SES and Gazprom Form Strategic Satellite Partnership

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PARIS — Satellite operators Gazprom Space Systems of Russia and SES of Luxembourg on Sept. 7 announced a strategic partnership that ultimately could seek to replicate a longstanding relationship between SES rival Eutelsat of Paris and Russia’s largest satellite operator, Russian Satellite Communications Co. (RSCC).

Industry officials said the agreement could provide SES with access to the Russian market, which has been a big gap in SES’s global footprint, and provide Gazprom with access to capital.

For the moment, the SES-Gazprom deal is limited to moving SES’s Astra 1F satellite, which for two years has sat virtually unused at 51 degrees east longitude, into Gazprom’s 55 degrees east orbital slot. Gazprom has leased 16 Ku-band transponders on the satellite, a lease that will continue until late 2012, when Gazprom’s own Yamal-402 spacecraft is ready for launch.

Once Yamal-402 is in service at 55 degrees east, SES will lease an undetermined number of transponders on it from Gazprom. Yamal-402, under construction by Thales Alenia Space of France and Italy, is scheduled for launch in late 2012. It was unclear whether SES will be leasing Yamal-402 capacity for Russian coverage, or for Middle East or East European coverage from the satellite’s steerable beam.

Astra 1F was launched in April 1996 and was the first Western commercial telecommunications satellite to be launched aboard a Russian rocket. It was also the first launch by International Launch Services, the U.S.-based company that markets Russia’s Proton rocket launches worldwide outside of Russia and is now owned by Khrunichev of Moscow, Proton’s prime contractor.

Astra 1F is a Boeing 601 satellite frame that, despite its age, still has sufficient fuel to operate in three-axis-stabilized orbit well beyond 2012, SES spokesman Yves Feltes said Sept. 7. Astra 1F was operated at SES’s core 19.2 degrees east orbital slot until mid-2009, when it was replaced by a new spacecraft and moved to 51 degrees east. It has gone largely unused since then as SES weighed what to do with it.

Once Yamal-402 is in service, SES will move Astra 1F to another orbital position, Feltes said. “The satellite is doing very well and there is lots of fuel left,” he said.

Gazprom Space Systems, owned by Russia’s giant Gazprom energy producer, operates two small satellites in orbit. In addition to Yamal-402, the company has a Yamal-401 spacecraft on order, with payload electronics to be provided by Thales Alenia Space and a platform by Russia’s ISS Reshetnev satellite builder of Krasnoyarsk, Russia.

Construction of Yamal-401 and Yamal-402 have been financed with the backing of France’s Coface export-credit agency. Gazprom initially had planned launches aboard European Ariane 5 rockets as part of a larger Coface-backed contract, but eventually scrapped that idea in favor of launches aboard two Russian Proton rockets. ILS said the contract was a standard commercial transaction and was negotiated in dollars. It was the first contract ILS signed with a Russian satellite operator. Other Russian telecommunications satellite launches aboard Proton rockets have been negotiated with Proton builder Khrunichev of Moscow.

Financing was an issue with both the satellites. Gazprom has announced ambitious growth plans in Russia, and SES’s deep pockets could permit the company to meet its objectives sooner. Gazprom reported satellite transponder lease revenue of $72.2 million in 2010.

Eutelsat and RSCC have been collaborating for more than a decade, notably with the joint use of 36 degrees east. RSCC, which operates a fleet of 11 satellites and is also in the midst of a major expansion, is about three times the size of Gazprom when measured by revenue. RSCC is also a longstanding Eutelsat shareholder.

RSCC is using Eutelsat financing to build a new satellite for 36 degrees east, to be launched in 2015. The two fleet operators are also cooperating in the commercialization in Russia of Eutelsat’s new Ka-Sat Ka-band spacecraft.

RSCC’s near-term expansion plans were dealt a setback Aug. 18 when a Proton rocket dropped the large Express-AM4 satellite into a bad orbit. RSCC has abandoned efforts to salvage the satellite, which was insured for about $300 million.

SES Chief Executive Romain Bausch said the partnership with Gazprom is likely to expand in 2013 with the launch of SES’s Astra 5B satellite, to be stationed at 31.5 degrees east. “With Gazprom, we have found an excellent partner to tap into this highly important growth market,” Bausch said in a Sept. 7 statement.

Gazprom Space Systems General Director Dmitry Sevastiyanov said the arrival of Astra 1F “is good news for the Russian market.”

In a Sept. 7 statement, he said: “The additional satellite arrives at a time of high demand and scarce capacity, and brings us in a position to meet the actual and growing capacity needs of our customers. The cooperation with SES is very productive and we may see additional joint projects in the future.”