WASHINGTON, March 24 (Reuters) - NASA is cancelling

plans to deploy a space station in lunar orbit and will instead

use its components to construct a $20 billion base on the moon's

surface over the next seven years, its new chief Jared Isaacman

said on Tuesday.

Isaacman, who was sworn in at the agency in December, made

the announcement at the opening of a day-long event at NASA's

Washington headquarters at which he outlined a raft of changes

he is making to the agency's flagship moon program Artemis.

"It should not really surprise anyone that we are pausing

Gateway in its current form and focusing on infrastructure that

supports sustained operations on the lunar surface," Isaacman

told delegates at the event.

The Lunar Gateway station, largely already built with

contractors Northrop Grumman ( NOC ) and Vantor, formerly Maxar,

was meant to be a space station parked in a lunar orbit.

Repurposing the craft for a lunar surface base is not simple.

"Despite some of the very real hardware and schedule

challenges, we can repurpose equipment and international partner

commitments to support surface and other program objectives,"

Isaacman said.

Lunar Gateway was designed to serve as both a research

platform and a transfer station that astronauts would use to

board the moon landers before descending to the lunar surface.

The changes imposed by Isaacman on the flagship U.S. moon

program in recent weeks are reshaping billions of dollars worth

of contracts under the Artemis effort.

That is sending companies scrambling to accommodate the

extra urgency as China makes progress toward its own 2030 moon

landing.