Italy 's Eni SpA (ENI.MI) agreed Thursday to sell a 20% stake in its giant natural gas field offshore Mozambique for $4.21 billion to China National Petroleum Corp. (CNPC.YY), the latest in a string of Chinese deals aimed at boosting the country's overseas energy production.

The deal also firmly places the Chinese flag in the burgeoning East African energy sector, following an investment in oil discoveries in Uganda last year by Cnooc Ltd. (0883.HK). Analysts say oil and gas discoveries in East Africa are ideally placed to serve growing Asian energy demand.

Eni said it signed an agreement to sell 28.6% of its subsidiary Eni East Africa, which owns the Area 4 offshore gas field in Mozambique , to CNPC. This allows the Chinese company to indirectly own a 20% stake in the field, which has potential reserves of 75 trillion cubic feet of gas in place, equivalent to about four years of total European gas demand.

It is Eni's largest gas find and the company is studying a development plan that would include building a liquefied natural gas plant, enabling the resources to be shipped to distant markets in oceangoing tankers.

The Italian company has said it expects to take a final investment decision on the Mozambique project in 2014.

The completion of sale is conditional on approval from the Mozambique authorities, Eni said.

The purchase is China 's first investment in the huge offshore East African gas discoveries made in the past few years.

"The deal highlights Chinese companies' increasing interest in undertaking global LNG projects...and signals an increasing priority for China," said Oswald Clint of Bernstein Research in a note. Chinese companies, "are not a material LNG buyer in today's market, but will be," he said.

China 's natural gas needs are growing as it reduces its reliance on burning coal for power, which has made cities like Shanghai among the smoggiest in the world. According to the International Energy Agency, China's gas demand will more than quadruple to 545 billion cubic meters between 2011 and 2035.

However, China 's domestic gas production has been unable to keep pace with consumption, driving Chinese companies to invest overseas. By 2015, imports of gas are expected to exceed 35% of Chinese gas demand, compared with only 15% in 2010, China 's 12th five-year plan said.

CNPC's Mozambique investment puts Chinese companies at the forefront of the development of new resources in East Africa .

The entry of Cnooc Ltd. into Uganda , in partnership with Tullow Oil PLC (TLW.LN) and Total SA (FP.FR), kick-started the development of the country's oil fields. The companies are expected to spend between $10 billion and $12 billion by 2017 to develop around 3.5 billion barrels of oil resources and export them to market.

Peter Lokeris, Uganda 's junior energy minister, described Cnooc as a "long-term committed partner," with government in the development of the oil sector.

At the end of last year, Eni and Anadarko Petroleum Corp. (APC) agreed to coordinate the development of their gas reservoirs offshore Mozambique , as well as build shared onshore LNG facilities. Eni has said it sees LNG exports starting not before 2018.

Anadarko said last month it is looking to sell a 10% of its fields--taking its stake to 26.5%.

Eni will still own a 50% stake in the field after the CNPC deal, giving it the potential to further sell down its stake without losing it role as operator of the field. The remaining shares in the Area 4 field are held by the Mozambique state-owned national oil company ENH, Korea Gas Corp. (036460.SE) and Galp Energia SGPS SA (GALP.LB), each with a 10% stake.

Separately, Eni and CNPC also said they signed a joint study agreement to develop unconventional resources in the Sichuan basin.

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