UPDATE 1-Woodside CEO says eyes Pluto gas expansion work

* Woodside eyes more Australian gas expansions

* Talks with 3rd parties to supply more gas to Pluto project

* Chevron downplays cooperation with Pluto (Recasts, adds details, quotes)

DARWIN, June 2 (Reuters) - Further expansion work could commence on the Pluto gas project in Australia when demand for liquefied natural gas recovers, with talks underway to line up additional gas suppliers, Woodside Petroleum Ltd's (WPL.AX) Chief Executive Don Voelte said on Tuesday.

But U.S. oil major Chevron (CVX.N) downplayed opportunities to eventually channel gas from its yet-to-be-developed Wheatstone gas field to Woodside to help underpin expansions of its majority-owned Pluto project.

"The fact is we have the gas and we are looking at the best economic development options," Chevron Australia Pty Ltd Managing Director Roy Krzywosinski said on the sidelines of an industry conference, adding that the western port of Onslow -- not Pluto -- offered a "good geographic position" to process Wheatstone gas.

Chevron's position has long been that it was committed to developing Wheatstone as a stand-alone project.

A blueprint of the project calls for two trains handling around 8 million tonnes of gas annually.

Krzywosinski said Wheatstone was an "ace" in Chevron's Australian portfolio, estimating 25-35 trillion cubic feet of gas sits in the field and nearby regions.

The Australian government, which must provide environmental clearance for new projects, has urged companies looking for gas to cooperate with each other to improves the economic viability of projects and reduce environmental footprints.

Voelte, also speaking after addressing the Australian Petroleum Production and Exploration Association conference, said Woodside had already held discussions with several "third party" gas suppliers to underpin future expansion work that could be years away and involve multiple new trains.

Woodside plans to start initial production from the project next year and gradually lift output.

"Despite the economic downturn, we remain confident on the long term demand for liquefied natural gas," Voelte said.

Construction of the initial stage of the $12 billion Pluto gas project off Australia's west coast was about 65 percent complete at the end of May, according to Voelte.

The first stage is restricted to a single-train production facility with planned output of 4.3 million tonnes a year.

Woodside has stepped up exploration off northwest Australia with the hope of securing additional gas reserves exceeding 3 tcf, a level required to underpin development of a second train. Australia has a number of other LNG projects in varying stages of development, including BHP Billiton's (BHP.AX)(BLT.L) proposed Scarborough field, Woodside's Browse and Sunrise fields, Japanese INPEX's Ichthys field and Chevron's Gorgon project.

Analysts have questioned the need for millions of tonnes of additional gas due uncertainty over long-term demand.

The Pluto project, estimated to hold 5 trillion cubic feet of gas, is being designed to with a processing capacity of 4.8 million tonnes a year. The first deliveries are earmarked for Japanese customers Kansai Electric Power Co. and Tokyo Gas Co. ($1=1.234 Australian Dollar) (Reporting by James Regan; Editing by Michael Urquhart))