Egypt and Libya are reportedly nearing a deal to build an 800-kilometer oil pipeline connecting Tobruk with Alexandria, creating a direct route for growing Libyan crude production to reach Egyptian refineries as the war with Iran disrupts Egypt’s traditional Gulf supplies.
The proposed pipeline would cost more than $1 billion, according to a government official who spoke to Asharq Bloomberg on condition of anonymity. The two countries are now studying financing, implementation and the pipeline’s final capacity, which would be determined by Libya’s available export volumes and the processing capacity of Egyptian refineries.
The project comes as Egypt scrambles to replace crude supplies disrupted by the closure of the Strait of Hormuz. Cairo is seeking to import at least 1 million barrels of Libyan crude per month after Kuwaiti supplies were suspended, according to an Egyptian government official previously cited by Asharq Bloomberg.
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A direct Tobruk-Alexandria pipeline would give Egypt access to Libyan barrels without relying on tanker shipments, while providing Libya with another outlet for crude as production climbs to its highest level in more than a decade.
Libya is currently producing around 1.43 million barrels per day of crude and another 49,000 bpd of condensate, bringing total liquids production to roughly 1.48 million bpd. National Oil Corp. Chairman Masoud Suleman has said the country is pushing toward 1.5 million bpd.
The pipeline plan follows talks between Egyptian Prime Minister Mostafa Madbouly and Libya’s Government of National Unity Prime Minister Abdul Hamid Dbeibeh on expanding cooperation in oil refining, natural gas and electricity.
For Libya, the project could provide another market for rising production while allowing some crude to return as refined products for domestic consumption. Egypt would gain additional feedstock for its Mediterranean refining system as Gulf supply routes remain exposed to the Iran conflict.
Libya’s National Oil Corp. did not respond to Asharq Bloomberg’s request for comment.
By Charles Kennedy for Oilprice.com
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