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VILNIUS, July 10 (Reuters) - Power companies plan to lay a new electricity cable between Lithuania and Sweden across the bottom of the Baltic Sea by 2016 at a cost of up to 738 million euros ($1.03 billion), Lithuania's electricity company said on Friday.
It said in a statement that a memorandum of understanding had been signed on the NordBalt project on Thursday by power companies Lietuvos Energija of Lithuania, Latvenergo of Latvia and Svenska Kraftnat of Sweden.
"Due to be completed in spring 2016, the project aims at building an intersystem link -- a cable of approximately 350 km (218 miles) in length across the bottom of the Baltic Sea," it said.
Converter stations to connect the electric power transmission systems of Lithuania and Sweden were also planned.
It said the cost of the project would be between 516-738 million euros.
Lithuania and the other Baltic states see the project as a way of diversifying from energy dependence on Russia.
Latvia and Lithuania had argued about which of them should host the eastern end of the cable but they agreed in April it should start from Lithuania.
They are currently connected to Western markets only via a link between Estonia and Finland. Another power link between Lithuania and Poland is also planned. (Editing by Anthony Barker)