SYDNEY, Nov 4 (Reuters) - Australia has cancelled a

multi-billion dollar military satellite project with Lockheed

Martin ( LMT ), with a Department of Defence statement on Monday

saying the military will instead shift its focus to a

multi-orbit system.

Lockheed Martin Australia was announced as the preferred

tenderer last year for the Geostationary Earth Orbit (GEO)

satellite communications system, in a project that was to

deliver Australia's first sovereign-controlled satellite

communication system over the Indo-Pacific ocean regions.

The project for a single orbit satellite with Lockheed

Martin ( LMT ) had been cancelled, the Department of Defence said in a

statement on Monday.

"With the acceleration in space technologies and evolving

threats in space since the project's commencement, Defence has

assessed that a single orbit GEO-based satellite communications

system would not meet strategic priorities," the statement said.

It said Australia would instead prioritise a multi-orbit

capability to increase resilience for the Australian Defence

Force.

In a radio interview with the Australian Broadcasting

Corporation, Prime Minister Anthony Albanese said while

Australia's defence budget was increasing, his government was

prioritising its purchases.

When the Lockheed Martin ( LMT ) project was announced last year it

was said by authorities to be a "multi billion dollar" deal, but

in Monday's Defence statement there was no specific value to the

cancelled project.

However, Defence said in the statement that it will still

allocate A$9-12 billion ($13.87 billion) for space capabilities.

($1 = 1.5135 Australian dollars)