(Adds Hony, ENN background)
MELBOURNE, Nov 11 (Reuters) - Australia's Santos Ltd STO.AX said on Friday that Hony Capital had snapped up 2.25 percent of the oil and gas producer's shares for A$159.2 million ($121.2 million), with the Chinese private equity firm rebuilding its stake in the company.
Hony Capital, whose backers include state-sponsored Legend Holdings 3396.HK and Singapore's Temasek, earlier this year sold down an 11.7 percent stake in Santos to Chinese gas distributor ENN and at the same time took a stake in ENN.
"Santos has made enquiries with Hony Capital this morning who have confirmed that they were successful in acquiring an additional 40 million shares in Santos, increasing their interest in the company to approximately 3.2 percent," Santos said in a statement to the Australian stock exchange.
Hony paid A$3.98 a share, an 11 percent premium to Santos' closing price on Thursday, Santos said.
Hony last year bought A$500 million worth of Santos shares in an equity raising aimed at helping the Australian producer pay down debt. Santos had been hurt by sliding oil and gas prices, just as it started exporting from its Gladstone liquefied natural gas (LNG) plant.
When Hony sold most of its stake down to ENN earlier this year, it said it was looking to help drive ENN's expansion offshore. ENN is building China's first private LNG receiving terminal, due to open in 2018.
Hony Capital's spokeswoman in China was not immediately reachable to comment on its latest move.
Santos shares jumped nearly 7 percent to a high of A$3.82 on Friday, outpacing gains in the broader market.
($1 = 1.3139 Australian dollars)