Dec 18, 2009 (LBO) - Sri Lanka is planning a space project with a British firm in a 150 million US dollar deal that could see a satellite launched into a geo-stationary orbit above the island in 30-months, an official said.

"There is commercial interest for a communications satellite but there has to be a project for others to participate," Sri Lanka’s telecom regulator Priyantha Kariyapperuma said.

"The cabinet of ministers has already approved a proposal to start a space agency and we want to build up capacity."

In November the Telecommunications Regulatory Authority signed a deal with Surrey Satellite Technologies Limited (SSTL) of UK to get know how and eventually launch a satellite.

Kariyapperuma says the program, which involves small satellites, may cost about 150 million US dollars.

"We want to sell capacity in the satellite ahead of the launch, because there is demand," he said.

"We also maintain friendly relations with other South Asian states so we will be able to serve all of them."