WASHINGTON, Sept 24 (Reuters) – NASA has chosen the aerospace startup Katalyst to help prevent a $500 million space observatory from plummeting into Earth’s atmosphere. The plan is to launch a special spacecraft that will nudge the observatory into a higher, more stable orbit. This urgent mission will also serve as a test of new satellite-docking technology, a capability central to ongoing technological competition in space between the United States and China.

In an announcement on Wednesday, NASA revealed it granted Arizona-based Katalyst Space Technologies $30 million for this mission. The company will use an adapted version of its “Link” spacecraft to assist NASA’s Neil Gehrels Swift Observatory, a satellite launched in 2004 that orbits Earth and has been observing distant cosmic phenomena such as black holes and galaxies.

On-orbit spacecraft maneuvering and docking are becoming important for both military assets and maintenance of satellites in general. These technologies have been accelerating in part due to increasing rivalry between the U.S. and China, particularly as both nations aim to return astronauts to the Moon and develop alliances with international space partners.

The Swift Observatory is positioned around 364 miles (585 kilometers) above Earth, where its orbit is slowly deteriorating due to atmospheric drag. The spacecraft, commonly known as SWIFT, has significantly contributed to breakthrough findings in astronomy, but it is now a practical example for testing in-space servicing capabilities.

With no onboard engines to raise its orbit and lacking standard features for docking, SWIFT is at risk of falling back into Earth’s atmosphere. NASA predicts there’s a 90% likelihood that the observatory will burn up by the end of 2026 without intervention.

“This satellite was never built for maintenance or docking,” explained Katalyst CEO Ghonhee Lee. He noted that the mission will demonstrate the ability to service any satellite, even those not equipped with standard interface rings like modern spacecraft.

For this mission, Katalyst plans to adapt a spacecraft originally meant for internal demonstration purposes. The redesign process will begin next month, with a targeted launch scheduled for May 2026.

One of the main difficulties for the emerging satellite servicing market is developing secure docking systems that work with older satellites like SWIFT, which weren’t designed with in-space maintenance in mind.

Lee shared that his team has thoroughly analyzed SWIFT’s engineering diagrams. The Link spacecraft will be equipped with a specially developed robotic grip that can attach to small metal edges on the SWIFT satellite. These flanges were originally used for stabilization during earthbound transportation before SWIFT’s launch but will now serve a new purpose as contact points for docking in space.

The mission is drawing attention from the Pentagon, according to Lee, who also said Katalyst aims to run further orbital maneuvering tests in collaboration with U.S. Space Command once the SWIFT boost is complete.

“While we’re dealing with a NASA observatory and civilian science, the broader implications—especially concerning national security in space—are significant,” Lee added.

Earlier this year, China exhibited two satellites maneuvering closely in orbit, building on a 2022 operation in which one Chinese satellite pulled another into a different orbit. These events have heightened concerns among U.S. officials, who are wary that such actions could pose risks to American assets in space.

The U.S. Department of Defense has been pursuing similar technologies, although many of its activities in orbital maneuvering remain undisclosed.

Katalyst's expansion into satellite servicing was made possible by its recent purchase of Colorado-based Atomos Space. So far, the company has invested $25 million into the Link spacecraft program. According to Lee, the goal is to keep the manufacturing cost of each robotic spacecraft well below traditional satellite prices, which often reach into the hundreds of millions.

“We want to bring the cost of building these robotic satellites down to the high single-million or low double-million dollar range,” Lee said, although he did not provide precise figures.