By Jim Wolf
WASHINGTON (Reuters) - The United Arab Emirates has trimmed what had been billed as a possible $7 billion purchase of an advanced U.S. missile defense system but there are no major obstacles to its completion, Lockheed Martin Corp's lead executive on the deal said Wednesday.
UAE officials have identified some elements of the Terminal High Altitude Area Defense "that they think they can do without right now," Dennis Cavin, a Lockheed vice president for missile defense programs, told Reuters.
The system would be designed to defend against ballistic missiles that could be fired by Iran, which is at odds with the West over its nuclear program.
Iran has test-fired missiles that it says are capable of hitting its arch foe, Israel, and U.S. bases in the Middle East.
The UAE would be the first overseas buyer of THAAD, the only system in any countries' arsenal said to be capable of thwarting short- and intermediate-range ballistic missiles both inside and outside the Earth's atmosphere. Raytheon Co builds its radar.
Cavin said he now expected the UAE to sign a deal with the U.S. government for THAAD, as the Lockheed-built system is known, within a few months, later than he had previously projected.
"They have made some adjustments," he told Reuters after updating reporters on the company's missile defense programs along with three other Lockheed executives.
He declined to spell out the scope of the scaleback but said that "they haven't cut in half the number of systems they're buying."
The contract will be worth less than the roughly $7 billion potential value cited in a formal notification to the U.S. Congress sent in September 2008, Cavin said. That notice said the UAE had requested three THAAD "fire units" with 147 THAAD missiles, four THAAD radar sets, six communications systems, nine launchers and related gear.
Cavin in a February 20 interview with Reuters during an arms bazaar in Abu Dhabi, had predicted that a government-to-government deal for the system would be completed last spring.
He told reporters Wednesday it was taking longer "but there has been no major hitch" in the negotiations with the UAE involving the U.S. government and an industry team.
"We're making progress," he said. A spokesman for the UAE embassy in Washington could not be reached immediately for comment.
The UAE's purchase is expected to clear the way for a THAAD sale to Saudi Arabia, said Riki Ellison, who heads the Missile Defense Advocacy Alliance, a nonpartisan booster group.
Such overseas sales are making missile-defense systems more affordable for the United States, Cavin said.
Exports of Lockheed's Patriot PAC-3 missiles, for instance, had reduced their costs to U.S. taxpayers by $482 million, or about 11 percent of the $4.2 billion spent on PAC-3 production since 2006, Craig Vanbebber, a Lockheed spokesman, said in an email to Reuters amplifying on Cavin's remarks.
(Reporting by Jim Wolf; Editing by )