Brazilian President Luiz Inacio Lula da Silva launched on Thursday the construction of a 670-km gas pipeline cutting through the heart of the Amazonian rainforest.

The Urucu-Manaus pipeline will connect Coari, a city in the Urucu province, to Manaus, Amazonas state's capital. Beneath Urucu lies Brazil's largest onshore reserve of natural gas.

The state-owned oil company Petrobras estimates the project will be completed by March 2008 and will generate nearly 3,400 direct and 10,000 indirect jobs. The total cost of the project is estimated at 1 billion U.S. dollars.

In the first stage of operation, the pipeline will transport 4.7 million cubic meters of natural gas per day. The fuel will be mainly used at thermoelectric plants to generate electricity for Manaus and neighboring towns.

The natural gas from Urucu is to replace the diesel fuel and the fuel oil currently used to generate all of the electricity in the Amazonas state. The substitution will allow an annual cost reduction of 1.2 billion reais (600 million U.S. dollars), according to Petrobras.

Source: Xinhua