Reliance Industries [Get Quote], the Mukesh Ambani-run petrochemical to energy company, plans to invest over $2.5 billion to set up India's largest fertilizer plant. Reliance has applied to the fertiliser ministry for permission to set up a 4 million tons-a-year fertilizer plant at either Kakinada in Andhra Pradesh or Jamnagar in Gujarat, a company executive said.

The fertiliser plant would use natural gas from the company's prolific gas field off in Krishna Godavari basin off the Andhra coast as feedstock.

Gas from the KG-D6 block is to land at Kakinada and the company is laying a 1,400-km pipeline to Gujarat border for transporting the fuel. Reliance has faced opposition from fertilizer and power sector to the price it has proposed for the gas from KG-D6.

The company plans to take the challenge face-on by becoming a player itself. India is a net importer of fertilizer, buying about 5 million tons of the commodity every year from overseas.

"We are confident of setting up a world-class facility at prices never thought off," the executive said. Reliance had proved its project management skills when it set up the nation's largest oil refinery at Jamnagar at almost half the cost incurred by the public sector in similar projects.

Currently, it is building an export-oriented 29 million tons refinery adjacent to the existing one for less than $6 billion whereas a 9 million tons refinery at Bhatinda by state-run HPCL [Get Quote] will cost Rs 18,919 crore ($4.7 billion).