Chevron to develop major Australia LNG project

NEW YORK (Reuters) - Chevron Corp. (CVX.N: Quote, Profile, Research, Stock Buzz), the second-largest oil and gas company in the United States, said on Sunday it plans to develop a new Australian liquefied natural gas (LNG) project based on its Wheatstone natural gas discovery.

Chevron said the facility will be located on the northwest coast of Australia and have initial capacity of at least one 5 million-ton-per-year LNG production train with expansion capacity.

The facility will also provide commercial domestic gas to the local market.

Discovered in 2004, Wheatstone is located 90 miles offshore in the Carnarvon Basin in water depths of around 650 feet.

The initial phase will tap an estimated 4.5 trillion cubic feet of natural gas resources within the two Chevron-operated permits that include Wheatstone.

Demand for LNG is rising, in part because natural gas is relatively clean burning. Liquefying natural gas allows it to be transported from remote places without building vast networks of pipelines.

Western Australia, rich in natural gas, is home to several major LNG developments.

"The Wheatstone LNG project reinforces Australia as an expanding and reliable supplier of natural gas for the 21st century," said Roy Krzywosinski, managing director of Chevron Australia.

(Reporting by Mark McSherry; Editing by Tomasz Janowski)