Does Chevron's Joint Venture With GE Vernova Make the Stock a Buy Ahead of 2027?

Data centers are driving energy demand like never before. However, there is a collective effort to ensure that energy remains affordable for residential customers. Not only that, but long interconnection times to the power grid mean that hyperscalers are scrambling for power solutions outside traditional utilities. This surge has driven strong demand for GE Vernova's (NYSE: GEV) gas turbines and the natural gas they consume.

Amid this growing demand, GE Vernova has partnered with Chevron (NYSE: CVX) on natural gas production and logistics, and the companies aim to deliver behind-the-meter power solutions to meet the massive power demands of AI data centers.

With facilities set to come online in 2027, does that make Chevron stock a buy?

Chevron will leverage its natural gas platform to power new data centers

Data centers require continuous baseload power, and many facilities are turning to on-site power generation or "behind-the-meter" deals to power themselves without connecting to the power grid. This has driven incredibly strong demand for GE Vernova's gas turbines, with a backlog that stretches years into the future.

Chevron and GE Vernova announced their partnership in January 2025, bringing together Chevron's expertise in natural gas production and logistics with GE Vernova's gas turbine technology. Along with investment firm Engine No. 1, the companies will develop 4 gigawatt-hours (GW) of behind-the-meter natural gas power through "power foundries" that support data centers. These foundries will use seven GE Vernova 7HA natural gas turbines and serve co-located data centers across the U.S. in the Southeastern, Midwestern, and Western regions.

For Chevron, the partnership leverages its domestic natural gas platform to fuel these massive gas turbines. Because the Permian Basin produces so much "associated gas," which is natural gas produced as a by-product of oil extraction, local gas prices in West Texas are ultra-low (and sometimes negative), and Chevron can use this oversupplied gas to directly power GE Vernova's gas turbines.

The agreement helps power AI data centers with reliable baseload energy but also raises concerns about its environmental impact. Burning natural gas still releases millions of tons of CO2 annually and clashes with technology companies' long-term net-zero-emission goals. To mitigate this, Chevron and GE Vernova will integrate Carbon Capture and Storage (CCS) technology, which could potentially capture up to 90% of emissions.

The partnership builds on Chevron's strong position in the industry

Chevron is scheduled to begin delivering natural gas to these power plants in late 2027 or early 2028. This is primarily due to equipment delays, as GE Vernova's gas turbines are unlikely to be delivered by then.

While this arrangement with GE Vernova alone doesn't make Chevron a buy, when you combine it with the company's wide-ranging, integrated oil and gas business model and disciplined approach to capital expenditures, Chevron is a top energy stock to consider buying today.

Courtney Carlsen has positions in Chevron and GE Vernova. The Motley Fool has positions in and recommends Chevron and GE Vernova. The Motley Fool has a disclosure policy.