The company plans to provide a range of infrastructure developments within the 50,000-square-metre area - representing 40% of the lettable area at Dampier - to support the Gorgon project and expects to start upgrade work in the early part of the 2009 financial year.

"The signing of the agreement highlights the strategic benefit of the Dampier Supply Base and is a significant step for MMA as the company continues to develop a world-class multi-user facility to support the Australian offshore oil and gas industry," managing director Jeffrey Weber said.

"Chevron has been a valuable client in our marine business for over five years and we are very excited by the prospect of having Chevron on our supply base as a major client to support their Gorgon Development."

Mermaid said that while it is still finalising the scope of the upgrade work, it will include the provision of laydown areas, quarantine facilities, landing ramp extensions, offices and various other minor works on the subleased areas.

Preliminary estimates put the cost of the overall development at around $20 million.

Mermaid's board has also approved a $22 million extension to its wharf facility.

Construction of the wharf expansion is expected to start at the beginning of the 2009 financial year, with targeted completion by April 2009.

Mermaid has also completed an institutional placement of shares to raise $36.3 million to fund the expansion and support its future growth plans.

The placement of 20 million new shares was priced at $1.45 per share, or about 16.8% of existing issued capital.

Merrill Lynch acted as lead manager and underwriter to the placement, which will be settled in two tranches, the second - of 6.15 million shares - is subject to shareholder approval.