Australia shipyard
Australia Launches First Air Warfare Destroyer Built In South Australia. Reuters

Engineering and construction contractor Civmec on Friday said it would collaborate with Australian ship building firm Austal in the A$4 billion offshore patrol vessel program.

The program will help support Australian government's initiative to create a "national sovereign defence industry" underpinning hundreds of new jobs.

The federal government has announced that German shipbuilder Luerssen will be the prime contractor for the 12 new ships, with the first two vessels to be constructed by ASC in Adelaide, and the remaining 10 to be built by both Austal and Civmec in Western Australia.

Construction is scheduled to begin in Western Australia in 2020 and is expected
to create hundreds of jobs at its Henderson facilities, the company said in a statement.

The project would employ up to 1000 workers - 400 direct and a further 600 in the supply chain.

Civmec said it will update the market on the financial details of the project after the commercial negotiations with Luerssen conclude.

Shares in Singapore-listed Civmec rose 0.9 percent to S$0.55. The stock has jumped 70 percent in an year.