The plasma rifle upgrade is in the docks (area 6), in the second portion.

When you get to the area where you can first see the blue barrels falling, head as far right as you can go, drop off the edge and grapple a few clicks in, then drop straight down.
Enter the door and activate the two switches and enter the LEFTMOST door on the right side (the one that was closed).
Entering the other door takes you back out.