By an OGJ Online Correspondent
CAIRO, Aug. 6 -- After more than 5 years of negotiations, Egypt and Libya agreed to form a $100 million firm, the Arab Co. for Oil and Gas Pipelines (Al-Tayoub), to transport crude to Egypt and natural gas to Libya.
Officials of the Egyptian General Petroleum Corp. (EGPC) announced Saturday that Egypt's general authority for investments approved formation of the joint company. Work is to begin immediately on fixing the route of the proposed pipeline.
The Egyptian newspaper Akhbar Al-Youm quoted Petroleum Minister Sameh Fahmy as saying Libya's National Oil Co. (NOC) and EGPC would each provide 50% of the capital for the new firm.
"A pipeline will be built to transfer Libyan crude to Egyptian facilities and Egyptian natural gas to Libyan cities. Initial investment will be around $20 million," Fahmy said.
Libyan oil would be refined in Cairo and Alexandria, he said.
Egypt, which has several maturing oil fields, wants to establish itself as an export hub for natural gas. The country's proven gas reserves are estimated at about 50 tcf.
In January, Egypt, Syria, Lebanon, and Jordan signed an agreement to build a $1 billion pipeline to transport Egyptian and Syrian natural gas to Lebanon, Jordan, and Turkey.
Egypt is leading efforts to reduce trade barriers and strengthen commercial relations among Arab countries, officials said.
Libya has average oil production of 1.3 million b/d.