Italian shipbuilder Fincantieri is gearing up to develop the largest shipyard in Latin America in Mexico’s Yucatán peninsula.

The Trieste-based company signed a letter of intent for the project on Tuesday with the Yucatán Ministry of Economic Development.

The Puerto Progreso yard, which will cost up to $500m, will be financed and designed by Fincantieri in return for a 40-year “exclusive management” franchise on the yard, the company said in a statement.

Fincantieri said construction will be carried out by the government of Yucatán state, which will form a special purpose company to do it.

“Fincantieri is to provide advice from the very beginning,” the firm said, adding that it will build the yard’s “advanced facilities” with other partners.

The newspaper El Financiero reported that the Yucatán government will open a tendering process in early 2021 to find companies to work on the initial construction.

The facility will have two dry docks on a 40ha site, and will be able to handle ships up to 400m in length, with an emphasis on cruise ships, large cargo and oil and gas vessels, which need complex operations.

The yard will also have a lifting platform for units up to 150m in length, about a kilometre of docks, cranes, workshops, special equipment, offices and warehouses.

According to the letter of intent was signed on Tuesday by Ernesto Herrera Novelo, secretary of Economic Development and Labour for the state of Yucatán and Giorgio Rizzo, the director of Fincantieri’s services division.

According to the agreement, work on the yard will begin in the first half of next year with a view to starting operations in 2024, although the project is not expected to be finished entirely until 2027.

Fincantieri said it had chosen the Yucatán partly because the Gulf of Mexico is a region with “a strong concentration of oil and gas related operations, with offshore exploration, production and storage of oil and natural gas”.

Fincantieri, one of the world’s largest shipbuilders, also said it would be involved in the training of staff that will be employed at the facility.