The Egyptian Natural Gas Holding Co. (EGAS) has established a subsidiary in Saudi Arabia with initial capital of SAR 2 million ($530,000), Egypt's Ministry of Petroleum said on Sunday.

Owned 80% by EGAS, the newly established natural gas company "Modern Gas" Saudi Arabia is part of the Egyptian firm's strategy for offshore expansion, especially in Gulf Cooperation Council (GCC) countries, aimed at attracting foreign currency inflows into Egypt.

Egypt is striving to attract foreign currency inflows to address a shortage that has curbed local business activity and led to backlogs at ports and delays in payments for commodities.

Since early 2022, when the foreign currency shortage worsened, the pound has lost more than two-thirds of its value against the dollar in a series of staggered devaluations.

Earlier this month, Egypt secured an expanded $8 billion deal with the International Monetary Fund, along with a $1.2 billion loan for environmental sustainability, bringing its total to be borrowed from the IMF to more than $9 billion.

Ahead of the move, Egypt secured a $35 billion investment deal with Emirati sovereign fund ADQ for the development of a peninsula on its Mediterranean coast and other projects, helping ease the foreign currency crunch.