Chavez working to expand regional pipeline dream

ASUNCION, Paraguay, Apr 20 (Reuters) Venezuelan President Hugo Chavez sought support from the leaders of three other South American countries for a sweeping energy project he bills as a crucial part of his effort to curb US economic influence in the region.

The leftist Chavez is leading plans for a giant pipeline to carry Venezuela's natural gas to Brazil and Argentina.

Yesterday, he traveled to Asuncion to meet with the presidents of Bolivia, Uruguay and Paraguay, who have expressed interest in moving forward with a similar gas pipeline uniting their three countries, which could potentially complement the larger project.

''The powers of the north do not want this gas pipeline because they want the gas for themselves,'' Chavez said in a broadcast on Venezuelan state television from the meeting.

''They're desperate,'' he added.

Argentina, Brazil and Venezuela have already pledged initial investments to pay for engineering and environmental studies for a pipeline that would carry gas more than 7,000 km through South America.

Officials have said it could be ready in 2012, but the project faces significant challenges. Preliminary estimates put the cost at some 23 billion dollars and environmental groups worry the scheme would devastate parts of the Amazon rain forest.

ACCESS TO GAS Venezuela, the world's No. 5 oil exporter, has the largest gas reserves in South America. Argentina and Brazil are eager for access to cheap supplies beyond their own fields.

''We believe your incorporation into this project will make gas the backbone of the region's full integration,'' Chavez told his counterparts in Asuncion.

The second project involving the three smaller countries envisions building a connecting pipeline to carry gas from Bolivia to Uruguay and Paraguay. Business leaders in Bolivia had worried their country would be left out of the larger project, putting their gas in direct competition with Venezuela's.

Uruguayan President Tabare Vazquez said the three countries hoped to have a concrete answer on the project's feasibility by the end of the year.

Bolivia has South America's biggest natural gas reserves after Venezuela and the fate of the industry plays a major role in the nation's politics.

Bolivian President Evo Morales was elected in December on pledges to nationalize the gas industry and is a close ideological ally of Chavez, a critic of Washington who uses his country's oil wealth to promote Latin American integration.

Bolivia and landlocked Paraguay already have a plan to build a 500-km gas pipeline extension from the southern Bolivian city of Tarija to northern Paraguay. It is tentatively planned to be operating in two years.

''Extending this pipeline would allow us to connect with the Venezuelan-Southern Cone project,'' Paraguayan Deputy Energy Minister Hector Ruiz Diaz said earlier this week.

REUTERS SC PM0536