OREANDA-NEWS. July 15, 2013. The China National Petroleum Corporation (CNPC), the country’s largest oil company by production, and Italian multi-national, Eni, have agreed a USD 4.2 billion deal to acquire a 20 percent stake in Mozambique’s huge offshore natural gas field, the Block 4 license.

This will be China’s biggest investment so far in an overseas natural gas field and its first foray into East Africa’s huge gas discovery.

Commenting on the deal, the Chief Executive of the Italian oil group Eni, Paolo Scaroni, said the partnership between it and CNPC is the company’s strategy to scale up its Africa production.

“We are by far the largest producer in Africa – there’s a lot more room for further agreements between us”, Mr Scaroni indicated in an interview with the Financial Times newspaper.

Eni still controls a 50 percent share in the block despite this deal.

Mozambique’s location on both the East and Southern Africa coast makes it an ideal potential source of liquefied natural gas shipments into China. China’s domestic demand for natural gas has been increasing.

Beijing is seeking to promote consumption within China and boost gas imports to replace more polluting fuels such as coal.

CNPC’s contribution to funding the construction of LNG plants could allow the companies to start exporting liquefied gas from Mozambique by the end of the decade.

The deal with Eni is the latest in a global buying spree by China’s state-owned oil companies, including deals such as CNOOC’s USD 18 billion acquisition of Nexen, a Canadian energy company, which was announced in July 2012.

The USD4.2 billion due to be paid by CNPC forms part of a EUR10 billion () disposal target set by Eni to help improve its balance sheet to help finance further exploration and development projects.