Chevron (NYSE: CVX) and forest products giant Weyerhaeuser (NYSE: WY) today announced a letter of intent (LOI) to assess the feasibility of commercializing cellulosic biofuels.

The companies plan to focus on researching and developing technology that can transform wood fiber into economical, clean-burning biofuels.

Feedstock options would include a wide range of materials from Weyerhaeuser's existing forest and mill system, and cellulosic crops planted on Weyerhaeuser's managed forest plantations.

The venture would leverage the strengths of both companies, combining Chevron's technology capabilities with Weyerhaeuser's expertise in collection and transformation of wood, land stewardship, crop management, biomass conversion and ability to deliver sustainable cellulose-based fiber at scale.

"Chevron is investing in cellulosic biofuels because we believe they will play a role in meeting future energy growth," said Dave O'Reilly, chairman and CEO of Chevron.

"This collaboration aligns with our long-term business strategy to accelerate the commercial development of nonfood based biofuels. While there are several research and technology hurdles that will need to be addressed before large-scale commercialization of cellulosic feedstocks occurs, we believe this partnership will accelerate the achievement of that reality."

Both Chevron and Weyerhaeuser already have separate research partnerships under way to accelerate the development of cellulosic biofuels.

Chevron has forged alliances with the Georgia Institute of Technology, the University of California at Davis, the Colorado Center for Biorefining and Biofuels, and the U.S. Department of Energy's National Renewable Energy Laboratory.

Weyerhaeuser has been collaborating with several research universities, national laboratories and technology-based companies in research on conversion of forest products into ethanol and other biofuels.

Weyerhaeuser, one of the world's largest forest products companies, was incorporated in 1900. In 2006, sales were $21.9 billion.