Eutelsat Secures High $2.5 Billion Insurance Package

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  Space News Business

Eutelsat Secures High $2.5 Billion Insurance Package

By PETER B. de SELDING
Space News Staff Writer
posted: 28 April 2008
11:30 am ET





Deal Covers 7 Launches, 2 Options, Including Long March

 

PARIS
– Satellite-fleet operator Eutelsat Communications has signed an insurance package valued at around $2.5 billion covering the launch of seven telecommunications satellites, plus two options, between 2008 and 2011. The policy gives Eutelsat the option of using China’s Long March rocket for one of the satellites, according to industry officials.

 

In what may be the biggest single space-insurance package ever signed – based on the dollar value - Eutelsat, of Paris, has retained the flexibility in the months leading up to a launch to mix different satellites with different launchers depending on the track record of each rocket.

But the total dollar value of the deal assembled by Eutelsat, the world’s third-largest commercial satellite-fleet operator in terms of annual revenue, and Willis Inspace, its insurance broker, will depend on which vehicle ultimately is selected for each satellite. What is guaranteed under the policy is the insurance rate for each of the possible vehicles, on the condition that the launches occur before 2012.

 

Eutelsat has seven satellites under construction. The launch-insurance policy covers all seven, and includes two options for satellites that Eutelsat might order in time for launch before the end-2011 deadline.

 

The approximate premium rates for each vehicle are as follows, officials said.

 

Ariane 5: 6.5 percent. Atlas 5: 6.6 percent. Sea Launch: 7.5 percent. Chinese Long March: 7.9 percent. Proton: 10.3 percent.

 

One official said the rate for the International Launch Services Proton vehicle, which has suffered three failures since 2006, will drop to around 8.5 percent if the rocket posts seven consecutive successes before the Eutelsat satellite is scheduled for launch.

 

The first four of the seven satellites in question are the Hot Bird 9, the W2M, the Hot Bird 10 and the W2A, all planned for launch on the Arianespace Ariane 5 rocket in 2008 and 2009. The other satellites are the W7, scheduled for liftoff by a Sea Launch Co. rocket; the W3B, to be orbited by a Chinese Long March vehicle; and Ka-Sat, to be launched by Sea Launch or Proton.

 

The insurance policy gives Eutelsat a broad flexibility in its choice of which rockets to use for which satellites, but there are limitations. The W2M satellite, under construction by the Indian Space Research Organization of Bangalore, India, using a payload provided Astrium Satellites of Europe, is too small to be economically placed aboard any rocket aside from the Ariane 5 for a launch late this year.

 

Europe
‘s heavy-lift Ariane 5 rocket is designed to carry two telecommunications satellites at a time into orbit. The other vehicles Eutelsat has selected are built to carry one large satellite at a time into geostationary orbit.

 

Another exception is the W3B satellite, under construction by Thales Alenia Space of
France
and
Italy
. While neither Eutelsat nor Thales Alenia Space disclosed it when the contract was announced in February, W3B will be an ITAR-free version of the manufacturer’s Spacebus 4000 satellite platform. Being ITAR-free means having no components subject to the U.S. International Traffic in Arms Regulations export regime. Most satellite parts are covered by this regulation, which currently makes it all but impossible to launch satellites with
U.S.
parts aboard Chinese rockets.

 

China
is accused of exporting missile technology. ITAR also applies to Indian rockets because of
India
‘s nuclear-weapon policy and its refusal to sign the Nuclear Non-Proliferation Treaty.

One industry official said the W3B contract with Thales Alenia Space will not result in a contract being signed by Eutelsat and one of the many entities that represent the China Aerospace Corp. Instead, if Eutelsat elects to use the Chinese rocket when the time comes to confirm a launch date, it will be up to Thales Alenia Space to negotiate the deal with the Chinese using one of the French-Italian company’s existing launch options with the Chinese Long March vehicle.

 

Thales Alenia Space spokeswoman Florence Pontieux said the company would have no comment on the W3B satellite. Eutelsat spokeswoman Frederique Gautier did not return calls asking for comment.

 

Industry officials said Thales Alenia Space remains uncomfortable talking about its ITAR-free product. While selling satellites to China breaks no U.S. law, it raises hackles in Washington and has sparked protests by Thales Alenia Space competitor Space Systems/Loral of Palo Alto, Calif., which says it gives the European company an advantage that is beyond the reach of Loral, as a U.S. company.

The ITAR-free product also has been criticized by the Arianespace launch consortium of Evry, France, which is concerned that, if they were allowed access to the global commercial launch market, less-expensive Chinese rockets would present a serious competitive threat.

 

But the biggest commercial satellite-fleet operators,
SES
of Luxembourg, Intelsat of Bermuda and Washington, and now Eutelsat, all have said the partial withdrawal of U.S. Atlas and Delta rockets from commercial activity has left the market with too few options. A Sea Launch failure in January 2007 forced several satellite owners to scramble to find replacement launch capacity.

 

SES
, Intelsat and Eutelsat all have said they would like the option of using China’s rocket. Eutelsat Chief Executive Giuliano Berretta said he regretted the absence of the Lockheed Martin Atlas 5 rocket in commercial competitions, which has meant that for most commercial telecommunications satellites there is no U.S. rocket bidding for the launch. Berretta said that for a company like Eutelsat, “Atlas rockets have become as rare as Patagonia butterflies.”

Comments: pdeselding@gmail.com