The United Arab Emirates became the third nation to choose the air tanker being developed by Northrop Grumman Corp. and Airbus for its next generation air-refueling tanker.

The UAE joins the United Kingdom and Australia in opting for the A330 Multi-Role Tanker/Transport over Boeing Co.'s KC-767. Northrop and Airbus, a unit of European Aeronautic Defence and Space Co., are developing the tanker primarily to compete with Boeing for a U.S. Air Force contract expected to be worth as much as $100 billion.

EADS said the two parties will now negotiate the purchase of the jets, which are expected to cost between $175 and $200 million each. Deliveries are expected to begin in 2011, the company said.

However, defense analyst Paul Nisbet said that the Airbus/Northrop jet is more than likely being offered at a steep discount.

There are also reports that Saudi Arabia has opted for two A330 tankers. Boeing has sold eight of its KC-767 tankers, four each to Japan and Italy.

Shares in Los Angeles-based Northrop were down 82 cents, or about 1 percent, to $73.90 in afternoon trading Friday on the New York Stock Exchange.

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