Two South Australian companies will make steel cruise ship blocks for an Italian shipbuilding giant in the running for the Australian Navy frigates contract.
MG Engineering, based in Adelaide, will construct two blocks and the third will be produced by Whyalla-based Ottoway Engineering.
They were selected for the work by Fincantieri, one of three international companies tendering for the SEA 5000 Future Frigate program.
Sean Costello, Fincantieri's Australian director, said the block-building work was a "test order" and will sound out the local industry.
"We get to find out who are the good suppliers out there that can help us and we get to find out what it truly costs to do the work in Australia," he told AAP.
"So it's about getting into the market."
Each of the three blocks will be just under the size of a tennis court, and together will use 52 tonnes of Australian steel.
The blocks will be completed by June 30, when federal cabinet's national security committee is expected to make a decision on the $35 billion frigate contract.
South Australian Industry Minister David Pisoni said shipbuilding was a critical industry for the state.
"It's also important to note that Italian shipbuilders Fincantieri is demonstrating their confidence in South Australian shipbuilders to carry out this work as part of their global supply chain," Mr Pisoni said.
