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Oil giant Royal Dutch Shell is considering building a brand new plant in Louisiana that will convert natural gas into diesel and jet fuel, the governor's office announced Tuesday.

The facility is estimated to cost at least $12.5 billion and, if built, will be located south of Baton Rouge. According to the Wall Street Journal, the state of Louisiana has offered Shell an incentive of about $112 million by providing infrastructure improvements and land acquisition. Plans for road improvements worth $32 million have already been prepared by the Louisiana transportation department.

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Although the site location has been selected, Shell explained that the final decision on whether to invest in the project would not be taken for a few more years. However, the company will now be able to start various engineering studies and to begin the permitting procedures, Shell's executive vice president Jorge Santos Silva explained in a statement.

If the company eventually decides to move ahead with the project, the plant can be expected to resemble the Pearl gas-to-liquids project in Qatar in size and capacity. The facility there has a daily capacity of 260,000 barrels of liquid fuels, the Wall Street Journal reported.

The plant would add to Shell's efforts to ramp up the use of domestically produced natural gas and to further decrease the use of oil in making fuels and other liquids.