September 13, 2012 / 7:01 PM / 5 years ago

UPDATE 1-Italy's CDP sells 1.7 pct of Eni for 1.096 bln euros

* CDP to sell further 1.6 pct of Eni

* CDP sold 1.7 pct stake at avg price of 17.76 euros/share

* To use proceeds to help fund purchase of Snam stake (adds background, details)

MILAN, Sept 13 (Reuters) - Italian state-controlled finance group Cassa Depositi e Prestiti has sold a 1.7 percent stake in oil and gas group Eni for 1.096 billion euros ($1.41 billion), part of government-driven plans for Eni to exit gas network company Snam.

CDP, which holds 27.4 percent of Eni following the sale, said in a statement on Thursday it would sell a further 1.6 percent stake in Eni when and how it thought most appropriate.

CDP has previously said it would sell 3.3 percent of Eni, including Eni shares held by the Treasury, to help fund the acquisition of just under 30 percent of Snam.

A government decree approved in May gave Eni up to 18 months to sell down its controlling stake in Snam as Rome moves to spur competition on Italy’s gas market and reduce energy costs.

The government, eager to turn Italy into a European gas hub, is looking to build a strong independent Snam that can take the lead in developing a pan-European gas network operator.

Eni, which aims to close the sale of the Snam stake to CDP by the end of 2012, has said it plans to sell out of the gas company completely.

CDP already owns key stakes in strategic energy companies including ENI power grid operator Terna.

The 1.7 percent stake sale, carried out at an average price of 17.76 euros per share, took place between Aug. 7 and Sept. 13, CDP said.

$1 = 0.7748 euros Reporting By Stephen Jewkes; Editing by Steve Orlofsky

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