UPDATE 1-Mozambique, Eni agree tax on gas field stake sale to China
* Eni sold 20 pct of Area 4 field to China for $4.2 bln
* Agrees to pay $400 mln in tax and build a power plant
* Lawmakers have tried to fix capital gains tax at 32 pct
MILAN, Aug 13 (Reuters) - Italy's Eni said on Tuesday it had agreed, following a meeting between its CEO and Mozambique's president, to pay $400 million tax on the $4.2 billion sale of a gas field stake to China and build the east African country a power station.
Analysts had estimated that the oil and gas group's tax bill on the deal could be as high as $1.35 billion if Mozambique imposed capital gains tax of 32 percent - a fixed rate its parliament tried to make law in December.
President Armando Guebuza has put the draft law on hold.
"On the face of it, it seems to me a very good rate indeed," Mediobanca Securities oil analyst Andrea Scauri said.
Eni said it had also agreed to build a 75-megawatt power plant in Mozambique's northern Cabo Delgado province, where it had made massive gas discoveries in its offshore field.
Analysts estimate that a gas-fired power plant of that size could cost about $75 million, although the cost of any necessary transmission infrastructure would come on top of that.
Mozambique's government has faced criticism from civil society groups and the opposition over huge tax breaks it granted to foreign firms as it sought to attract investment in the years following a bloody civil war which ended in 1992.
In 2011 no capital gains tax was paid when Rio Tinto bought coal explorer Riversdale for $4 billion, and Cove Energy paid a rate of 12.8 percent when it sold out to Thailand's PTT Exploration and Production in 2012.
Eni's sale of nearly 30 percent of its Mozambican subsidiary to China National Petroleum Corporation (CNPC) gives CNPC a 20 percent stake in its lucrative Area 4 offshore gas field.
Eni is still the operator of Area 4 with a 50 percent stake.