The cargo and passenger train, which runs along the world's highest railway - at 4,900 meters above sea level in Peru's central Andes - will switch from diesel to run on two engines designed by General Electric, said Juan de Dios Olaechea, president of the Ferrocarril Central Andino.

``With this technological development, Peru is taking a big step forward in terms of its energy independence,'' De Dios Olaechea said at an inauguration ceremony.

Ferrocarril Central Andino, 82 percent owned by Peruvian capital and 18 percent owned by US-based Rail Road Development, has operated the train since 1999 between Lima and the central Huancayo region.

Taking advantage of the Andean nation's huge Camisea gas reserves, the company plans to convert all eight engines in its fleet to CNG from diesel in the next seven months.

Natural gas is cleaner-burning and less expensive than gasoline, while its relatively stable price makes it attractive at a time when world oil prices hover at record highs.

Although liquefied natural gas is used in some trains worldwide, it is more volatile and must be kept at very low temperatures, making its application more limited for transport.