OA Orbital Atk, Inc. (delisted)

Orbital ATK Inc. is moving to create a business out of a concept science fiction fans have enthused over for decades: launching robotic space tugs to extend the life of geriatric satellites circling the Earth.

The Virginia-based aerospace company is close to signing a pioneering contract with Intelsat SA to use such an automated spacecraft to grapple and move large telecommunication satellites that have depleted fuel reserves, keeping them flying while also bringing in revenue for a few extra years, according to industry officials.

The tug is designed to use its own propulsion system to maintain an operational altitude of more than 20,000 miles, then disconnect and move on to rescue several other ailing satellites during a projected 15-year mission

Expected to be announced perhaps as early as next month, these officials said, the deal would cap a lengthy, uphill struggle to turn in-orbit satellite servicing—once a far-fetched idea championed by space geeks—into commercial reality. Despite years of delays, misgivings by investment bankers and ambivalence from most satellite operators, Orbital ATK has now committed tens of millions of dollars to build what it calls its first Mission Extension Vehicle.

Last minute problems could still delay or block a final agreement, according to industry officials familiar with the details. But negotiations are far enough advanced for officials of both companies to consider details of where and when an announcement will come.

The plan is to conduct a full-blown test of the technology in space by late 2018 and begin operations a few months later, said Tom Wilson, vice president of strategy and business development at Orbital ATK. If successful, the initiative could "change the way we manufacture satellites, and how we operate satellites," he said in an interview. "I think the market is ready for it, finally."

With dozens of big telecommunications satellites running low on fuel each year, Mr. Wilson said the company plans to build and launch four additional, more-advanced tugs by 2020. In addition to repositioning satellites, the aim is to eventually fuel or repair ailing craft with robotic technology.

Such features, among other things, would permit satellites to be blasted into space with minimum fuel on board—saving substantial weight and cost—and then they could be refueled during a rendezvous with a service spacecraft. The ultimate concept is to be able to swap out modular payloads to upgrade, repurpose or even fix failing satellites as they zoom through space. "We're working on all that technology," Mr. Wilson said.

Boeing Co., Lockheed Martin Corp. and Canada's MacDonald Dettweiler and Associates Ltd. have all expended resources in this area. A number of U.S. government agencies, including the Pentagon's primary research arm and the National Aeronautics and Space Administration, also have provided seed money and encouraged development.

In-orbit refueling is an essential for deep-space exploration. The military has long been interested in perfecting technology for satellites to dock in space, or replace outdated sensors on spacecraft.

But for now, Orbital ATK appears to have the inside track for commercial applications. Details of the Intelsat contract are expected to be wrapped up by the spring, according to industry officials, and other satellite operators have expressed interest in the service.

David Thompson, the company's chief executive, recently told analysts that in-orbit servicing is one of the company's top three capital investment priorities over the next three years.

Write to Andy Pasztor at andy.pasztor@wsj.com

(END) Dow Jones Newswires

March 08, 2016 09:25 ET (14:25 GMT)

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