China and Nigeria have agreed Wednesday to build a $ 12 billion railway along Nigeria's coast, China's largest overseas project.

China Railway Construction Corporation Limited (CRCC) signed the contract with Nigeria's Ministry of Transport, the Xinhua News Agency reported on Thursday.

The coastal 22-stop railway, which will stretch for 1,402 kilometers, will link Nigeria's economic capital Lagos in the west with Calabar in the east.

Trains will travel at 120 kilometers per hour, according to the CRCC.

"It is a mutually beneficial project," said CRCC chairman Meng Fengchao, adding that the coastal railway project will adopt Chinese technological standards and result in equipment exports worth $4 billion, which include construction machinery, trains and steel products.

"The project will also create up to 200,000 local jobs, directly or indirectly. Up to 30,000 fixed job posts may also be provided when the railway starts operating," Meng said.

Bature Gafai, the director of Rail and Mass Transit of Nigeria's Ministry of Transport, said the coastal railway "is vital for the development of Eastern Economic Corridor."

"The railway will substantially promote the export of petroleum products … and drive the economic growth in the whole West African region," Gafai was quoted by the People's Daily as saying on May 8 when both sides signed a framework contract for the project.

Earlier this month, Mexico abruptly revoked a $4.4 billion high-speed railway deal with the Chinese-led consortium, including CRCC and CSR Corporation Limited, as "doubts and concerns have emerged among the public."

"Such incidents are unlikely to happen this time around, as Nigeria and China maintain a friendly relationship, and China has helped the African nation in training railway management personnel every year as well as collaborated with it in other projects," said Wang Mengshu, a member of the Chinese Academy of Engineering, on Thursday.