(EnergyAsia, March 18 2013, Monday) — China National Petroleum Corp (CNPC) will pay US$4.21 billion for a 20% stake in a giant Mozambique gas field from Italian oil and gas company ENI, the two companies have announced.

ENI will still hold a 50% stake in the field, described as one of the world’s largest discoveries in recent years, once the deal is approved by the government of the East African country. Located in the Ruvuma Basin, the offshore Area 4 has proven gas reserves of 75 trillion cubic feet or 2.12 trillion cubic metres (tcm), sufficient to meet the combined demand of German, Britain, France and Italy for more than seven years.

Area 4’s remaining shares are held by state-owned Empresa Nacional de Hidrocarbonetos de Mocambique (ENH, 10%), South Korea’s Kogas (10%) and Portugal’s Galp Energia (10%).

The sale will enable ENI to reduce its risk exposure while boosting the viability of a world-class project and speeding up its commercial development with guaranteed market access to Asia’s major consuming countries.

The agreement was one of two signed by ENI CEO Paolo Scaroni and CNPC Chairman Jiang Jiemin in Beijing on March 13.

The two companies have also agreed to collaborate to study the shale gas potential of the 2,000-sq km Rongchang block in China’s Sichuan Basin. They have begun discussion over a production sharing agreement if the block is proven to be technically and commercially feasible for shale gas development.

ENI, which is looking to set up a terminal in Mozambique to liquefy the natural gas for export to Asia, is reported to be open to cooperating with the consortium developing the nearby Area 1 operated by US upstream company Anadarko Petroleum Corp. By unitising the two fields, the two consortia would boost the viability of their respective ventures.