Prince Alwaleed criticises $25bn SGI collapse

The Arabic press this week carried an unusually outspoken criticism of the recent cancellation of the $25 billion Saudi Gas Initiative by leading businessman and multi-billionaire Prince Alwaleed bin Talal Al Saud.

'What happened to the Gas Initiative is a farce and a great mistake,' he said. 'Is it reasonable that agreements signed three years ago with the biggest global firms in the presence of the King and Crown Prince are left for some employees to put obstacles?

'How could we abolish the contracts we signed three years ago to sign a new deal with Shell, which I call a token deal because it does not provide large investments for the kingdom. We have missed a major opportunity, not only in gas, pipelines, electricity and water but in many other fields.

The Prince went on to apportion blame for the collapse of the $25 billion SGI project earlier this year which included eight of the world's top energy companies.

'Frankly, it was obstructed by Aramco as it represents the oil bureaucracy in the kingdom…I mean that the Oil Minister and Aramco have wasted this deal.

'The problem is that the loss was not only in foreign investment but to the entire Saudi industry which is in a bad need of products provided by gas…don't forget the thousands of jobs which could have been provided for our youth.'

Last week the Saudi Government approved a $2 billion upstream project comprising Shell, Total and Saudi Aramco to develop gas fields in the Rub Al Khali.

This is all that is left of the $25 billion SGI project and does not include any downstream elements as in the previous deal. The original US partner in the project has also been replaced by Saudi Aramco.

However, local economists believe that more parts of the SGI project will emerge as independent projects, though exactly which firms will be willing to participate, and on what basis, is not at all clear right now. The dust has yet to settle on the $25 billion SGI collapse, and this controversy is sure to continue.