"Indonesia and Russia are discussing the use of Biak as a satellite lauching base," Indonesian presidential spokesman Dino Patti Djalal told AFP by telephone from Kuala Lumpur.

President Susilo Bambang Yudhoyono attended the inaugural East Asia summit there Wednesday and departs Thursday for an official visit to Thailand.

Djalal declined to confirm a report in the Koran Tempo which said technical details for the launch would be discussed by officials from both countries in January and that the first could take place in 2007.

Hazairin Pohan, director for East and Central European Affairs at the Indonesian foreign ministry, said the base in Biak would be used by Russia's Air Launch Aerospace Corporation and initially cost some 120 million dollars.

"It has been under discussion for a while and the project is now already at the preparation stage," he said, adding that the launching system would be a "mid-air" one involving aircraft.

Biak, a 2,455 square kilometer (982 square mile) island in the easternmost province of Papua's Cendrawasih Bay, is located on the equatorial belt.

An equatorial location translates into fuel savings and bigger payload carrying capabilities.

Biak already houses a Telemetry Tracking and Command ground station of the Indian Space Research Organisation, currently operated by the Indonesian state Space and Aviation Agency.

The government has been promoting the use of Biak as the site of a space launch center since the 1960s.

Indonesia has several US-made telecommunication satellites but they were all launched from Kourou in French Guiana.

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