other
Capital spending on the Project Kilby power facility
Not sized
No source gives the project’s spending or the segment that carries it, and the AI share of the load the plant serves is not stated, so any size would be a judgment share of consolidated capex under a ceiling on an unstated AI share. The channel is read described and unsized (methodology, AI named beside another cause, which covers capital named together with AI); the ceiling, consolidated capex of and affiliate capex of , is quoted in the metrics.
described, no sizedisclosure: described· motive: exploratory· before LLMs: expanded· layer: facilities
Opened this quarter. The project is spending ahead of a final investment decision: large turbines and small block generation secured, an EPC contractor engaged and turbine deliveries beginning during 2026 (claims c4, c5 and c2), with turbine queue talks under way with GE Vernova and other manufacturers (claim c10). No amount is given. U.S. capex outside upstream and downstream was against a year earlier, which shows no step up, though the filing does not say which segment carries the project. It is capital, shown and left out of the spend total. Funding is read operating-cash-flow: the sources support the organic part, paid from the company’s own cash; the CFO also places part in the affiliate outlook, but no source names the affiliate or its partners and the quarter’s affiliate capex shows no power row, so mixed funding is not supported (Engine No. 1 was party to the Q1 exclusivity agreement on the offtake, claim c3, not named as an investor).
Evidence: 5 quotes, 4 figures, 3 confounds, 2 from before coverage
Capital spent developing Project Kilby ahead of a final investment decision expected later in 2026: large gas turbines and small block generation secured from manufacturers including GE Vernova, engineering by a selected EPC contractor, an air permit and water supply. The CFO says the project sits in both the organic and the affiliate capital outlooks; no source names the affiliate or its partners, and no amount is given in any source, so the channel is described and unsized, with consolidated and affiliate capital expenditures quoted as the ceiling. Capitalized, so it is traced and shown and left out of flow totals (methodology, capital spending); it would reach the income statement as depreciation once the plant runs.
Why this motive
Spending on a plant ahead of its revenue and ahead of a final investment decision (claim c2) is the exploratory tell, as on Verizon's success-based fiber capital for AI customers.
Before LLMs: expanded
At the anchor the FY2024 10-K reported plans to jointly develop scalable natural gas-fired turbine power for U.S. data centers and listed power generation for data centers among the new energies businesses, with no AI named (anchor claims cvx-anchor-c4 and cvx-anchor-c5); no spending on it was given. Capital spending on generation predates LLMs and no quarter of this build before AI can be traced, so the level has no baseline. In coverage the plant is being built for capacity contracted to a data-centre customer, so volume moved and the tag is expanded (methodology, facilities for data centres). The size is the whole of an activity that existed before.
“These include additional fuel solutions utilizing hydrogen and its derivatives such as ammonia, carbon emissions management through carbon capture and offsets, and power generation for data centers.”
“Announced plans to jointly develop scalable power solutions using natural gas-fired turbines with flexibility to integrate carbon capture and storage to support growing energy demand from U.S. data centers.”
Figures
- Capital expenditures (consolidated) · 2026-CQ2
- Affiliate capital expenditures (not included in consolidated capex) · 2026-CQ2
- Capital expenditures, United States, Other (outside upstream and downstream) · 2026-CQ2
- Capital expenditures, United States, Other, prior year · 2025-CQ2
What else could explain it
- line composition: Consolidated capex of holds upstream, downstream and legacy Hess spending, which the 10-Q names as the reason capex rose; no power share is given, and no filing says which segment holds the project. It is the ceiling on the organic part, not a size.
- other: The CFO places Kilby in both the organic and the affiliate capital outlooks (claim c9). The quarter’s affiliate capex of is outside consolidated capex and its rows are upstream and downstream only, so no affiliate power spending is visible in the quarter.
- other: Data-centre demand is not an AI label: the plant serves a data center complex whose AI share of load is not stated, and the President of New Energies names demand from hyperscalers and others (claims c1 and c7).
Quotes
“The U.S. is undergoing a structural shift in electricity demand as AI accelerates and reliable power is becoming the critical constraint.”
“We recently signed a 20-year take-or-pay power purchase agreement with Microsoft for 2.67 GW of firm behind-the-meter capacity supporting its co-located data center complex. We're now focused on execution, with permitting and EPC activities progressing towards a final investment decision later this year.”
“Signed an agreement to develop a power facility in West Texas designed to provide approximately 2.67 gigawatts of behind-the-meter dedicated electricity capacity to Microsoft under a 20-year power purchase agreement.”
“Within that, we had expected to have a power project within that capital range. The one that Jeff talked about, Project Kilby, is reflected in both the organic capital outlook and range and the affiliate capital outlook and range.”
“When we look to the future, turbine availability is tight. We have some deep relationships with GE Vernova and other manufacturers. We're already talking to them about their queues.”