Chevron (NYSE: CVX) has entered into a 20-year agreement with Japan-based Kyushu Electric Power to supply 0.7 million metric tons of liquefied natural gas per year. The company will provide the LNG from its Wheatstone plant. Let's see how profitable the Australian assets will be for the company.

Chevron's kangaroo leap
Australia, which is currently the fourth largest exporter of LNG, is set to experience diverse growth by 2020. In the Australian LNG landscape, Chevron's joint venture with ExxonMobil (NYSE: XOM) and Royal Dutch Shell (NYSE: RDS-A) (NYSE: RDS-B) is considered big. The Gorgon plant has a production capacity of 15 million tons per annum of LNG and a domestic gas plant with a capacity of churning out 300 terajoules per day. Chevron aims to boost total production to 25 million tons a year. Gorgon has $64 billion worth of supply contracts in advance of production scheduled for 2014. This ensures the revenue generation for the firm post-production.

The Wheatstone LNG plant has an annual capacity of 15 million tons. The plant is majority owned by Chevron (73%) along with Apache (NYSE: APA), Kuwait Foreign Petroleum Exploration, and Shell.

I believe the company has high chances of capitalizing through its primary LNG plants, Gorgon and the Wheatstone plant based in northwestern Australia. The company also has other plants, including the Browse Basin projects, the North West Shelf Venture, and other deepwater blocks.

Asia-Pacific to boost growth
Chevron is eyeing the Asia-Pacific region to market its Australian LNG production. With a cumulative production capacity of more than 30 million tons coming from Australia, the Asia-Pacific region should be one of the best revenue-generating markets for Chevron in the long term.

Asia-Pacific is set to provide ample opportunities to the LNG producers. Consumption in the Asia-Pacific region is expected to double over the next decade, with China and India as some of the major energy-consuming markets.

Japan, the biggest importer of natural gas, should also provide a good market for Chevron. The Fukushima nuclear meltdown has changed the country's fuel mix. LNG is replacing the demand for nuclear energy. Natural gas is currently contributing around 26% of the country's electricity with an import of 64.5 million tons. Demand for natural gas for power generation in Japan is projected to increase by 5 billion cubic feet in 2011.

South Korea, the second-largest buyer of LNG after Japan, could prove to be another lucrative market for Chevron. The country's long-term LNG supply contracts are expiring in 2015. The country at present buys LNG from Indonesia, Malaysia, and Brunei.

Foolish bottom line
I believe Chevron is in the right place at the right time and is heading in a positive direction. Chevron's share price rose to almost $110 last April but has now dipped to $90. I would call this a possible opportunity to grab a handful now. With recent happenings favoring Chevron, things are loaded in favor of the LNG king.

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Abantika Chatterjee doesn't own shares of any company mentioned. Motley Fool newsletter services have recommended buying shares of Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.