Industries Qatar, the Gulf's second-largest petrochemicals firm, is considering expanding production to take advantage of excess feedstock left by a project's cancellation, the company said.

On Wednesday, state firm Qatar Petroleum and Shell said they had decided not to proceed with the $6.4 billion Al-Karaana petrochemical project in the Gulf state, deeming it "commercially unfeasible" given weaker oil prices.

Industries Qatar said in a statement that it was conducting feasibility studies to "take advantage of the ethane feedstock available following the decision not to proceed with the proposed Al-Karaana Petrochemical Project".

The company said it would conduct the studies in collaboration with Qatar Petroleum, Qatar Chemical Co and Ras Laffan Olefins Cracker Co.

The studies would aim to "develop and expand the number of petrochemical plants with beneficial returns for these companies, and to the petrochemical sector in general,“ Industries Qatar said.

The company's board recommended a 2014 dividend of QR7 ($1.9) per share on Sunday, down from the SR11 paid in 2013 and below analysts' average forecast of QR11.13.

The divided cut reflected difficult operating conditions for petrochemicals firms in the Gulf. Plunging crude oil prices have dragged down product prices and eroded the margins which Gulf producers traditionally generated from subsidised feedstock. - Reuters