The Perth-based junior has formed a joint venture company, Cal LNG, with Xstate Resources (18%) and Indonesian-focused private company Blue Sky Exploration and Production Holdings (40%) to tackle the project.
Xstate is part of a JV with AOC in its Californian Alvares and Dempsey prospects, while Blue Sky is an offshore oil producer working with Indonesian state-owned company Pertamina.
AOC said it was already in negotiations over the site for the LNG facility, with a number of potential locations identified.
The project is intended to fill a hole in the western coast market with limited LNG projects providing access to Asian markets from the sunny side of the US.
"The formation of Cal LNG adds another growth platform for AOC in California and we are committed to building a multi-tier energy business focused on this market," AOC managing director Gary Jeffery said.
"Further strengthening our view is the fact that there are limited LNG export facilities on the West Coast of the United States and we intend to capitalise on this.
"The sites we have identified are situated in locations that give us flexibility to pursue LNG export opportunities and growing US LNG transport markets.
"The involvement of Blue Sky in the joint venture is a strong vote of confidence for AOC, as they are a successful oil production company and understand the technical and regulatory issues associated with taking a project into development. They have been very involved in the Cal LNG strategy to date and they bring significant expertise to the joint venture."
Jeffrey assured AOC's shareholders that the LNG project would not distract from the company's focus on its Californian tenements, with advanced discussions taking place to find a replacement farm-in partner for Dempsey and Alvares after Thailand-focused partner Northern Gulf Petroleum pulled out of a heads of agreement in October.
"It is important to stress that advancing Dempsey and Alvares is our first and immediate priority, and the formation of Cal LNG will not distract us from this," he said.
"Our priority is to secure agreements on terms that are favourable to our shareholders, increase the value of our assets, and deliver sufficient funding while maintaining our conservative capital structure."
