By Andrea Shalal
COLORADO SPRINGS, Colo. (Reuters) - A joint venture of Lockheed Martin Corp (NYSE:LMT) and Boeing Co on Wednesday said uncertainty over its use of Russian rocket engines for Air Force satellite launches could undermine its plans to build a new rocket with a U.S. engine.
Tory Bruno, president of the United Launch Alliance joint venture, told Reuters that Lockheed and Boeing could halt investment in the new rocket unless ULA gets permission to use 29 already ordered Russian engines for Air Force launches.
The company has pegged its future to the new Vulcan rocket, which it hopes to use for commercial and government launches. It was not immediately clear what would happen to the firm if it was unable to complete the new rocket.
Bruno said the company's board last week approved investment in Vulcan through the end of the year but would not consider further funding until the issue of the Russian RD-180 engines that power its Atlas 5 rocket was resolved.
Legislation passed by the U.S. Congress last year barred ULA from using engines for national security launches purchased after Russia's annexation of Ukraine's Crimea.
ULA signed a 29-engine contract with Russia's Energomash before then, but Pentagon lawyers have determined that those engines cannot be used under the current law.
Air Force officials have urged Congress to change the law. Bruno said the Air Force is also pursuing a waiver from the Pentagon that would allow the engines' use.
Bruno said lawmakers did not intend to halt use of the rockets already ordered by the company, and they had not expected the legal determination later made by Pentagon lawyers.
Barring a change, Bruno said ULA would be unable to compete for some Air Force orders that comprise a large part of the company's business between 2019 and when the new rocket is certified to launch government satellites around 2022 or 2023.
The Air Force expects to certify a new competitor, privately held Space Exploration Technologies, to compete to launch some U.S. military and intelligence satellites by June.
ULA is halting use of most of its Delta 4 rockets, which have a U.S.-built engine, because they are too costly to produce and would not be competitive, Bruno said.
He said the company could have up to five RD-180 engines available for use after 2019, but it was unclear if the company could afford to stockpile engines valued at $125 million.