Egypt's military spokesperson announced on Sunday that Border Guard forces have destroyed eight illegal underwater diesel containers they say held 334,000 litres of fuel in the Sinai Peninsula.
The statement, published on the spokesperson's Facebook page, said a pipe network used to transfer the fuel to the adjacent Gaza Strip was also destroyed.
On Saturday, the page announced that army forces had uncovered a "large fuel smuggling network" connecting Sinai to Gaza, in addition to other smuggling tunnels.
The Egyptian military has been cracking down on illegal smuggling in Sinai since the rule of ousted president Mohamed Morsi. The operations were escalated after Morsi's ouster in July.
In September, the UN Office for the Coordination of Humanitarian Affairs (OCHA) said illegal smuggling tunnels linking Egypt to the Gaza Strip had been greatly reduced, with some 10 tunnels remaining from an estimated 300 in June.
The empoverished Gaza Strip relies heavily on the underground tunnel network, through which commercial goods such as fuel and basic construction materials are smuggled to bypass an Israeli blockade and Egyptian-imposed border restrictions.
Egypt, which is carrying out a large-scale military operation against Islamic militants in Sinai, has recently accused Hamas – an ideological off-shoot of the Muslim Brotherhood and a power stronghold in Gaza – of interfering in its internal affairs to support Morsi and the Muslim Brotherhood.
Hamas has denied these accusations.
Since 3 July, Egypt has intermittently closed its Rafah crossing, the main gateway to the outside world for the 1.7 million Palestinians in the Gaza Strip, citing security concerns.