(Adds test details and comments on program outlook in final paragraphs)
By Andrea Shalal-Esa
WASHINGTON, May 28 (Reuters) - The United Arab Emirates has requested the purchase of a new U.S. missile defense system developed by Lockheed Martin Corp (LMT.N), a deal that could be worth $7 billion, if approved, two sources familiar with the discussions told Reuters on Wednesday.
Col. Bill Lamb, who manages the U.S. Missile Defense Agency’s Terminal High Altitude Area Defense (THAAD) program, confirmed that an unidentified country had requested a sale of the sophisticated system and that the Pentagon was discussing it with lawmakers.
Lamb, who said the deal would be worth “close to” $7 billion, declined to identify the buyer or give other details.
Two sources familiar with the request, who asked not to be named, identified the potential buyer as the UAE. One said the deal could be formally announced in June or July.
Once the Pentagon’s Defense Security Cooperation Agency notifies Congress about the proposed sale, lawmakers have 30 days to object, although such action is rare.
“As far as I know, everyone who’s looked at it thinks it’s a good idea,” said one of the sources.
This same source noted that the defensive nature of the weapon system made it more palatable to U.S. lawmakers than the sale of satellite-guided munitions to Saudi Arabia, which had provoked some criticism.
The Pentagon has spent $11 billion over the past 17 years to develop the new missile defense weapon, which is designed to defend troops, population centers and critical facilities against short- to medium-range ballistic missiles of a type that could be fired by Iran or North Korea.
The U.S. Army on Wednesday activated its first THAAD battery, which includes three launchers, 24 interceptors, a fire control system, and a special radar, at Fort Bliss, Texas, a key step toward fielding the new weapons system in 2010.
THAAD, a planned layer in an emerging multibillion-dollar U.S. missile defense system, is the only anti-missile weapon designed to knock out targets both inside the atmosphere and in space.
Observers from the UAE, Israel and Australia observed a test of the THAAD system last year.
Lockheed lauded the successful activation of the first THAAD battery in a statement, but declined comment on any foreign military sales. Raytheon Co (RTN.N) is a key subcontractor on the program.
Israel had expressed interest in the program, but Lockheed officials told Reuters last year they did not expect any near-term orders.
For now, Israel remains committed to the Arrow anti-missile program it is developing, U.S. defense officials said.
THAAD has successfully intercepted targets in all four recent tests, program officials said. Lamb said another flight test was planned in June.
“The program is in very good shape,” Lamb said on a conference call with reporters. “We’ve demonstrated a very good performance in tests, it enjoys strong congressional support, and is highly requested by combatant commanders,” he said.
Lamb said mounting concern about the proliferation of short- and medium-range ballistic missiles would underpin the program’s future, even if the overall missile defense program was targeted for budget cuts.
(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)
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