Egypt and Libya are eyeing a pipeline to refine Libyan crude in Egypt’s Med facilities

Egypt and Libya are nearing an agreement on an 800-km oil pipeline connecting Tobruk with Alexandria. The proposed project is preliminarily estimated to cost over USD 1 bn, and would carry Libyan crude directly to Egyptian refineries on the Mediterranean coast. The two sides are discussing financing, implementation, throughput, and the pipeline’s final capacity to ensure it aligns with both Libya’s export capabilities and Egypt’s refining capacity.

The pipeline would give both sides something they need. Egypt could turn Libyan crude into fuel for its domestic market or products for export. Egypt exported 2.3 mn tons of petroleum products in 1H 2026. Libya, which produces around 1.48 mn bbl / d of crude and condensates, could use Egypt’s refining capacity to secure petroleum products for domestic use and export any surplus.

BACKGROUND- Egypt and Libya agreed in 1997 to develop a pipeline between Tobruk and Sidi Kerir — the Mediterranean oil hub west of Alexandria — but the project was never built. The latest proposal has yet to disclose the precise landing point or which refineries would receive the crude. Midor, for instance — the Alexandria cluster’s largest refinery — can process some 170k bbl / d.

The trigger: Egypt is looking west after disruptions at the Strait of Hormuz halted Kuwaiti crude supplies, seeking to import at least 1 mn bbl of Libyan oil a month as a replacement. The pipeline would turn that emergency sourcing shift into a fixed supply corridor that bypasses Hormuz and maritime transport altogether.

Beyond pipelines, Egypt is also connected to Libya through electricity. Cairo boosted its export capacity by 43% to 100 MW following a sudden grid collapse that knocked 1.35 GW of Libyan power offline. Cairo also wants to scale up the cross-border link to 2 GW from its historical 150 MW baseline.

Up for grabs

The Oil Ministry has launched its 2026 international oil and gas exploration bidding round, offering 14 onshore and offshore blocks under production-sharing agreements, according to a statement.

The details: The Egyptian Natural Gas Holding Company is offering eight blocks across the Mediterranean, Nile Delta, and North Sinai, with bids due by 14 December. The Egyptian General Petroleum Corporation is offering another six blocks in the Gulf of Suez, Sinai, and the Western Desert, with bids due by 11 November. The rounds run through the Egypt Upstream Gateway, which hosts technical data, fields investor questions, and receives and evaluates bids.

Why it matters: Many of the offered blocks are close to producing fields, pipelines, processing plants, and export infrastructure, which could make any commercial discoveries cheaper and faster to bring online.

A big gas hunt

Shell and Petronas plan to invest some USD 400 mn to drill three new wells under Phase 12 of the West Delta Deep Marine (WDDM) concession, targeting an estimated 110 bcm (c. 3.9 tcf) of gas, with new volumes expected online in 1H 2028, according to an unnamed government official. Shell has said that Phase 12 is currently being signed with the government, but did not confirm the investment figure.

Plugging into what’s already there: The wells are set to be tied into WDDM’s existing subsea infrastructure operated through Rashpetco, the JV between Shell and EGPC responsible for the concession. Reusing the existing network should bring the additional volumes online without developing an entirely new offshore system. Shell has also poured USD 70 mn into a 4D seismic survey aimed at identifying remaining recoverable gas across the fields.

DATA POINT- Shell is currently working toward a long-term target of doubling its total Egyptian natural gas production to 800 mmcf / d by June 2030, up from its current 400 mmcf / d baseline. It also has plans to bring the Mediterranean’s Khufu field online in the second half of 2027 with an initial output of 45 mmcf / d. The government wants production to reach 6.6 bcf / d by 2030, up from about 3.9 bcf / d today.

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