Egypt, Libya Explore $1 Billion Oil Pipeline to Boost Cooperation

SEATTLE (Oil Monster): Egypt and Libya are considering a major oil infrastructure project in a bid to boost energy ties between the two North African neighbors. The proposed pipeline would stretch about 800 kilometers from Tobruk in eastern Libya to Alexandria in Egypt. It will primarily be used for carrying Libyan crude to Egyptian refineries. According to a government official, the project is estimated to cost more than $1 billion.

The initiative follows recent discussions between Egyptian and Libyan officials on expanding cooperation in petroleum, natural gas and electricity.

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The pipeline’s capacity will be aligned with Libya’s oil production and export potential as well as Egypt’s refining requirements. Most of the crude transported through the proposed line would be processed at refineries in Alexandria.

It must be noted that Libya’s oil output, including condensates, had reached 1.48 million barrels per day- the highest production level in almost 13 years. The country targets to boost production to 1.5 million bpd.

The pipeline project is expected to provide an additional source of crude for domestic refining and fuel supply for Egypt, which has been affected by oil supply shortages, especially due to regional shipping disruptions. At the same time, it will help Libya gain greater flexibility to monetize rising oil production.