Alexei Miller, the chairman of the Russian gas giant, led a delegation to the western city of Vyborg to launch construction of the compressor station for Nord Stream.
"We have started building the last facility of the onshore section of the Nord Stream gas pipeline," he said. "We will launch construction of the offshore section this spring."
Gazprom described the compressor station as "unparalleled" in terms of gas transmission distance, dehydration volume and working pressure.
Nord Stream will stretch 745 miles through the Gulf of Finland and the Baltic Sea to Germany. The project, along with South Stream, is part of an effort by Russia to diversify its European transit options.
Germany on Dec. 22 granted its first Nord Stream permit for a 31-mile offshore leg, leaving Finland the only member nation that has not granted approval for the natural gas pipeline.
The $11.1 billion Nord Stream pipeline has an estimated capacity of about 1.9 trillion cubic feet per year. Construction is slated for April.
Gazprom leads the Nord Stream consortium along with Germany's E.ON Ruhrgas and BASF-Wintershall.
Notable deaths of 2014 [PHOTOS]
EIA: Russia diversifying energy production