Alba owns the world's fourth largest aluminium smelter and is planning to add 400kt/yr capacity with a sixth potline, bringing its total annual capacity to 1.28Mt/yr.
A feasibility study will start at the end of this year with an expected completion date of 2015.
Alba's last expansion project was in 2005 when a fifth potline was added, costing US$1.7 billion.
Bahrain Mumtalakat Holding Co, the country's sovereign wealth fund, owns a 69.4% share in Alba and is reportedly planning to invest in new aluminium plants.
Other GCC smelters planning expansion includes Emal, which is investing US$4.5% to grow capacity to 1.4Mt by 2014.
Ma'aden, which is investing US$10.8 billion in a joint venture with Alcoa that includes a 750kt smelter scheduled for completed next year.
The price per ton of aluminium has dropped 33% from US$2,803 per ton in May 2011 to US$1,865 today.