Oil and gas major Chevron has chosen West Texas as the site of its first natural gas-fired power plant to serve the data center sector.

According to reports from Bloomberg, the company is in exclusive talks with an unnamed data center end user and expects to announce a final investment decision on the plant at the start of next year. The natural gas plant is expected to reach operational status in 2027 and will have a potential capacity of up to 5GW.

“We’ve got the gas,” Chevron's chief financial officer Eimear Bonner said to Bloomberg. “We are uniquely positioned to have a very competitive project.”

According to the company, the project is expected to produce 2.5GW by its third year of operation. The company said that the power plant is likely to be constructed separately from the grid to avoid competing with the electricity supply for the wider population.

Chevron first indicated its interest in powering the data center market in March. According to reports at the time, the company said it would target data center sites and power plants with around 1GW of capacity, which could come online in 2027 or 2028.

Earlier this year, the company also partnered with San Francisco-based hedge fund Engine No. 1 to develop and scale natural gas-powered power plants to serve co-located data centers in the Southeast, Midwest, and West of the US. Under the terms of the agreement, the partners agreed to collaborate with gas turbine manufacturer GE Vernova to supply the data center sector.

In March, Crusoe became the first data center developer to acquire natural gas turbines from the partnership, agreeing to purchase 4.5GW of natural gas power to supply its data centers across the US. Crusoe is the developer of the first Stargate data center in Abilene, Texas.

Chevron is not the only oil and gas company to target the data center sector. Earlier this month, ExxonMobil announced that it was in advanced talks with power providers and tech firms to supply data centers with natural gas plants integrated with carbon capture and storage systems.

Before this, in December, the company revealed plans for a new 1.5GW natural gas-fired power plant dedicated to powering data centers. The project is in the early stages of development. It would mark the first time Exxon has built a power plant that does not supply energy to its own operations.