BAE Sees Interest for Type 26 Frigate in Canada, Australia, Germany

By Robert Wall

LONDON--Canada, Australia, and Germany are among potential markets for BAE Systems PLC's (BA.LN) new Type 26 frigate, as the defense company presses ahead with the first supplier contracts to start building the ships for Britain's Royal Navy.

"We are active in the international market," Geoff Searle, BAE Systems Type 26 program director told reporters in London on Wednesday.

Decisions on whether those countries would buy the BAE Systems design may be more than a year away, with the three countries still early in their equipment-decision processes, Mr. Searle said. BAE would provide the design information, though the warships would be built by shipyards in those countries.

Production for the U.K. of the Type 26 frigate--called the Global Combat Ship--is due to start late next year in Glasgow, Scotland, Mr. Searle said. The ship should enter service in early 2020. The Type 26 is principally intended as a submarine-hunting ship, though it could also conduct other roles.

The company on Wednesday announced over 170 million pounds ($265 million) in contracts for the first three Type 26 vessels under a GBP859 million demonstration phase that began earlier this year. The contracts include ship engines from Rolls-Royce Holdings PLC (RR.LN) and electronic equipment from Raytheon Co. (RTN)

The British government still has to award the production contract for its ships, which will require the defense ministry and BAE to agree pricing. Current development efforts are trying to finalize ships costs, Mr. Searle said, though there was "a clear intent" to begin the production phase in April.

The ship, which will replace the Type 23 frigate, is 149 meters in length and displaces 6,000 metric tons, has a range of about 7,000 nautical miles. It can accommodate helicopters and would be equipped with a medium-caliber gun and be able to fire cruise missiles against land targets.

Australia, Canada and Germany are all interested in an anti-submarine warfare design, Mr. Searle said, though other countries have shown interest in a more multi-mission-focused version.

The Australian government this week announced a A$20 billion ($14.7 billion) program of nine frigates, to be built three years earlier than forecast, and 20 offshore combat ships.

BAE Systems is assessing the impact of Canberra's plan on any potential impact to its footprint in Australia. The company's has been looking for greater clarity on Australia's shipbuilding program as it decides the future of its Williamstown shipbuilding facility near Melbourne. The site faces a gap in work.

BAE Systems Australia Acting Chief Executive, Glynn Phillips, said, "the company is keen to receive more details about the Government's plans for the procurement and production of the Future Frigates and Offshore Patrol Vessels."

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