Argentine President Cristina Fernandez and Bolivian counterpart Evo Morales inaugurated a gas pipeline that will enable a sharp increase in Bolivian gas shipments to the Argentine market, where recent strong demand is threatening to outstrip supply.

The two leaders inaugurated the Juana Azurduy Integration Gas Pipeline, or GIJA, via teleconference during a ceremony at the presidential palace that was broadcast live on radio and television.

Fernandez said the project is of "strategic" importance to Argentina and will ensure the country's future economic growth.

Argentina and Bolivia agreed to build the 179-million-peso ($43.2-million) pipeline as part of a gas-export contract that was signed in 2006 and calls for steadily growing shipments of the fuel.

The pipeline stretches 48 kilometers (30 miles) from the Margarita gas field in Bolivia to the Refinor refinery in Campo Duran, Argentina, where it will link up in the future with the Gas Pipeline of Northeastern Argentina, known as GNEA.

The new gas pipeline, named for a heroine of South America's war of independence in the 19th century, will allow shipments of natural gas to rise to 7.7 million cubic meters (271 million cubic feet) per day through the beginning of 2012, when the amount of gas transported will rise to 10.4 million cmd.

The goal is for shipments of Bolivian gas to Argentina to eventually reach 27.7 million cmd.

Gas shipments will increase sharply once the GNEA - a 25.74-billion-peso ($6.22-billion) project still in the tender phase - comes online.

Morales said the GIJA will allow "two brotherly peoples to share their natural resources."

"I'm very pleased that in a short period of time we completed this gas pipeline to guarantee energy (supplies). Working together, thinking about our people at all times, we'll keep working," he said.

Fernandez, for her part, proposed a new agreement whereby Bolivia will sell additional gas supplies to its second-leading consumer (after Brazil) in exchange for shipments of liquefied petroleum gas from Argentina to Bolivia.

The Argentine president said her government is committed to boosting gas supplies at a time when industry and other large consumers are facing cuts and Argentina is reducing gas exports to ensure sufficient supplies to households.

She said Argentina consumes 144 million cmd of natural gas and that millions of dollars will be invested in gas-transport infrastructure to boost consumption to 170 million cmd.

"We're going to ensure Argentine growth in strategic terms for all industry, so everyone has the certainty that just as we're going to continue sustaining aggregate demand it will be necessary to keep sustaining production," Fernandez said.