A Massachusetts alternative energy start-up will announce Monday that it has finalized a $1.25 billion deal to build a plant in Western China to convert coal into synthetic natural gas, an agreement that underscores China’s growing hunger for power and the state’s position as a global center for energy technology.

The deal, one of the biggest yet for the state’s alternative energy industry, creates a partnership between GreatPoint Energy, a seven-year-old Cambridge company with just 30 employees, and China Wanxiang Holdings, an industrial conglomerate.