Egypt and Libya are nearing the finalisation of a joint project to construct an 800-kilometre (497-mile) oil pipeline connecting the Libyan city of Tobruk directly with Egypt’s Mediterranean port city of Alexandria.

Estimated to cost over $1 billion, the proposed pipeline aims to transport Libyan crude oil to Egyptian refineries, according to a government official who spoke to Asharq Bloomberg on condition of anonymity.

Both nations are currently evaluating financing options, implementation schedules, and overall capacity to match Libya’s export volume with Egyptian refining capabilities.

The initiative follows recent high-level talks between Egyptian Prime Minister Mostafa Madbouly and Abdul Hamid Dbeibeh, prime minister of Libya’s Government of National Unity.

The discussions focused on deepening bilateral energy ties, spanning natural gas, petroleum refining, and electricity grid interconnections.

If implemented, the pipeline will offer significant economic and logistical advantages for both nations.

For instance, refining crude domestically will help supply Egypt's domestic fuel market while allowing Libya to utilise its expanding crude output.

Under the agreement, Libya could secure a dedicated share of refined fuel for local consumption or export the surplus through Egyptian infrastructure.

For Cairo, the pipeline serves as a critical strategic fallback.

Egypt is seeking to secure at least 1 million barrels of Libyan oil per month to offset the suspension of Kuwaiti crude supplies, which have been disrupted by military escalations and shipping hazards in the Strait of Hormuz.

Regional tensions and recent attacks on energy infrastructure have heightened concerns over global oil stability, accelerating Egypt’s push for localised, overland import routes.

While Libya's National Oil Corp. (NOC) did not respond to requests for comment, NOC Chairman Masoud Suleman recently confirmed that Libyan oil production has surged to approximately 1.48 million barrels per day (bpd), including condensates—the nation's highest output level since 2013.

Libya continues to push toward a target of 1.5 million bpd, making reliable transport infrastructure to neighbouring refineries increasingly vital. 

Apart from the proposed oil pipeline, Libya reportedly explored options to construct a gas pipeline connecting Egypt and Greece.