Exxon Mobil Corp said on Thursday it would buy a 25 percent stake in a natural gas-rich block, offshore Mozambique, from Italy's Eni for $2.8 billion in cash.
The offshore gas reserves discovered by Eni in Mozambique are large enough to need a giant liquefied natural gas (LNG) export plant.
The east African nation
's proximity to Asian and Middle Eastern growth markets could make it a highly lucrative project.
Eni will continue to lead a floating LNG project and all exploration and production in the block, Area 4, while Exxon will lead the construction and operation of natural gas liquefaction facilities onshore.
Eni sold 20 percent of its Area 4 license to China's CNPC for $4.2 billion in 2013, but oil and gas prices have more than halved since then.
Eni, which operates Area 4, currently holds a 50 percent indirect stake in the block through a 71.4 percent stake in Eni East Africa
Galp Energia, KOGAS and Mozambique's state-owned energy firm ENH each own 10 percent in Area 4.
Upon closing of the deal, Eni and Exxon will each own a 35.7 percent stake in Eni East Africa, while CNPC will own 28.6 percent.
Reuters last year reported that Eni had wrapped up long-running talks to sell a multi-billion dollar stake in its planned Mozambique LNG development to Exxon.
Reporting by Ahmed Farhatha