LA PAZ – President Evo Morales’ government on Wednesday created a company to promote and develop projects to process the Andean nation’s massive reserves of natural gas.

In a press conference, Hydrocarbons and Energy Minister Oscar Coca said the goal of the new company, Empresa Boliviana de Industrializacion de Hidrocarburos, will be to “re-launch” the natural gas-industrialization process, adding that “the efforts made up to now have been insufficient.”

In April, the Morales administration described the development of gas-industrialization projects as a “national priority” and instructed state owned

Yacimientos Petroliferos Fiscales Bolivianos to create the new enterprise “in a maximum of 60 days.”

Nevertheless, Coca said the steps taken to industrialize Bolivian gas “have proceeded at a pace that is unsatisfactory for the government,” and therefore a decision was made to create the firm via a new decree.

The new company, which will begin operations in January 2010, will have an initial budget of 28 million bolivianos ($3.9 million), though it seems likely it will eventually share in the $1 billion Bolivia’s treasury lent to YPFB in September, as some of that money was earmarked for gas-industrialization efforts.

“Bolivia has set itself the challenge that nationalization is not enough; the second step is industrialization,” Coca said.

He added that the company will be 100 percent state-owned, although it will need partners to contribute capital and technology for specific projects.

The government announced in June that it plans to invest $80 million this year to build a petrochemical plant to produce fertilizers in the central province of Cochabamba as part of the gas-industrialization effort.

Two other industrialization projects – involving the installation of plants to separate liquid components from the gas – have been postponed until 2011 and 2012 due to corruption scandals affecting YPFB and delays in several studies.

Bolivia has an estimated 48 trillion cubic feet of natural gas, giving it the second-largest reserves in South America after Venezuela.

But Morales says Bolivia needs to progress beyond exporting natural gas to creating value-added products.

“Industrialization will ensure that Bolivia is no longer one of the most underdeveloped countries in the hemisphere and that it can lift itself up by its own hands. It’s a wholesome, honorable and noble mission,” the president said earlier this year. EFE