Calcutta, Oct. 2: Matix Fertiliser will start commercial production at its urea plant in Panagarh, Burdwan in two weeks, kicking off operations in the largest industrial project during the Trinamul Congress-rule.

The 1.3-million-tonne capacity unit will start with 35-40 per cent of rated capacity before gradually scaling up to 70-80 per cent by the end of 2017, when the supply of coal bed methane gas - the main feedstock of the plant - from the nearby Ranigunj field goes up, P.R. Dhariwal, managing director of the company, said this evening.

"We are in the process of commissioning the plant. Production will start later this month. Capacity utilisation will depend on the availability of gas. As of now we are getting 1.1 mmscmd of gas," Dhariwal said.

The unit, promoted by the Kanodia family of Datamatics, requires 2.2 mmscmd gas as feedstock as well as fuel. However, it has the option to use other fuels such as naphtha if enough gas is not available. If the unit does not use CBM as fuel at all, the daily requirement will be 1.7 mmscmd.

Kanodia, who is related to the Ruia family, promoters of Essar Group, had come up with a proposal to set up the unit in Bengal in 2009. Subsequently, it secured land from the erstwhile Left government to start work on the Rs 5,000-crore venture.

However, because of the paucity of gas from the CBM field of Essar, the plant could not start commercial operations despite being ready, leading to cost escalation.

So far, investment in the venture stands at Rs 7,000 crore, making it the largest industrial project during the six-year tenure of the Mamata Banerjee-government.

Once fully functional, the business could clock an annual turnover of nearly Rs 2,500-3,000 crore. It plans to produce fertilisers other than urea at a later date.

Matix plans to tap Bengal and the neighbouring eastern and north eastern states to sell urea. It has set up a 30-kilometre dedicated pipeline to bring gas from Essar's Ranigunj field. The landed cost of CBM, a form of natural gas but with low calorific value, will be $5 per mmbtu according to the Union government's administered price, which is set half yearly. The unit also has a 54 megawatt captive power plant to operate the urea unit.