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* Banks to respond with loan terms in 3-4 weeks
* Gas reserves are one of biggest finds in a decade
* Multi-billion dollar contracts agreed in recent months
* Projects could transform war-torn Mozambique
By Joe Brock and Ed Cropley
JOHANNESBURG, Sept 27 (Reuters) - Italian oil firm Eni has approached banks for billions of dollars to financea huge offshore gas development in Mozambique, a significantstep in getting a long-delayed project off the ground, thecompany and sources said.
Eni confirmed it met bankers in London last week aboutproject financing to develop the Coral field, part of the hugereserves discovered six years ago in the Area 4 concession offthe Mozambican coast.
"It's running into billions of dollars," one source familiarwith the financing told Reuters, adding banks were also lookingfor credit guarantees from foreign governments, includingBritain and China.
Banks are likely to respond within three to four weeks withterms of loans they are willing to provide, one of the laststages before Eni can make a final investment decision (FID) onthe project, two sources close to the deal said.
Eni said it hoped to announce a FID by the end of this year.
Some lenders may be concerned about involvement in a projectin Mozambique, given recent clashes between oppositionguerrillas and government forces and financial scandals.
The International Monetary Fund (IMF) is in Mozambique thisweek to try to restore trust between President Filipe Nyusi'sgovernment and international lenders after more than $2 billionin secret loans came to light this year.
The IMF has suspended its own lending to the southeastAfrican country, insisting on external scrutiny as a precursorto resuming financial aid.
"The biggest challenge is Mozambique country risk," one ofthe sources said.
Reserves discovered in Mozambique's Rovuma Basin in recentyears amount to some 85 trillion cubic feet, one of the largestfinds in a decade and enough to supply Germany, Britain, Franceand Italy for nearly two decades.
The gas offers Mozambique an opportunity to transform itselffrom one of the world's poorest countries into a middle-incomestate and a major global liquefied natural gas (LNG) exporter.
Negotiations with operators Eni and U.S. firm Anadarko have dragged on for years due to disputes over terms andconcerns about falling energy prices.
However, there have been several signs of significantprogress in recent months.
Eni has struck a deal with Samsung Heavy toprovide a floating LNG platform to process the gas from theCoral field, which will be sold to BP.
Eni has also wrapped up long-running talks to sell amulti-billion dollar stake in other fields in Area 4 to ExxonMobil, sources told Reuters last month.
In 2013, Eni sold 20 percent of its Area 4 licence toChina's CNPC for $4.2 billion but since then oil and gas priceshave come down by more than half.
Anadarko's $24 billion onshore LNG project is expected tolag Eni's and its FID is unlikely this year. (Additional reporting by Stephen Jewkes in Milan; Editing byMark Potter)
