The National Space Development Agency of Japan (NASDA) and Ishikawajima-Harima Heavy Industries Co. (IHI) on Wednesday told government panel of plans to develop a small commercial rocket, government officials said – dubbed GX.

According to the plan present to the Space Activities Commission, the first stage of the rocket would be built under contract by Lockheed Martin Corp. of the United States, and the second stage would use a new natural gas engine being developed by NASDA.

The GX will be 43 meters long, 3.3 meters in diameter, and possess about one-third the liftoff capacity of the Japan’s main luncher the H-2A.

It will be able to put a 3-ton satellite into orbit at an altitude of 200 kilometers, and will cost less to launch than comparable rockets in the U.S. and Europe, the officials said.

Galaxy Express, which was formed in March and funded by IHI, will attempt the first GX rocket launch in 2006, the officials said.

The inititive comes as the Space Activities Commission prepared to report this June on the priorities for the launch of domestically produced rockets, which will also address the role of the GX rocket and determine the logistics of financing its launch.