CORRECTED - UPDATE 1-Gazprom, E.ON clinch deal on Siberian gas field

(Corrects in second paragraph to 3 percent from about 1.42 percent)

MOSCOW/FRANKFURT, Oct 2 (Reuters) - Russia's Gazprom (GAZP.MM), the world's largest natural-gas company, agreed to give German utility E.ON (EONGn.DE) a stake in a Siberian gas field, ending speculation that four years of talks could fail.

E.ON will give back to Gazprom a stake of just under 3 percent in the Russian company, and the German utility will in exchange receive a quarter minus one share of the Yuzhno Russkoye gas field, the two companies said on Thursday.

E.ON had held a total of about 6.4 percent in Gazprom and will hold some 3.5 percent after the transaction.

The German utility is the second to join Gazprom to exploit the field -- which has been producing gas since the end of last year -- after Germany's BASF (BASF.DE) took a stake of 35 percent minus one share in April 2006.

Gazprom and E.ON had signed a memorandum of understanding about the field in July 2004, but several rounds of negotiations between the two companies had failed to bear fruit, leading to speculation the talks might be abandoned.

The Yuzhno-Russkoye field has reserves of over 700 billion cubic metres of gas. The field will supply gas to the Nord Stream pipeline under the Baltic Sea to Germany.

E.ON shares rose more strongly than the German benchmark index and other European utilities.

They climbed 1.3 percent to 36.24 at 1115 GMT, while the German DAX .GDAXI index was 0.5 percent higher and the DJ Stoxx utilities index .SX6P advanced 0.7 percent. Gazprom shares were up 0.5 percent. (Reporting by Peter Dinkloh)