Egypt-Libya Pipeline Plan Could Create a New Route for Libyan Crude
Egypt and Libya are discussing a major new oil pipeline linking Tobruk with Alexandria, a project that could deepen energy ties between the two countries while giving Libya another route to market its crude.
The proposed pipeline would stretch about 800 kilometers and cost more than $1 billion. The two sides are still discussing financing, construction arrangements, volumes and the pipeline’s final capacity, so the project remains at the planning stage.
For Libya, however, the proposal comes at an important time. Oil production has recovered strongly, with the country producing more than 43 million barrels in August, while the National Oil Corporation continues to target further production growth. The challenge is increasingly not only how much crude Libya can produce, but how efficiently it can move, process and sell those additional barrels.
A new outlet for Libya’s growing oil production
The Tobruk-Alexandria route would give Libyan crude direct access to Egypt’s large refining system. Egypt has significant refining capacity and is investing billions of dollars to modernise and expand its refineries, creating a potential nearby market for Libyan crude.
Egypt has already increased its reliance on Libyan oil. Cairo plans to build a 16-million-barrel strategic crude reserve by the end of 2026, with 10 million barrels expected to come from Libya.
That relationship could become more important if the pipeline moves ahead.
A land-based route would also give both countries greater flexibility during periods of disruption in international shipping. Egypt has faced pressure to secure alternative crude supplies as instability around the Strait of Hormuz has affected traditional supply routes. For Libya, a direct connection to Egyptian refineries would create another outlet alongside its existing export terminals.
The proposed initial volumes appear modest compared with Libya’s overall production. Egypt has indicated that it wants to import at least 1 million barrels of Libyan crude per month. That would represent only a small share of Libya’s current output, but the strategic value could grow if the pipeline eventually operates at a larger capacity.
The bigger opportunity is regional energy integration
The project fits into a wider expansion of energy cooperation between Egypt and Libya.
The two countries have discussed cooperation across crude oil, refining, natural gas and electricity, while their existing geographic proximity gives them an advantage that longer-distance energy partnerships cannot easily match.
For Libya, the potential benefit goes beyond another crude export route. Greater access to Egyptian refineries could create opportunities for more structured oil trading, refined-product supply and investment in energy infrastructure.
It could also strengthen the eastern Libyan energy corridor. Tobruk sits close to some of Libya’s most important oil-producing areas and export infrastructure, making the city a natural starting point for a route into Egypt.
But the project also highlights a major weakness in Libya’s energy sector: infrastructure must expand alongside production. Libya has ambitious plans to increase crude output, yet repeated disruptions to pipelines and oil facilities show how quickly production can suffer when infrastructure and security fail.
A strategic project, but execution will matter
The pipeline could therefore become an important piece of Libya’s future energy network, but its value will depend on whether the two countries can turn the proposal into a commercially viable project.
The cost of more than $1 billion, the 800-kilometre route and the need to guarantee reliable crude supplies all present significant challenges. Libya will also need continued investment across its fields, pipelines, terminals and export infrastructure if higher production is to translate into higher and more reliable export revenues.
For Egypt, the project could provide a nearby and potentially more secure source of crude while supporting the expansion of its refining industry. For Libya, it could provide another market and reduce reliance on a limited number of export routes.
The pipeline is still only a proposal. But if Egypt and Libya can agree on financing, capacity and implementation, the Tobruk-Alexandria connection could become more than an oil pipeline. It could form part of a broader regional energy corridor linking Libyan production with Egyptian refining, storage and distribution capacity.
That would give Libya another way to turn rising oil production into a stronger regional energy position.
