ONGC Videsh Ltd (OVL), the overseas division of government-run Oil & Natural Gas Corporation (ONGC), on Monday confirmed that it would buy a 10 per cent stake in a Mozambique gas field from U. S.-based Anadarko Petroleum Corporation.

For the 10 per cent stake in the Mozambique's offshore Rovuma Area 1 gas field, OVL will pay $2.64 billion to the American company.

The gas field in question will be used to convert up to 65 trillion cubic feet of gas reserves into LNG (liquefied natural gas) for supplying the fuel to Indfian and other markets.

OVL Chairman Sudhir Vasudeva said that the deal would provide India with LNG at a competitive price, adding that it was a big step towards the country's energy security.

Speaking on the topic, Vasudeva added, "We will buy this gas at the prevailing market rates from the consortium. But since we are also part-owners and part of the consortium, we will technically be buying from ourselves. So, all the resultant profits will also accrue to us."

Earlier this year, ONGC teamed up with OIL to spend $2.5 billion on buying a stake in Videocon Industries Ltd's Rovuma-1 Mozambique natural gas field. Last year, the energy giant hit an agreement to buy an 8.4 per cent stake in ConocoPhillips's Kashagan project in a deal worth $5 billion.