China National Petroleum Corporation (CNPC), the country’s largest oil producer, will spend $4.2bn for a stake in Italian firm Eni’s African natural gas assets, as China looks to feed energy demand while reducing its reliance on coal.

CNPC will buy a 20% stake in Mozambique’s Area 4, where 75-trillion cubic feet of gas, or more than Norway’s existing reserves, has been found, state-controlled CNPC said on Thursday.

The purchase will be the biggest deal involving an Asian company announced so far this year and CNPC’s largest overseas purchase yet. China’s oil companies have bought oil and gas fields in countries ranging from Australia to Canada to Nigeria to meet energy demand in the world’s fastest-growing major economy.

"This acquisition affirms China’s insatiable appetite for environmentally friendly natural gas projects, paving the way for more domestic natural gas pricing adjustments ahead," said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong. "Coal will slowly lose market share in China in the coming decade."

In the statement, Eni said it had also signed an agreement with CNPC to develop the Rongchang shale gas block in China. The block covers about 2,000km² in the Sichuan Basin, close to the main consumption markets in China.

Eni, which has shale gas agreements in countries like Poland, Ukraine and Vietnam and which already has a shale agreement with China’s Sinopec, has said it is keen to develop its business in this area.

Pollution in Beijing rose to a record on January 12, sparking criticism of the government’s management of the environment.

Mozambique may have 250-trillion cubic feet of reserves, according to Empresa Nacional de Hidrocarbonetos (ENH), the country’s state-backed energy company. ENH, Galp Energia and Korea Gas Corporation each own 10% of Area 4, according to Thursday’s statement.

Mozambique’s offshore fields may hold enough gas to meet world consumption for more than two years, according to ENH.

Eni and Anadarko Petroleum Corporation, the two companies leading exploration in Mozambique, agreed last year to build the world’s second-largest liquefied natural gas export plant to start sending fuel abroad in 2018.

Selling some of its gas discoveries allows Eni to spread the cost of developing the fields and building the liquefied natural gas (LNG) plant, estimated at $20bn by Mozambique’s government, and helps cement its relationship with Asia’s largest oil and gas company. Mozambique is the biggest discovery in the history of Eni, Italy’s largest company by market value.

"It’s a really good deal. It’s going to de-risk the capital exposure for Eni," said Banco Santander’s Jason Kenney. "It’s a good price, fair price. There are significant resources."

Eni and CNPC will also jointly study shale gas exploration in China’s Sichuan basin, according to the statement. If the gas can be commercialised, the two companies will discuss the terms of a production-sharing contract.

Observers have become more pessimistic on China’s shale gas prospects in the past year and LNG is seen as a more feasible solution in a country where natural gas prices are strictly controlled. China has no commercial shale production.

The Mozambique purchase follows Australian deals struck by PetroChina, CNPC’s listed unit, in recent months. By investing in both countries, which have significant natural gas reserves, CNPC is hedging its risk, says Simon Powell, head of Asian oil and gas research at CLSA in Hong Kong.

PetroChina last month agreed to buy a 20% stake in the Poseidon natural gas discovery off the northwest coast of Australia and a 29% interest in the Goldwyer shale project in the onshore Canning Basin from ConocoPhillips.

PetroChina last December agreed to pay BHP Billiton $1.63bn for a stake in the proposed Browse LNG venture in Western Australia. The firm plans to invest at least $60bn this decade in global oil and natural gas assets to raise the share of overseas output to half of its total, chairman Jiang Jiemin has said.

"It was only a matter of time before the Chinese showed up to take a stake in the Mozambique gas projects," said Mr Powell. "East Africa is well positioned to serve Asian customers."