Tanzania and China sign US$ 1 billion gas pipeline deal

Tanzania and China have signed a US$1 billion loan agreement to build a major natural gas pipeline in the east African country, a Tanzanian newspaper quoted the country’s energy minister as saying on Friday.

The pipeline will run from Mnazi Bay in Mtwara Region and Songo Songo in Kilwa District to the capital, Dar es Salaam.

The deal comes in as fresh efforts to unlock the gas potential in the southern coast of the Tanzania. It is anticipated that additional gas will help to alleviate the energy problems currently being faced by the nation.The minister for Energy and Minerals, Mr William Ngeleja, told reporters yesterday that the signing of the agreement was conducted in Beijing, China, on Monday.

Construction of the 532km pipeline would start from mid next month. The whole project is expected to be completed by late March, 2013. The loan would also finance the construction of the two gas processing plants.Mr Ngeleja noted that the soft loan would be paid in 20 years with first payment starting after seven years.