August 14, 2012 / 11:37 PM / 7 years ago

Lockheed sees more Middle East missile-defense demand

WASHINGTON (Reuters) - Saudi Arabia and its closest regional partners have shown interest in buying the most advanced Lockheed Martin Corp (LMT.N) missile-defense system to counter perceived threats, executives of the Pentagon’s top supplier said on Tuesday.

“Look, all of the (Gulf Cooperation Council) nations have an interest,” Dennis Cavin, a company vice president for army and missile-defense programs, told a teleconference.

The GCC is a political and economic alliance linking Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain and Oman.

Lockheed, the Pentagon’s No. 1 supplier by sales, received an initial $1.96 billion contract in December for two of its Terminal High-Altitude Area Defense (THAAD) weapon systems for the United Arab Emirates.

This marked the first foreign sale of the system, coming as tensions with Iran have risen over its disputed nuclear program. Such foreign sales are increasingly important to U.S. arms makers as the Pentagon’s budget flattens because of U.S. deficit-reduction requirements.

The United States has been working with Gulf regional states on a bilateral basis, not as a group, to boost the range of radar coverage and related capabilities across the Gulf for the earliest possible defense against any missiles that Iran might fire.

“It’s not us sitting down with the GCC. It’s not us sitting down with NATO,” said a U.S. military official who spoke on condition of anonymity because he was not authorized to discuss the matter. “It’s us working out agreements with individual countries.”

The Wall Street Journal reported last month that the United States is putting a high-powered Raytheon Co (RTN.N) AN/TPY-2 X-Band radar station in Qatar, an add-on to similar existing arrays, one in Israel’s Negev Desert and one in Turkey. Together, the three radar sites form an arc that can detect missile launches from northern, western and southern Iran, the paper quoted officials as saying.

U.S. PUSH

THAAD is a U.S. Army system designed to shoot down short-, medium- and intermediate-range ballistic missiles with an interceptor that slams into its target. It can accept cues from Lockheed’s Aegis weapons system, satellites and other external sensors and work in tandem with the PATRIOT Advanced Capability-3 terminal air-defense missile. THAAD includes its own radar along with interceptors and communications and fire control units.

Fueling the interest in THAAD, Cavin said, was a U.S. military push to stitch together an integrated air and missile defense architecture across the region as well as what he called a recognition by GCC states that “they need the best capability they can get against the threat set that’s there.”

Mat Joyce, Lockheed’s vice president for THAAD, said it was premature to discuss specific potential buyers “but as they notify the U.S. government officially of their interest we’ll be happy to provide that information to you.”

Cavin and Joyce spoke from Huntsville, Alabama, during a space and missile-defense conference. THAAD is part of a layered missile shield being built to defend the United States and its friends and allies against ballistic missiles of all ranges and in all phases of flight. The system is being optimized against Iran and North Korea.

A major U.S.-led effort is under way to protect NATO’s European territory against ballistic missiles that could be fired by Iran, for instance, in retaliation for any preemptive strike against Iranian nuclear facilities. Iran is suspected by many of secretly developing atomic arms, although it insists that its program is dedicated entirely to peaceful power generation.

Lockheed describes THAAD as the only system with the flexibility to intercept targets both inside and outside the earth’s atmosphere.

Other leading missile-defense contractors include Boeing Co (BA.N), Raytheon and Northrop Grumman Corp (NOC.N).

President Barack Obama’s administration notified Congress last month of a possible sale to Kuwait of 60 PATRIOT PAC-3 missiles and associated gear in a deal worth up to $4.2 billion.

Such a sale would help deter regional threats, among other things, the Pentagon’s Defense Security Cooperation Agency said in the notice to lawmakers.

Reporting by Jim Wolf; Editing by Gary Hill and Phil Berlowitz

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