July 22 (Reuters) - Australia's Woodside Energy ( WDS )

said on Monday it had agreed to buy U.S. liquefied natural gas

developer Tellurian, including its U.S. Gulf Coast

Driftwood LNG export project, for $1.2 billion including debt.

The agreement could strengthen the United States' position

as the world's largest producer of the superchilled gas by

securing the completion of Tellurian's 27.6 million metric ton

per annum facility in Lake Charles, Louisiana.

The transaction includes the $900 million cash purchase of

outstanding Tellurian common stock at $1 per share, Woodside

said in a statement, representing a more than 75% premium to

Tellurian's last closing price.

The deal gives the Australian firm access to a fully

authorised project in the U.S. amid difficulties for other LNG

developers to advance proposals due to President Joe Biden

administration's pause on approvals for new LNG exports to

countries that do not have free trade agreements with the U.S.

The acquisition "positions Woodside to be a global LNG

powerhouse," said the company's CEO, Meg O'Neill.

The transaction adds a scalable U.S. LNG development

opportunity to Woodside's existing 10 million metric tons a year

of equity LNG in Australia, she added.

The agreement will also help solve Tellurian's financial

woes. The U.S. company has been searching for financial partners

to fund the Driftwood LNG facility. In May, it said it would

sell its upstream assets to pay off some of its debt.

The Driftwood LNG project has had many setbacks, including

the cancellation of some LNG supply deals amid concerns over the

company's ability to finish the project.

In a letter on Sunday urging shareholders to accept the

offer, Tellurian Executive Chairman Martin Houston said the deal

was in the company's best interests because it would be

difficult to raise the billions required to build the plant

without a commitment from long-term customers for all of the

project's output.

"Equity providers are now less inclined to take risk ahead

of projects being fully contracted," Houston told shareholders.

Tellurian's ability to get immediate cash from the sale was

also a reason he gave for supporting the offer.

Woodside said it was aiming for the project to be ready for

a final investment decision for phase 1 from the first quarter

of 2025.

"Woodside expects to leverage its global LNG expertise

to unlock this fully permitted development and expand its

relationship with Bechtel, which is the EPC (engineering,

procurement and construction) contractor for both Driftwood LNG

and our Pluto Train 2 project in Australia," Woodside said.