International Partnerships in the Commercial Space Launch Industry

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International Partnerships in the Commercial Space Launch Industry THIRD QUARTER 2001 QUARTERLY LAUNCH REPORT 8 International Partnerships in the Commercial Space Launch Industry INTRODUCTION other or makes a contribution toward a common effort in an attempt to improve International partnerships are hardly a the economic condition of all entities new concept in space activities: national involved. Partnerships, as discussed governments and space agencies have herein, are not simply payments of been collaborating since the early years money for purchase or lease of goods or of the Space Age on projects such as services, even as stipulated within a scientific satellites and human space launch services contract. They also flight missions. National space agencies exclude mergers and acquisitions of recognized that cooperation across companies and international launch trade borders presented challenges but agreements. afforded them the opportunity to achieve common goals and complete ambitious All of the partnerships considered herein projects by sharing costs, risk, have launch activity as a central focus, infrastructure, and expertise. involve at least one purely commercial entity, and encompass players from at While governments undertook the least two different nations.1 This report earliest international collaboration also addresses only partnerships that projects in space, today increasing have actually been enacted; agreements numbers of international partnerships under discussion are not covered here. involve one or more commercial players This report does not attempt to address and focus on the business of space every launch-related partnership that has transportation. Indeed, like other ever existed. modern, technology-based businesses, private launch-related companies operate As the next sections show, international in the global economy and have come to partnerships in the launch business have recognize the advantages of forging proliferated in recent years. Involving strategic alliances, regardless of the combinations of launch vehicle and partner’s location in the world. component manufacturers, launch service marketers, spaceport developers, This report explores the range of launch- satellite operators, and governments, related international partnerships today’s launch-related alliances have involving private companies that exists been formed, most fundamentally, to today in an effort to understand the improve the local and global business nature of these partnerships, the reasons prospects of those involved. These for their emergence, and the impact they partnerships fall into three major may have on the launch industry as well as the customers they serve. In this 1 This report does not describe or analyze intra- report, the term “partnership” refers to a European launch-related consortia such as contract between at least two entities in Arianespace or the European Aeronautic Defense which each entity offers a product, and Space Company (EADS) because, from the European perspective, these are enterprises of a service, or capability of value to the single, solidified Europe. THIRD QUARTER 2001 QUARTERLY LAUNCH REPORT 9 categories of launch interest: technology, while Rocket Space Corporation (RSC) marketing, and customer relations. Energia owns 25 percent; the Anglo- Technology partnerships encompass Norwegian Kvaerner Group, 20 percent; relationships formed to produce or and SDO Yuzhnoye/POYuzhmash, 15 assemble launch vehicles and their percent. components as well as launch equipment and facilities. Marketing partnerships Sea Launch offers satellite customers are relationships designed to expand the heavy-lift launch services (up to 5,700 reach of various launch vehicles to kilograms to geosynchronous transfer global markets. Provider/customer orbit [GTO]), with launches taking place partnerships involve the teaming of from a platform positioned on the launch service providers with companies equator in the Pacific Ocean. Instead of who use their launch services in various using the proposed Energia M vehicle, efforts to bring mutual benefits to Sea Launch uses the Zenit 3SL—a themselves and their customers. While model of the Ukrainian Zenit launch some partnerships span more than one vehicle developed for Sea Launch. category, the enterprises discussed here Launching from the equator enables the are listed according to their primary Zenit to travel the most direct route activities. possible to GTO and thus maximize the payload mass it can carry there. TECHNOLOGY PARTNERSHIPS All partners in Sea Launch provide hardware and services to make the Sea Launch Company enterprise a reality. SDO Yuzhnoye/PO Yuzhmash provide the first and second Founded in 1995, the Sea Launch stages of the Zenit 3SL vehicle as well Company is the result of a meeting of as launch support operations. RSC minds and resources of companies from Energia produces the vehicle’s upper four nations. During the early 1990s, the stage (the Block DM-SL), integrates the Russian company NPO Energia met with vehicle, and conducts mission the Boeing Commercial Space Company operations. The Boeing Commercial to discuss Russian design ideas for a sea- Space Company manufactures the based space launch system. The launch- payload fairing and performs spacecraft at-sea concept Energia proposed integration and mission operations. The involved the use of Energia M, a launch Kvaerner Group provides and operates vehicle design the company desired to the launch platform and assembly and promote; Boeing, for its part, had not command ship. yet acquired McDonnell Douglas and the Delta launch vehicle but was interested The first privately financed, working in entering the launch business. launch system and infrastructure, Sea Recognizing the many advantages such a Launch has completed six successful system could offer in the launch market, launches and has sold 19 launches to Energia and Boeing, along with SDO date. Yuzhnoye of Ukraine and Kvaerner of Norway, signed an agreement to form the joint venture Sea Launch. Today, Boeing owns 40 percent of Sea Launch, THIRD QUARTER 2001 QUARTERLY LAUNCH REPORT 10 Aerojet/Kuznetsov constructed, paying $4 million per engine. In addition, the Japanese space Sacramento-based Aerojet and the agency NASDA granted Aerojet a Russian design bureau Kuznetsov contract in March 2001 to design an formed an alliance in 1996 to produce engine based on the NK-33 for its new and sell liquid oxygen/kerosene NK-33 J1-U launch vehicle. engines in the United States. An improved version of the engine designed RD AMROSS by Kuznetsov for use in Russia’s N1 lunar rocket program, the NK-33 itself In 1997, Florida-based Pratt & Whitney actually never flew due to the N1 and NPO Energomash of Russia program’s cancellation in 1974. established the RD AMROSS LLC joint However, several hundred NK-33s were venture to produce the Russian RD-180 manufactured and 70 NK-33s remained engine for the American market. Having stored in Russia. partnered to sell other engine models, Pratt & Whitney and Energomash came When the U.S. Air Force announced the together again to attempt to meet Evolved Expendable Launch Vehicle Lockheed Martin’s need for a new (EELV) program, Aerojet recognized an engine for its Atlas 3 and 5 vehicles with opportunity to be a major supplier of the RD-180 engine, then under engines for the new vehicle: if it could development. Lockheed Martin selected secure the rights to NK-33, it could take the RD-180 as the first stage engine for advantage of the engine’s desirable its new Atlas models. Government features without expending resources policy, however, required that Lockheed and time developing a new product. Martin demonstrate the ability to Kuznetsov, on the other hand, could sell manufacture RD-180s in the United the warehoused NK-33s while States in order to avoid dependence on potentially reopening a production line Russia to launch national security that otherwise had no future. Under the payloads. Therefore, under the RD agreement Aerojet and Kuznetsov AMROSS partnership, Energomash will reached, Kuznetsov is supplying the produce 101 RD-180 engines for the engine’s design and engineering Atlas 3 and commercial launches on expertise while Aerojet is providing a Atlas 5 at its Khimky plant in Russia, manufacturing facility and has purchased while Pratt & Whitney will build some 70 NK-33s. Aerojet has also acquired two dozen more RD-180s in Florida to intellectual property data and holds launch government payloads. Pratt & rights to build NK-33s in the United Whitney also contributed $25 million to States after the existing supply runs out. Energomash for upgrades at the Khimky plant. The two companies are 50-50 While NK-33 engines were not selected partners in the joint venture. for use in the EELV program, Seattle- based Kistler Aerospace Corporation has Production of RD-180 in the United taken interest in using NK-33s in its K-1 States was expected to begin in 2005, reusable launch vehicle. Kistler has but technology control issues and negotiated with Aerojet for exclusive changes in Lockheed Martin’s rights for 58 of the 70 total NK-33s production plans have pushed back the THIRD QUARTER 2001 QUARTERLY LAUNCH REPORT 11 start of domestic production to 2008 at approval processes related to the project the earliest. are facilitated in a timely manner. The government also plans to support the Asia Pacific Space Centre effort by upgrading Christmas Island’s airport, constructing a new port and The most recent of a series of Australian road, and aiding the development of spaceport development concepts, the spaceport infrastructure. Australian and Australian-based Asia Pacific Space Russian officials signed a cooperative Centre’s (APSC) plan is to establish a pact in May allowing Russian rockets to spaceport on Christmas Island, Australia, be launched from the Christmas Island and develop a commercial space launch site as well as from Woomera Rocket service using Russia’s new Aurora Range in central Australia. launch vehicle design. A private company with investors in Australia, APSC’s Christmas Island office is South Korea, and the United States, responsible for design and construction APSC intends to market the vehicle of the spaceport, while a U.S.
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