A shipyard was located at Seaton Sluice Harbour from around 1768 until the 1800s. It was located on the Sandy Island side of the harbour.

It was developed by Lord Delaval to cater for the roaring bottle trade which operated from the settlement, only a few years after the harbour was opened. The yard was small, but up to 40 vessels, primarily bottle sloops, were constructed for Delaval's fleet alone.

The first vessel to be built here was the George, and just a few weeks later the Thomas. A year later, a sloop named Hartley was launched and fully rigged in 14 days. The yard was leased to a Mr Anthony Topham, who was already a master boat builder around this time, who was in charge until at least 1792. His name is mentioned in an advertisement in the Newcastle Chronicle of 08/03/1783. The yard at "Hartley Pans" was selling 160 tons of good oak wood fit for shipbuilding. It notes he was intending to "decline business", implying he was to stop operating at the yard.

By 1792, a Mr Wright took over the yard for around 4 years. From thereon the history of the yard fades, though some records show a Mr Manchester took over the yard from 1804 and lived at the site of the Kings Arms.

Most ships constructed here were bottle sloops, which were suited to the bottle trade and could be taken under the arches of the London Bridge on their monthly trip down the East Coast. It required the mast to be lowered to allow this.

There is no evidence of the shipyard today.