Abu Dhabi Polymers Co., or Borouge, a joint venture between Abu Dhabi National Oil Co. and Vienna-based Borealis, Monday said it launched a study into the feasibility of a third expansion of its petrochemicals complex in the U.A.E.'s largest emirate.

The feasibility study will determine whether to implement phase three, also known as Borouge 3, to add as much as 2.5 million tons a year of polyolefin capacity at its site at Ruwais in the west of Abu Dhabi emirate by 2014, the company said in an emailed statement.

The study for Borouge 3 will "explore options to take advantage of additional feedstock becoming available from planned upstream Adnoc expansions," the company said.

Borouge's plans for the $5 billion second phase expansion at the site, which will more than double output to 2 million tons a year of polyethylene and polypropylene, are on track for completion in 2010, the company said.

The proposed phase-three expansion would boost Borouge's total production capacity to 4.5 million tons a year and target markets in Asia and the Middle East, according to the statement.

Phase three would involve building a unit for the production of low density polyethylene, or LDPE, which is used to make high performance material for wire and cable applications, Borouge said.

Borouge last year awarded a $300-million contract to Samsung Engineering Co. (028050.SE) to build an olefins conversion unit as part of its phase-two expansion plans, known as Borouge 2.

As part of Borouge 2, the company last year also signed a contract worth $1.86 billion with Italy's Tecnimont S.p.A. for the construction of three polyolefins units and a $1.23 billion contract with Spain's Tecnicas Reunidas S.A. (TRE.MC) to build offsite and utility facilities.

In 2006, Borouge awarded a $1.3 billion contract to a group led by Germany's Linde AG (LIN.XE) to build a plant that will convert ethane into ethylene, a natural gas derivative needed to make polyethylene and polypropylene.

Local and international companies are investing in petrochemical projects in Persian Gulf countries to benefit from cheap natural gas, which is commonly used to make chemical products, and buoyant international markets, particularly in Asia.

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