COLORADO SPRINGS — Aerojet Rocketdyne says it’s committed to completing development of the AR1 rocket engine and is seeking potential partners for a new medium-class launch vehicle that could use the engine.

Aerojet Rocketdyne received an award from the U.S. Air Force in 2016 to support development of the AR1, one of the engines United Launch Alliance considered for use on its next-generation Vulcan rocket. The original value of the Air Force’s other transaction agreement, or OTA, was $804 million, with the Air Force providing two-thirds the funding and the rest coming from Aerojet and, to a lesser extent, ULA.

Aerojet renegotiated that agreement with the Air Force in June 2018, decreasing the total value of the award to $353.8 million with the Air Force now providing five-sixths the total cost. Aerojet has said in subsequent regulatory filings that its own contributions to the award are now complete.

ULA announced in September 2018 that it had selected Blue Origin’s BE-4 engine over the AR1 for Vulcan, a decision long anticipated by the space industry. Despite losing out on the Vulcan deal, Aerojet says it’s committed to completing development of the engine.

“We’ll have a test-ready engine in 2019,” Eileen Drake, president and chief executive of Aerojet Rocketdyne, said in a briefing with reporters here April 9 during the 35th Space Symposium. The revised agreement with the Air Force covers work to “design, build, and assemble a single AR1 engine prototype by December 2019,” according to the company’s Form 10-K filing with the U.S. Securities and Exchange Commission in February.

That work doesn’t explicitly include testing of the AR1, but Drake said the company was looking for ways to put that engine through a test program. “It’s still my goal to test that engine,” she said.

At the moment, though, there is no customer for the AR1, regardless of the outcome of any testing program for the engine. Another Aerojet executive, though, thinks there may be niche for a new launch vehicle powered by that engine along with the company’s RL10 upper-stage engine.

“An AR1-based booster, with an RL10 upper stage, is a very nice rocket,” said Jim Maser, senior vice president of the space business unit at the company. Maser joined Aerojet last August after a career that included leadership roles at Pratt and Whitney, Sea Launch and SpaceX. “I think it could fill the gap left by the retirement of Delta 2.”

Maser said the company is looking at what demand there would be for a medium-class vehicle like the Delta 2, given that the supply of launch vehicles is moving either towards very large vehicles or much smaller ones. “This would fit right in the middle. I think that’s a nice niche, but we really have to go talk to a lot of customers.”

Any such vehicle, he said, would be done in partnership with another company. “I personally don’t see us going off and developing a Delta 2-class launch vehicle, but I think if we find the right partner, who has the same vision we do, I think there’s something out there.”

One challenge to that effort is that, in the final years of the Delta 2, demand for the vehicle sharply declined. Both commercial and national security customers tended to go to larger launch vehicles, leaving behind a handful of NASA missions, many of which also shifted to vehicles like the Atlas 5 and Falcon 9.

Part of that lack of demand, Maser argued, was the high cost of the Delta 2. In 2012, NASA ordered three Delta 2 launches from ULA for a total cost, including payload processing or related services, of $412 million, or about $137 million each. That is close to the cost NASA currently pays for a typical launch of an entry-level Atlas 5 401 and significantly higher than the standard price for a Falcon 9 launch for NASA.

“That was not originally designed to be a super-low-cost rocket,” Maser said of the Delta 2. “I think a pure kerosene booster with a pure hydrogen upper stage and no strap-ons — a really simple rocket — could be very cost-effective.”

Neither Drake nor Maser gave any timetable for making a decision on the future of the AR1 or a partnership with another company for a vehicle to use it.