. electric grid.

Increased natural gas demand from data centers and other sources could force the United States to boost production by 36 percent by the mid-2030s, according to a July 2026 BloombergNEF report.

Williams, a major oil and gas infrastructure company, is building six behind-the-meter gas plants nationwide, including four for Meta data centers in Ohio. In mid-July 2026, it announced more than $5 billion in investments for these ventures, backed partly by private equity firm KKR. Its power purchase agreements with Meta run 10 to 12.5 years.

Chevron disclosed on July 31, 2026, its best quarterly profits in six years and confirmed a 20-year power purchase agreement with Microsoft for a 2.67-gigawatt data center in Texas—the only multi-gigawatt project with such a long-term contract, the company said.

Just five of the seven gas plants highlighted in the companies’ second-quarter 2026 results could emit up to 21 million metric tons of greenhouse gases annually, based on permit applications. That roughly matches Guatemala’s yearly emissions. Williams’ four permitted plants could release up to 9.6 million tons per year, though the company projects actual emissions at two-thirds lower. Chevron’s Texas facility could produce more than 11.5 million tons yearly.

Lukas Shankar-Ross, deputy director at Friends of the Earth, called the tech-industry fossil fuel partnerships “a lifeline to an industry that we need to be phasing out.”

Williams is also constructing a nine-mile gas pipeline in an Ohio suburb, designed to serve its Meta-affiliated plants and future data centers. President Chad Zamarin said in a May 2026 earnings call that the company “overbuilt the capacity” to create “an energy artery” for further projects.

Chevron’s New Energies president Jeff Gustavson said on the July 31 call that the Microsoft project “provides a repeatable model” and that the company is in talks with other customers, adding that “the grid cannot keep up with the demand from hyperscalers and others.”

Both firms insist their plants will operate within environmental rules. Williams spokesperson Alex Schott said the facilities are “designed to operate well below permitted limits,” while Chevron spokesperson Paula Beasley noted the Texas plant could add renewable generation later.

The question of whether these islanded plants will eventually connect to the broader grid looms over consumer electricity prices. Chevron has submitted an interconnection application and expects to link its Microsoft plant to the grid after 2030. Williams said it is evaluating future interconnection opportunities. “Whether these plants stay dedicated to data centers or join the grid is a massive question for the future of power prices in the country,” said Ashish Sethia, global head of commodities and energy at BloombergNEF.