By Ece Toksabay and Orhan Coskun
ANKARA (Reuters) - Turkey could finalize terms for delivery of a second consignment of S-400 advanced missile defenses from Russia by April when the first batch will be ready to operate, Ankara's defense industry chief said on Friday.
Turkey has already agreed to buy two consignments of S-400s, triggering a crisis with the United States and possible U.S. sanctions, but Ankara is discussing technology transfer and joint production with Moscow for the second batch, he said.
The United States says the S-400s are incompatible with Western defenses and has suspended NATO ally Turkey from an F35 stealth fighter jet program because it fears Russia would gain information about the jets through deployment of the systems.
Ismail Demir, head of the Turkish Defence Industry Directorate, said Ankara was still interested in buying U.S. Patriot defenses. Turkey had no preconditions, he said, but Washington has repeatedly asked Turkey to drop the S-400s.
Under the proposed sanctions Ankara could be blocked from purchasing F-16 spare parts, Demir said, which would relieve Turkey from its duties on intellectual property rights and allow it to resort to domestic production.
"If one of the parties change the rules of the game, the other party would not have to play the game," Demir said.
TURKISH FIGHTER JET
Turkey wants to eventually replace its existing fleet of F-16 with its first indigenous fighter jet, the TF-X, and was open to international cooperation on the project, Demir said.
He said the initial plan was to use General Electric's F110 engine as the starting point for planning the new jet, but the defense directorate was studying alternatives.
Turkey and Britain are close to agreeing on collaboration to build a new generation of fighter jet engines for the Turkish air force, he said.
The 100 million pound ($128 million) deal between Kale Group and Rolls-Royce was initially signed two years ago but in effect put on hold in March after failure to resolve differences over intellectual property rights and terms of production.
The main issue for Ankara was that development and production should be carried out in Turkey. "Rolls-Royce does not object to producing it in Turkey, and the existing differences over mass production and intellectual property rights can be overcome," Demir said.
He said the structure of a joint venture which has been set up between Rolls-Royce and Kale could also be altered.
($1 = 0.7794 pounds)
(Editing by Dominic Evans)