Bolivia's Hydrocarbons Overseer Carlos Miranda said that about $250 million 260-kilometre pipeline would be a sprout of a $2.0 billion, 3,150-kilometre pipe from Santa Cruz, Bolivia, to Sao Raulo and Rio Grande do Sul in Brazil that has been under construction since July 1997.

The Transredes project would start from about the middle-point of the Bolivian tranch of the larger pipeline near Robore, Bolivia, to Cuiaba, in Southern Brazil, Miranda told journalists.

The 18-inch pipeline would have a daily transport capacity of 87.5 million cubic feet of gas, he said, adding the government was keenly considering the request. "As a tranch of the pipeline to Brazil would be used, the companies and their associates would take all provision needed to maintain its transport capacity," Miranda said.

Transredes is apipeline builder and operator. Half of the company is owned by Enron/Shell - which are the operators - and the other half is in the hands of all Bolivians over 21 at December 1995, when the government privatised the oil and gas sector.

The pipeline under construction, the longest in Latin America, is projected to come on line in late 1998.

It will initially transport 280 million cubic feet of natural gas a day from Santa Cruz to Brazil and after the fifth year the flow is expected to increase to 1.1 billion cubic feet. It will allow Bolivia to meet its commitment to deliver 7.2 trillion cubic feet of gas to Brazil over a 20-year period.

In Peru earlier this month, Shell was granted a 60-day extension of its exploration license for its $3 billion Camisea natural gas project. The license for Shell, which is the operating partner of the Peruvian joint venture with Mobil Corp, expired in May. Peru has 11 trillion cubic feet of gas and 600 million barrels of natural gas liquid in Camisea.

Meanwhile, bigoil players in Argentina are considering building another gas pipeline Argentine territory to southern Brazil, of about the same size and cost that the one under construction between Bolivia and Brazil.