Construction work has begun on a joint venture to build a shipyard on Saudi Arabia's eastern coast, UAE-based offshore contractor Lamprell has said in a statement.

The joint venture, International Maritime Industries (IMI), started operations after reaching a a loan agreement with the state-backed Saudi Industrial Development Fund (SIDF), the statement said.

The SIDF agreed in principle last year to provide SR3.75bn ($1bn) in financing for the project.

IMI is a partnership between Saudi Aramco, Lamprell, National Shipping Company of Saudi Arabia (Bahri) and South Korea's Hyundai Heavy Industries.

An Aramco executive will be chief executive of the project, which Aramco has previously said will cost more than SR20bn ($5.3bn).

Lamprell's anticipated total equity contribution over the construction period is up to $140m, the statement said.

IMI is based out of the Ras al-Khair industrial complex, and will provide one of the world’s largest maritime integrated service complexes, with completion expected by 2022.

The nearly 12 million square-metre facility is planned to have an annual capacity to manufacture four offshore rigs and over 40 vessels, including three Very Large Crude Carriers (VLCCs), and service over 260 maritime products.