Tanzania’s government has signed a loan agreement for more than $1 billion with the Chinese government to construct a natural gas pipeline from Mnazi Bay in Mtwara Region and Songo Songo in Kilwa district to the capital Dar es Salaam.

Tanzania’s Minister for Energy and Minerals William Ngeleja said that the loan agreement was signed in Beijing.

The loan will be used to exploit Tanzania’s southern coastal natural gas reserves, Dar es Salaam’s The Citizen newspaper reported.