Intelsat Signs Up for Satellite Refueling Service

WASHINGTON — Satellite fleet operator Intelsat’s agreement to be the anchor customer for MDA Corp.’s revolutionary satellite in-orbit refueling service brings the project much closer to realization but may be insufficient to permit MDA to begin full-scale development without a complementary government customer, Intelsat and MDA officials said March 15.

Luxembourg- and Washington-based Intelsat has agreed to purchase about half of the 2,000 kilograms of fuel to be carried on the inaugural flight of MDA’s Space Infrastructure Services (SIS) vehicle, which could occur in 2015. The most likely launcher will be a Russian Proton rocket, which can carry slightly more than 6,000 kilograms to geostationary transfer orbit. That would suggest that the MDA SIS robotic servicer, combined with a satellite platform to be built by ISS Reshetnev of Krasnoyarsk, Russia, could weigh close to 4,000 kilograms.

Intelsat officials said they want several of their satellites to be given enough fuel to extend the satellites’ lives by three to five years. Officials said a general rule of thumb is that it takes about 50 kilograms of fuel for each year of additional in-orbit life.

In separate briefings with investors and reporters March 15, Intelsat and MDA officials described the inaugural SIS mission this way:

å Intelsat will select one of its satellites nearing retirement to be moved into a standard graveyard orbit some 200 to 300 kilometers above the geostationary arc 36,000 kilometers over the equator. It is the most used orbital highway for telecommunications satellites.

å Richmond, British Columbia-based MDA will launch the SIS servicer, which will rendezvous and dock with the Intelsat satellite, attaching itself to the ring around the satellite’s apogee-boost motor.

å With ground teams governing the movements, the SIS robotic arm will reach through the nozzle of the apogee motor to find and unscrew the satellite’s fuel cap.

MDA Chief Executive Daniel E. Friedmann said in a conference call with investors that MDA has identified more than 40 different types of fueling systems and that the SIS will carry a toolkit designed to open most of them.

Steve Oldham, president of MDA’s newly formed Space Infrastructure Services division, told reporters here March 15 that SIS will be carrying enough tools to open 75 percent of the fueling systems aboard satellites now in geostationary orbit.

Oldham said each mission will last two or three weeks.

å The SIS vehicle will reclose the fuel cap after delivering the agreed amount of propellant and then head to its next mission.

Oldham said the SIS spacecraft is designed to operate for seven years in orbit but that it is likely to be able to operate far longer than that. Key to the business model is MDA’s ability to launch replacement fuel canisters that would be grappled by SIS and used to refuel dozens of satellites over a period of years. These canisters would be much lighter than the SIS vehicle and thus much less expensive to launch.

MDA officials in the past have said they would need to invest around 300 million Canadian dollars ($300 million) in SIS, a figure that includes construction, launch and insurance. Oldham said during MDA briefings to insurers over the past two years of SIS development suggest the mission could be insured for a premium of about 15 percent, which is not substantially more than what it costs to insure a standard telecommunications satellite. The SIS insurance package would include third-party liability.

Friedmann said the insurance package would include third-party liability to cover losses incurred by the customers’ satellites.

“It’s like when a 16-year-old gets a driver’s license,” Friedmann said. “You need insurance not only for your car, but also for somebody else’s car, in case you run into it.”

Third-party liability for the inaugural Intelsat mission may be less of a concern. Intelsat Chief Technical Officer Thierry Guillemin said that for the operator of the world’s largest fleet of commercial satellites — Intelsat has 52 in orbit — the SIS proposal poses very little risk, and a large opportunity.

“For this first demonstration mission, it will be one of our satellites that is at the end of its life and about to be decommissioned,” Guillemin said. “We have a certain number of options on which satellite it will be. The satellite will be taken out of [geostationary] orbit without consequence to our business, with the refueling done 200 to 300 kilometers above the geostationary belt.”

Guillemin said most satellites are retired simply because they run low on fuel. All their other systems are functioning well.

“Look at our Intelsat 6 series,” Guillemin said. “These are satellites that have been in orbit for 18 or 20 years and they are perfectly healthy. They still have their redundant units available, and the payloads are working well. For us, from the risk standpoint, there is only upside.”

MDA builds the space shuttle’s Canadarm and the Special Purpose Dexterous Manipulator for the international space station. Its robotics division has provided hardware for other satellite missions and produced spinoffs to perform medical surgery on Earth.

“On the technical side, we’ve worked for 10 years and done almost everything that needs to be done here [for SIS],” Friedmann said. “It has not been an orchestra, but we’ve played every instrument, and we’ve done a military mission remotely controlled from the ground.”

Friedmann said MDA will spend 50 million Canadian dollars per year for the next four years on SIS, money he said may be taken from the company’s expected operating cash flow without diluting MDA’s per-share earnings.

In addition to these funds, Friedmann said MDA is confident it can find project financing now that Intelsat has committed to paying more than $280 million for refueling services using the 1,000 kilograms on the inaugural flight. Canadian national and provincial funds also will be sought.

Perhaps more importantly, Intelsat General Corp., the Intelsat subsidiary that handles government business, has agreed to use its resources over the next six months to hunt for a U.S. government customer.

Intelsat General President Kay Sears said she was confident that numerous U.S. government agencies will be interested in SIS now that Intelsat and MDA have disclosed their plans.

Friedmann said MDA will commence the hardware construction phase of SIS in six months following Intelsat General’s search for a government customer. He said the market is potentially worth $200 million a year in revenue, but that this forecast assumes satellite operators are willing to change their way of thinking.

“It’s very difficult” to estimate future revenue, Friedmann said. “It reminds me of when IBM did the study of how many computers would be needed in the world, and the result was: three. That was a bit off.

“We are changing the world. You need to get people to switch the way they do business. But the fact that one of the top operators has decided to switch, and has bought a significant amount of our service, dramatically reduces the risk.”