Australia's Woodside Energy said on Monday it had agreed to buy US liquefied natural gas developer Tellurian, including its US 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 a year 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 US 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 US.

The acquisition "positions Woodside to be a global LNG powerhouse," said the company's CEO, Meg O'Neill.

The transaction adds a scalable US LNG development opportunity to Woodside's existing ten-million metric tons a year of equity LNG in Australia, she added.

The agreement will also help solve Tellurian's financial woes. The US 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.

Houston said the Board's decision to recommend the sale of the Driftwood project was unanimous as it was felt that cash in hand was better than the uncertainty of the project.

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.

Saul Kavonic, an energy analyst at MST Marquee, said this is the right kind of acquisition that Woodside should be pursuing, versus an earlier attempted deal to merge with Australian firm Santos.

"It is leveraging Woodside's LNG expertise to access financially distressed yet otherwise advantaged LNG assets at good price, which Woodside can add real value to," he said, adding Woodside can bring Driftwood forward better than Tellurian.

"Woodside can remedy marketing relationships, funding, and operator capability deficits Tellurian suffered from to add value here. A lot of potential LNG buyers and acquirers of Tellurian were put off engaging due to former Tellurian management history. Woodside owning the asset it will remedy this."

At the start of the year, Woodside and Santos had been in merger talks but discussions fell apart as the two companies could not agree on a valuation level.