Russian President Dmitry Medvedev on Friday attended a ceremony near the Finnish border to celebrate the beginning of construction work on the Nord Stream gas pipeline.
The 7.4-billion-euro (9.9 billion dollars) pipeline will from 2011 transport Russian gas to Europe, which the European Union hopes will help to ensure the bloc's future energy security.
Former German chancellor Gerhard Schroeder, chairman of Nord Stream's board, also took part in the ceremony at Portovaya Bay.
German Chancellor Angela Merkel welcomed the beginning of construction work on the pipeline, which she described as "one of the largest energy infrastructure projects of our time."
"With this, the European Union and Russia aim to forge an additional strong connection," the chancellor said in a video broadcast from Berlin.
Merkel said the project would benefit both partners, offering Europe "an important contribution to the security of gas provision," whilst providing Russia with "high stability in the demand for gas."
Nord Stream said that the first three kilometers of the pipeline, which will eventually stretch 1,220 kilometers under the Baltic Sea to Greifswald in northern Germany, had already been laid near the Swedish island of Gotland.
Three specially commissioned ships will be responsible for laying the pipeline. The Castoro 6 is already on the job and in June will be joined by the Castoro 10, which will be based off the coast of Germany. In September the Solitaire will start work in the Gulf of Finland.
If all goes to plan, the pipeline will transport 27.5 billion cubic meters of gas per year. Capacity will double in the following year when a second leg of the pipeline is due to be laid.
The gas should be enough to power an estimated 26 million households.
Environmental groups have raised concerns, saying the pipeline would have adverse effects on the environment.
Medvedev addressed these worries in his speech but said the demand for energy in Europe was growing and the pipeline was one of the best ways to meet this need.
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