DUBAI/LONDON: Pipeline bombings by Islamist groups have cut off Israeli gas supplies from Egypt, forcing the Jewish state to seek up to one million tons of gasoil on the international market to secure its national energy needs for 2012.
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 have stopped supplying," said a trader, partly based in Israel.
The country’s main electricity supplier is tendering to buy 750,000 tons of gasoil, with an option to purchase further volumes for a total one million tons for the year ahead. The contract will be awarded in December.
Swiss-based oil trader Gunvor with close connections to Russia is the favorite to win the contract.
But smaller volumes may be awarded to India’s Reliance and an Azeri oil company called Socar, according to traders in the region.
"It seems that one of the giants agreed to supply the whole volume, and it seems Gunvor will get the tender," said a trader with direct knowledge in the tender process.
The Egyptian public is unhappy with the deal seen to provide gas to the Jewish state too cheaply and Egypt has been unable to maintain control over Sinai.
