UPDATED Sept. 18 at 12:43 a.m. EDT

WASHINGTON — U.S. government launch services provider United Launch Alliance will pay Blue Origin, the secretive rocket-making venture led by Amazon.com founder Jeff Bezos, an unspecified sum to complete development of a new engine to replace the Russian-made RD-180 that powers the first stage of ULA’s Atlas 5 rocket, the companies announced Sept. 17.

Blue Origin of Kent, Washington, has been developing the BE-4 engine for three years, thus giving it a head start against other prospective RD-180 replacements, ULA Chief Executive Tory Bruno said at a press conference here. Fueled by liquefied natural gas, the new engine will be relatively inexpensive to develop and build, and could be ready to start flying in four years, he said.

Bruno said developing a new main engine typically takes seven to 10 years and costs around $1 billion.

Because liquefied natural gas is less dense than the kerosene fuel that powers the RD-180, a BE-4-powered rocket will require larger fuel tanks than those used on the Atlas 5. That means ULA likely would have to make substantial design changes to accommodate the Blue Origin engine and modify the plumbing of one of its launch pads to handle liquefied natural gas.

“We are currently in the middle of our studies on exactly what the vehicle configuration will be that uses this new propulsion technology,” Bruno said, adding that he hopes this work to be completed before the end of the year. The new vehicle would incorporate upper-stage elements of the Atlas 5 as well as ULA’s other workhorse, the liquid-hydrogen-fueled Delta 4.

Bruno said the new engine has the potential to substantially reduce launch costs, but declined to be specific. The savings, he said, will be passed on to ULA’s customers, primarily the U.S. government.

Bezos said during the press conference that the BE-4, which will generate about 550,000 pounds of thrust, is based on the BE-3 that powers Blue Origin’s New Shepard, an experimental suborbital rocket that takes off and lands vertically. In addition to the Atlas 5 successor, the new engine would be used for a future reusable orbital launcher Blue Origin plans to develop, he said.

Two BE-4 engines generating a combined 1.1 million pounds of thrust at sea level would power the new rocket’s first stage, Bruno said. The current Atlas 5 first stage is powered by a single RD-180 generating close to 1 million pounds of thrust.

Neither Bezos nor Bruno would quantify ULA’s investment but both described it as significant.

The future availability of the RD-180 has been in question since early this year, when Russia’s annexation of Crimea led to Western sanctions that in turn prompted Russian officials to threaten a ban on exports of the engine for U.S. military use. Although RD-180 deliveries have continued, officials with ULA and its primary customer have been developing contingency plans in case of a cutoff.

The Atlas 5 and Delta 4 are used to launch most U.S. government satellites, including virtually all national security missions. The Atlas 5 also will launch Boeing Space Exploration’s CST-100, one of two NASA-funded capsules that will be used to ferry crews to and from the international space station starting as early as 2017.

Blue Origin is a partner on the CST-100, Bezos said, declining to provide specifics.

In June, ULA announced that it had signed contracts with multiple unspecified companies to study alternatives to the RD-180. The company, a Boeing-Lockheed Martin joint venture, declined to identify any of the contract recipients but said a first launch of the new engine was targeted for 2019.

Bruno said the BE-4 came out as the winner in that competition.

Among the other study contract recipients was Aerojet Rocketdyne, which has been touting a liquid-oxygen/kerosene-fueled engine dubbed the AR-1 as an RD-180 replacement. Officials with Aerojet Rocketdyne, the largest and most experienced U.S. manufacturer of liquid-fueled rocket engines, say the AR-1 will be capable of generating 500,000 pounds of thrust and could be ready to fly by 2019 for an investment of less than $1 billion.

The ULA-Blue Origin announcement would appear to cast a cloud over Aerojet Rocketdyne’s AR-1 plans.

Aerojet Rocketdyne spokesman Glenn Mahone said the company remains committed to meeting the future propulsion needs of the nation.

“To demonstrate this commitment, Aerojet Rocketdyne announced Sept. 16 the establishment of our advanced hydrocarbon propulsion development office in Huntsville, Alabama,” Mahone said. “Rapid development and certification of Aerojet’s AR-1 and all U.S. designed, developed and produced advanced hydrocarbon engines manufactured to power America’s current and future national security launch vehicles is a key focus of the new Huntsville office.

“The AR-1 will provide both our government and commercial customers an affordable, world-class innovative engine as well as the reliability which is synonymous with Aerojet Rocketdyne propulsion systems.”

Congress has proposed spending as much as $220 million next year to begin work on a new U.S. engine, although the prospect that the funding will win final approval is uncertain at best. Bruno and Bezos said that should the U.S. government choose to help fund development of the BE-4, such assistance would be welcome.

Bruno said ULA’s decision to invest in a new engine was driven in part by the uncertainty surrounding the RD-180 but more by what he sees as a need for a modern, U.S.-built rocket main engine.

The BE-4 will be designed and built entirely in the United States using the latest techniques, including advanced computerized simulation and additive manufacturing, Bezos said. The result will be a reliable, high-performance engine that is developed quickly and at a relatively low cost, he said.

“I think it’s pretty clear it’s time for a 21st century booster engine,” Bezos said. “The great engines of the past were truly remarkable machines in their own right … but we have tools and capabilities — software simulations, computational horsepower — that the builders of those great engines could have only dreamed about.”

The reason for Blue Origin’s choice of liquefied natural gas over kerosene as the engine’s propellant was driven by cost and reusability considerations, Bezos said. Liquefied natural gas, which is similar to methane, is cheaper than rocket-grade kerosene and leaves less burn residue, making the engine easier to refurbish and reuse, he said.

Warren Ferster is the Editor-in-Chief of SpaceNews and is responsible for all the news and editorial coverage in the weekly newspaper, the spacenews.com Web site and variety of specialty publications such as show dailies. He manages a staff of seven reporters...