Egypt and Libya are reportedly nearing a deal to construct an 800-kilometer oil pipeline connecting Tobruk with Alexandria. This pipeline will create a direct route for growing Libyan crude production to reach Egyptian refineries as the war with Iran disrupts Egypt’s traditional Gulf supplies. Also, this pipeline alongside others such as the Nigeria-Libya pipeline, is part of Libya’s efforts to increase its crude oil capacity.
Cost
Moreover, the proposed pipeline would cost more than $1 billion. This information was revealed by a government official who spoke to Asharq Bloomberg on condition of anonymity. Currently, the two countries are studying financing, implementation and the pipeline’s final capacity. These would be determined by Libya’s available export volumes and the processing capacity of Egyptian refineries.
Egypt Seeks Options to Replace Strait of Hormuz Disruptions
Furthermore, the project comes as Egypt scrambles to replace crude supplies disrupted by the closure of the Strait of Hormuz. Cairo is looking to import at least 1 million barrels of Libyan crude per month. Thus comes in after Kuwaiti supplies were suspended, according to an Egyptian government official previously cited by Asharq Bloomberg.
A direct Tobruk-Alexandria pipeline would give Egypt access to Libyan barrels without relying on tanker shipments. Additionally, the pipeline would provide Libya with another outlet for crude as production climbs to its highest level in over a decade.
Libya is currently producing around 1.43 million barrels per day of crude. Also, it is producing another 49,000 bpd of condensate, bringing total liquids production to roughly 1.48 million bpd. National Oil Corp. Chairman Masoud Suleman stated the country is pushing toward 1.5 million bpd.
The pipeline plan comes after 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. Moreover, it would allow 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.
Project Factsheet
Name: Tobruk-Alexandria Oil Pipeline
Project Type: Cross-border overland crude oil trunkline
Route: Tobruk (Eastern Libya) to Alexandria (Northwest Egypt)
Total Length: 800 km (approx. 125 km in Libya, 495–675 km in Egypt)
Design Capacity: 150,000 barrels per day (bpd)
Estimated Capital Expenditure (CAPEX): Exceeds $1 Billion USD
Project Status: Feasibility study / Under negotiation
Developing Entity / SPV: Arab Company for Oil and Gas Lines (Altube) — Joint Venture
Key Stakeholders: Egyptian Ministry of Petroleum & Mineral Resources, Libyan National Oil Corporation (NOC), Egyptian General Petroleum Corporation (EGPC)
Strategic Rationale & Market Drivers
- Alternative to Strait of Hormuz Disruptions: Egypt seeks to replace traditional Middle Eastern crude imports (e.g., Kuwaiti and Saudi supplies) that face severe maritime shipping risks and suspensions in the Persian Gulf.
- Immediate vs. Long-Term Supply: Cairo is targeting an immediate baseline of 1 million barrels per month of Libyan crude via existing channels while the pipeline is developed as a long-term structural corridor.
- Downstream Integration: Supplies feed directly into Egypt’s Mediterranean refining hub in Alexandria to produce refined fuels for local consumption and re-export.
- Monetizing Libyan Output: Allows Libya’s National Oil Corporation (NOC) to secure an overland export channel as domestic liquids production reaches 1.48 million bpd (targeting 1.5 million bpd).
Operational and Commercial Framework
Dual-Directional Value Creation:
- Egypt: Secures consistent crude feedstock, reducing dependence on volatile seaborne transit.
- Libya: Receives a guaranteed share of refined petroleum products from Egyptian refineries to offset domestic fuel shortages.
Financing & Implementation Studies:
Governments are currently finalizing:
- Financing architecture (concessional bilateral/multilateral debt vs. sovereign co-investment).
- Tariff structures, metering points, and security protocols.
- Operational throughput alignment between Libyan field capabilities and Egyptian refinery capacity.
Project Team
Arabian Oil Pipelines Co. (Altube): The dedicated joint-venture special purpose vehicle (SPV) tasked with cross-border pipeline development and commercial management between Egypt and Libya.
National Oil Corporation (NOC): Upstream crude supplier & Tobruk terminal operator
Egyptian General Petroleum Corporation (EGPC): Downstream buyer & refining coordinator
Petrojet (Petroleum Projects and Technical Consultations Co.): Lead EPC (Engineering, Procurement, & Construction) contractor
EPROM (Egyptian Projects Operation and Maintenance): Midstream & Alexandria refinery technical integration
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