Navantia has been contracted by the Australian Government to construct two replacement replenishment ships, as part of efforts to avoid a critical capability gap in future.
The new auxiliary oiler replenishment ships are set to replace Australia's existing supply ship HMAS Success, which will reach its end of life in 2021.
The ships will be based on the Spanish Navy ship Cantabria design and will be customised to meet specific Australian standards and requirements.
Under the $640m contract with Navantia, local industries will be engaged to support combat and communication systems integration, integrated logistics support, and elements of the on-board cranes.
Of the total contract value, more than $130m is projected to go to the Australian industry.
Work on an initial $250m five-year sustainment contract, which is also signed with Navantia, will be undertaken in Australia.
As part of $40bn Naval Shipbuilding Plan, the Australian Government has recently announced the construction sites of 12 offshore patrol vessels (OPV), and up to 21 pacific patrol boats, in addition to nine previously announced Future Frigates.
French shipyard DCNS has been selected to build a new fleet of 12 submarines in Adelaide, while Austal will construct 21 steel-hulled pacific patrol boats in Henderson.
The construction of the OPVs and the Future Frigate is scheduled to begin in 2018 and 2020, respectively, in Adelaide.
The programmes are expected to secure more than 3,600 jobs in the Australian shipbuilding industry, and thousands more across the supply chain.