DALIAN, Aug. 23 (Xinhua) -- Construction of the world's largest deep-water oil drilling vessel has started in northeast China's Liaoning Province.

Under a contract signed with Germany's Deutsche Verkehrs-Bank (DVB), COSCO Dalian Shipyard Co. Ltd. is building the "Dalian Pioneer" in Dalian City.

"The vessel will cost more than 500 million U.S. dollars and will be the first deep-water drilling vessel built by China," said Wang Xingru, general manager of COSCO Dalian.

Construction, which started Sunday, is expected to be completed in 2012, he said.

With a hull size of 290 meters by 50 meters, the vessel is designed to hold up to one million barrels of crude oil.

The vessel will drill oil wells in international oilfields with a high level of efficiency and safety.

The vessel will work in waters of up to 10,000 feet in depth and can drill to depths of over 30,000 feet.