Peru hopes the gas project will boost economic growth

Mr Toledo travelled deep into the Amazonian jungle to open the pipeline linking the vast Camisea gas field to the capital, Lima.

The government says the project will boost economic growth and make Peru a net exporter of energy.

But environmental groups say it is ruining the Amazon rainforest.

The opening of the $1.6bn Camisea pipeline comes 20 years after the gas reserves were first discovered.

Peru's biggest gas project is likely to change the fortune of cash-poor, but resource-rich Peru, says the BBC's Hannah Hennessy in Lima.

President Toledo travelled to the project's gas processing plant at Malvinas in the province of La Convencion, in Cuzco department.

There, he gave the order for the valve to be opened to allow the gas to travel from Camisea down the 731km (462-mile) pipeline to Lima.

The gas will be for industrial and residential use, reducing energy costs for businesses almost immediately and providing cheaper, cleaner energy for thousands of ordinary Peruvian within a couple of years.

A second pipeline will transport liquefied natural gas to Peru's Pacific coast, from where it is likely to be exported from 2007.

'Tribes at risk'

As he inaugurated the project, President Toledo said Camisea would bring billions of dollars in revenue to Peru.

He said it would add one percentage point to Peru's economic figures for the next 40 years, and exports would add an additional percentage point for 18 years.

But critics say the economic benefits will come at the expense of the environment.

They have accused the developers of causing irreversible damage to one of the most bio-diverse regions in the world and destroying the lives of isolated tribes that live in the jungle by bringing in disease, cutting down trees and contaminating their food supplies.