Energy giant Chevron says a deepwater find in the Carnarvon Basin in Western Australia could help to underpin an expansion at its Wheatstone gas project.

The Clio-3 discovery well, located about 150 kilometres northwest of Onslow in WA's Pilbara region, penetrated about 79 metres of net gas pay at a depth of 4.3 kilometres, Chevron said in a statement on Wednesday.

The president of Chevron Asia Pacific Exploration and Production Co, Jim Blackwell, said WA would play a leading role in the company's long term plans.

"We expect this discovery, together with our previous discoveries in this permit area, to underpin expansion opportunities at the Wheatstone liquefied natural gas hub," Mr Blackwell said.

The Wheatstone gas project is expected to begin production in 2016.

Full announccement below:

Chevron Announces Further Drilling Success in Australia
Clio-3 discovery expected to further increase company's long-term growth plans

PERTH, Western Australia - July 7, 2010 - Chevron Corporation's subsidiary, Chevron Australia Pty Ltd, today announced a new deepwater natural gas discovery in a Chevron-operated block in the Carnarvon Basin offshore Western Australia, Australia's premier hydrocarbon basin.

The Clio-3 discovery well is located in the WA-205-P permit area approximately 90 miles (150 km) northwest of Onslow. Situated in 3,186 feet (971 m) of water and drilled to a depth of 14,137 feet (4,309 m), the well penetrated approximately 260 feet (79 m) of net gas pay. Clio-3 marks the third consecutive discovery on the Clio structure.

George Kirkland, vice chairman, Chevron, said, "We are continuing to invest in a significant exploration program to underpin the long-term growth of our Australian business. Our continued success underscores the quality of our Australian portfolio and our technical competence."

Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Co., added that the company is realizing the opportunities it has as a leading lease holder in the Carnarvon Basin, noting that, "Western Australia will play a key role in our long-term plans to build a leading natural gas business to supply energy safely and reliably to Australia and the Asia-Pacific. We expect this discovery, together with our previous discoveries in this permit area, to underpin expansion opportunities at the Wheatstone liquefied natural gas hub."

Chevron, through its Australian subsidiary, holds a combined 66.66 percent interest, while Shell Development (Australia) holds the remaining interest. More tests are being conducted on data gathered from the discovery well, and additional work is required to determine the extent and commercial viability of the discovery.