It would produce 3 million tonnes of petrochemicals a year, including polymers and fertilizers, the consortium's vice president, Luis Marin, said in a presentation to lawmakers.

According to Marin, the pipeline and a new set of docks that would handle 2,400 vessels a year would help the products reach markets in Asia and the West Coast of the United States, as well as the Caribbean.

The project hopes to take advantage of the shortfall in U.S. refining capacity and high oil prices to turn Panama into a major center for energy distribution, Marin added.

Companies including Britain's BP Plc. , French companies Total S.A. and Suez Brazil's Petrobras , Bechtel Corporation and investment bank UBS AG have shown interest, an Energias spokesman said.

Earlier this year Panama signed an agreement with U.S. energy giant Occidental Petroleum Corp. to develop a $7 billion oil refinery near Panama's border with Costa Rica.

But senior legislator Tomas Altamirano said Panama was concerned about how the project might affect the 50-mile (80-km) interoceanic waterway and Panama's rainforests, which protect the canal's natural water supplies.

"It is $1 billion (of initial investment) that the company wants to in this country and they are talking about $40 billion over 20 years ... but we are not going to put in danger the workings of the canal," said Altamirano.
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