Hong Kong Satellite Technology Group (HKSTG) has awarded Israel Aircraft Industries a contract believed to be worth $180 million to build two communications satellites with an option for five more.

The satellites, which will be used to support coverage of the 2008 Olympic Games in Beijing, will be launched by China Great Wall Industry Long March boosters from 2004.

The satellites will be based on an uprated high power Amos communications satellite. Each craft will be equipped with 20 Ku-band transponders and will operate with 5.5kW of power.

The deal is thought to be in compensation to China for Israel's suspension of a contract, after US pressure, for the Israeli Phalcon early-warning system in July 2000. China has demanded $2 billion in compensation for Israel's failure to fulfil the contract.

The satellite deal, however, will have to overcome likely US pressure and there are doubts that European component companies, such as Astrium and Alcatel, will be awarded export licences.

Source: Flight International