Egypt and Libya are advancing plans for an 800-kilometre crude oil pipeline linking Tobruk with Alexandria, a project that would connect Libya’s expanding oil supply directly with Egypt’s Mediterranean refining industry.
The proposed pipeline is expected to cost more than $1bn, according to Asharq Bloomberg, citing an Egyptian government official. The two countries are discussing financing, implementation arrangements and the line’s final capacity, which would depend on available Libyan export volumes and the processing capabilities of Egyptian refineries.
No final investment decision, financing package or construction timetable has been announced.
Under the proposal, Libyan crude would flow directly to refineries in Alexandria, providing Egypt with an additional source of feedstock while offering Libya another outlet for its production.
The plan comes as Libya seeks to sustain a recovery in oil output, with crude production reaching about 1.44mn barrels a day in June, its highest level since 2013 and close to the National Oil Corporation’s previously announced 1.5mn b/d target.
For Egypt, the project would support efforts to raise utilisation of its refining infrastructure and reduce reliance on imported petroleum products. Cairo has also been diversifying crude supplies, including through a May agreement between the Egyptian General Petroleum Corporation and Algeria’s Sonatrach covering potential purchases of Algerian crude.
The pipeline remains at the planning stage, however, and its commercial viability will depend on the final capacity, committed Libyan supply volumes, financing structure and terms governing the processing of crude in Egypt.
If those conditions are secured, the project could create a direct energy corridor between Libya’s upstream production and Egypt’s refining infrastructure on the Mediterranean.
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