US co XpressSAR to buy Israel Aerospace surveillance satellites

TecSar satellite Photo: IAI

XpressSAR has signed a memorandum of understanding to buy three radar-based TecSAR satellites, with an option for a fourth.

Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1) and US company XpressSAR have signed a memorandum of understanding (MOU) whereby the US company will buy from IAI three advanced radar-based surveillance satellites that work in tandem. The crisis in IAI's satellite business made headlines for the past two years, following the explosion of the Amos 6 satellite shortly before takeoff, and the subsequent selection by Spacecom of a US company to build its future satellite.

The radar-based TecSAR satellites in the current deal make it possible to gather intelligence at any hour of the day, including in cloudy weather and sandstorms, which make intelligence gathering using optical spy satellites difficult.

The deal is believed to amount to hundreds of millions of dollars. It includes an option for the supply of a fourth satellite for adding to the constellation of satellites that XpressSAR plans to operate.

Under the MOU signed early this week in the US, IAI will manufacture the satellites in its space plant in Yehud and provide the US company with support services for launching them, putting them into their predetermined orbit, the ground stations at which the output will be received, and more, until they are fully operational.

The satellites which weigh 370 kilograms each, will be launched simultaneously into space and operate in a fixed orbit around the earth, thereby ensuring continuous frequent coverage of the areas in which the operating company is interested.

Now that the MOU has been signed, XpressSAR will raise capital to finance the satellite purchases and put the deal with IAI into effect. IAI told "Globes" today that when the deal with XpressSAR is implemented, it will become a company providing imaging services based on synthetic aperture radar (SAR) technology, which facilitates reception of high-resolution output for government and commercial customers throughout the world.

XpressSAR, founded in 2013, has conducted prolonged proceedings for an agreement with a company to manufacture satellites through which it can provide its services. It first contracted with a European company, then later retracted this decision and chose to negotiate with IAI, leading to the signing of the new MOU. "We went through a long process of surveying different solutions offered in the market, and we are glad to cooperate with IAI, which offers a complete intelligence system using SAR satellites," XpressSAR CEO Wolfgang Biedermann said today. "The advanced proven technological capabilities of these satellites will enable us to provide our future customers with the best-quality intelligence products."

SAR technology is regarded as the cutting edge of spy satellites. In contrast to optical spy satellites, which provide photographs, satellites utilizing SAR technology identify objects that optical satellites have trouble identifying, such as metal objects and objects obstructed by clouds, dust storms, darkness, etc. SAR satellites can provide observation of any point of interest at all hours of the day or night. "These capabilities are very interesting to organizations and agencies operating in the intelligence field. They include the ability to detect changes in ground contours and the arrival of vehicles at a given point, and they do all of this automatically," says IAI space division general manager Opher Doron.

According to Doron, simultaneous operation of a constellation of three or four observation satellites, as planned by XpressSAR, will facilitate closer and more frequent coverage of an area of interest to the company's customers.

IAI's TecSAR satellites are significantly smaller than other observation satellites in this category, giving them the ability to provide output quickly, due among other things to their great maneuverability in space.

IAI missiles and space group general manager and EVP Boaz Levy today expressed satisfaction with the MOU with the US company, saying that it expresses recognition of the company's technological capabilities and the innovation and enterprise of XpressSAR in providing services in this area.

Neither company commented on the timetable for raising the capital needed to finance the new satellites plan; it is still unknown where the satellites will be launched. At the same time, three satellites are to be launched into space together. They will be located at different points in the sky and operate in tandem, so that they will pass over multiple targets and points of interest within short timespans.

IAI previously manufactured TecSAR satellites for the defense establishment in Israel, and launched the Ofek 8, its first satellite of this type, into space in 2008. The Ofek 10 satellite, launched into space from the Palmachim base, is also based on this technology.

Trek between satellites

The Amos 6 exploded in early September 2016, shortly before its scheduled launch at the SpaceX site in the US. The Amos 6 was a communications satellite produced for Spacecom.

The explosion in the US highlighted the severe crisis in the communications satellite industry. A special committee headed by the Ministry of Science, Technology, and Space director general was appointed, and the Ministry of Finance and the Ministry of Communications held feverish discussions in an attempt to preserve communications satellite capabilities in Israel, following threats by IAI to close down its business in this sphere.

Meanwhile, Spacecom tried to contract an agreement with a US company to produce its future communications satellite, but a model was recently formulated in which the state and Spacecom will jointly finance the purchase of a communications satellite from IAI, even though it will cost more than a satellite produced overseas.

While the communications satellite industry in Israel is fighting for its life, IAI's business in spy satellites designed for defense purposes is booming. IAI refused to reveal how many satellites are being developed or produced now in its space plant, but sources say there are quite a few. These are optical satellites and radar satellites in the development and production stages.

In contrast to a communications satellite, which is stationed at a permanent place in the sky at an altitude of 36,000 kilometers and facilitates broadcast transmissions, spy satellites rotate around the earth at an altitude of 500-500 kilometers in a geostationary band.

The average price of such a surveillance satellite is $180-200 million. The price of a communications satellite, such as the Amos 6, was $240 million.

Published by Globes, Israel business news - en.globes.co.il - on November 20, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

TecSar satellite Photo: IAI
TecSar satellite Photo: IAI
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018