Pipeline bombings by Islamist groups have cut off Israeli gas supplies from Egypt forcing the Jewish state to seek up to 1 million tonnes of gasoil on the international market to secure its energy needs for 2012.

A trader said that flows were disrupted last week after a seventh attack on the pipeline in the desert peninsula of Sinai. At least one member of an armed Islamist group has been arrested in connection with the bombing.

The main supply was coming from Egypt, but since the spring revolution the pipeline in Sinai supplying both Israel and Jordan has come under attack and the Egyptians has stopped supplying. The country's main electricity supplier is tendering to buy 750,000 tonnes of gasoil with an option to purchase further volumes for a total 1 million tonnes for the year ahead. The contract will be awarded in December.

A trader with direct knowledge in the tender process said that Swiss based oil trader Gunvor with close connections to Russia is the favourite to win the contract. It seems that one of the giants agreed to supply the whole volume and it seems Gunvor will get the tender. But smaller volumes may be awarded to India's Reliance and an Azeri oil company called Socar.

The Egyptian government said earlier this month it would step up security measures along the pipeline. Bedouin tribesmen will be recruited to form patrols and alarm devices are to be installed along the pipeline's route. But the million tonne tender for gasoil, which will be used, instead of gas, to produce electricity, suggests Israel expects energy supply from Egypt to remain irregular if not cut off altogether in 2012.

(Sourced from Reuters)