By Geoff Fein

While Lockheed Martin [LMT] and the U.S. Navy continue to modernize the Aegis combat systems on Arleigh Burke-class destroyers and the ballistic missile defense capability of other surface combatants, the company is seeking international opportunities to expand its market for Aegis.

One potential sale could be Saudi Arabia, as it looks to modernize its eastern fleet, Fred Moosally, president of Lockheed Martin Maritime Systems and Sensors, told reporters at a company briefing in Arlington, Va., earlier this week.

Not only would Lockheed Martin bid its Aegis combat system, but it is looking at the possibility of putting Aegis onto its Littoral Combat Ship (LCS), Moosally added. ‘We have an international LCS design.”

Lockheed Martin, along with naval architects Gibbs and Cox, completed a study for the Israeli Navy that looked at a surface platform that would provide the service a robust anti-air warfare capability, Moosally said.

“That included the SPY-1F radar…VLS (Vertical Launch System),” he said. “Hopefully, we’ll be able to offer that to Saudi Arabia when they decide what their program will be to replace their eastern fleet.

Moosally said Lockheed Martin has talked with Saudi Arabia about a LCS with an Aegis system on it.

What Lockheed Martin is offering is a variant of LCS with the SPY-1F Aegis configuration, similar to the Norwegian frigate, which does not have the U.S. Navy’s Aegis BMD capability, a Lockheed Martin spokeswoman said.

The Saudi Arabia buy could be for as many as 12 ships, worth in excess of $1 billion, Moosally added.

“We think there is a real possibility. We think we have a robust international design that is putting an Aegis-type combat system on LCS,” he said.

As for the Israeli study, Moosally told reporters: “We are basically on hold from any further work in that area.”

“They decided they didn’t want to pursue that right now,” he added. “They are looking at other alternatives to meet their ship needs.”

Moosally told reporters that aside from the efforts with the company’s Aegis combat system, Lockheed Martin has also installed the latest iteration of its Aegis Ballistic Missile Defense (BMD) capability, which includes a new signal processor.

Aegis BMD 4.0.1 was installed on the USS Lake Erie (CG-70). The new ballistic missile defense signal processor, named Aegis BSP, will improve the system’s ability to detect, track and target complex ballistic missiles and their associated countermeasures, according to Lockheed Martin.

Over the next year, the Lake Erie will complete a series of tests, leading up to full certification of the system upgrade by the Navy in early 2011, Moosally said.

Unlike with its Aegis combat system, finding new foreign markets for Aegis BMD is a bit tougher, he noted.

Right now, only Japan is fielding the system, Moosally said.

“Japan is looking at more of them. We haven’t finalized the program there yet,” he said.

When South Korea bought Aegis, what they were looking at was not a theater missile defense capability, but a terminal defense capability, Moosally said.

“The issue we had just before they deiced to buy the Aegis system…[was that] the U.S.. Navy terminated the Block IVA missile, the terminal missile being developed for the Navy,” he said. “The Koreans decided that’s what they wanted…a terminal missile to go with the Aegis system.”

Raytheon‘s [RTN] Standard Missile-2 Block IVA was killed when the Pentagon ended the Navy’s area theater ballistic missile defense (TBMD) program earlier this decade (Defense Daily, Jan. 18, 2002).

“If the Navy does develop a missile with that capability, then, I think, the Koreans would be interested in procuring it,” Moosally added. “That also could be, in our view, a marinized PAC-3 missile.”