The huge project, which will see a $3.5bn cash outlay from Saudi Arabia's government, comes at a time of global yard overcapacity, declining orderbooks and a glut of newbuildings.
The yard is expected to cost $5.2bn to build with the Saudi government funding $3.5bn and the joint venture the remaining $1.7bn.
The 4.3 sq km yard at Ras Al-Khair will comprise four main production zones and is scheduled for partial operation in 2019 and full operation in 2022. HHI will be the technical partner for Zones C and D for the construction and repair of offshore support vessels and the building of commercial vessels. Lamprell will be the technical partner for zones A and D for the repair of jack-up rigs and commercial vessels and the building of jack-up rigs.
Bahri will agree to purchase not less than 75% of its vessel requirements over the next 10 years for 52 newbuilds including VLCCs.