(Adds context, Marles comments on defence cooperation)

By Kirsty Needham

SYDNEY, July 28 (Reuters) - Australia's Prime Minister Anthony Albanese said he was confident a deal for the U.S. to sell nuclear powered submarines to Australia was on track, ahead of talks between defence and foreign ministers of the two nations on Friday.

Twenty-five U.S. Republican lawmakers told President Joe Biden on Thursday the plan to sell three attack submarines to Australia under the AUKUS partnership would "unacceptably weaken" the U.S. fleet without a clear plan to replace them.

U.S. Secretary of State Antony Blinken and Defence Secretary Lloyd Austin are in Queensland state for the annual AUSMIN dialogue, where progress on the nuclear-powered submarine deal, regional security and clean energy will be the focus.

"I am very confident," Albanese told reporters on Friday, when asked about the Republican letter, which noted the AUKUS agreement was "vitally important" but shouldn't weaken the U.S. fleet.

The U.S. is Australia's major security ally, and the AUKUS project announced with Britain in March will see the United States sell Australia three U.S. Virginia class nuclear powered submarines in the early 2030s, before Britain and Australia produce a new submarine class - SSN-AUKUS - the following decade.

Australia's Defence Minister Richard Marles said in a Sky television interview on Friday that Australia, which has agreed to invest $3 billion in U.S. submarine facilities, understood there was "pressure on the American industrial base" but AUKUS was "on track".

"Why this arrangement is going to be so advantageous for all three countries is because we will develop an industrial base in this country which will contribute to the net capability of Australia, the UK and the U.S.," he added.

CHINA CONCERNS

China's security ambitions in the Indo-Pacific will also be under discussion by the security allies.

"We've seen troubling (Chinese) coercion from the East China Sea to the South China Sea to right here in the Southwest Pacific, and will continue to support our allies and partners as they defend themselves from bullying behaviour," Austin said before meeting with Marles on Friday.

Australia is reshaping its defence force in response to China's military build up, and plans to boost its long range strike capability, domestic missile production, and interoperability with the U.S. and other regional militaries.

Austin said deepening defence ties, including efforts to integrate Japan into joint force posture initiatives, would be discussed.