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UPDATE 1-Tellurian to sell LNG from Louisiana export plant to Shell

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(Adds background)

July 29 (Reuters) - U.S. liquefied natural gas (LNG) developer Tellurian Inc said on Thursday it finalized agreements to sell LNG from its proposed Driftwood export plant in Louisiana to a unit of oil major Royal Dutch Shell Plc .

Tellurian shares jumped 12.8% to $4.13 on the news.

The agreements are for 3 million tonnes per annum (MTPA) for 10 years indexed to gas prices at the Japan Korea Marker (JKM), the Asian benchmark, and the Dutch Title Transfer Facility (TTF), the European benchmark.

The Shell agreements mark the third deal Tellurian has finalized in 10 weeks, totaling 9 MTPA, which Tellurian said is nearly all the capacity of the proposed 27.5-MTPA Driftwood's first two plants.

The earlier deals - each worth about $12 billion in revenue over 10 years - were with commodity traders Vitol and Gunvor.

"With these (agreements), we have now completed the sales to support the launching of the first two plants. Tellurian will now focus on financing Driftwood, in order to give Bechtel notice to proceed with construction in early 2022," Tellurian Chief Executive Officer Octavio Simoes said in a statement.

Demand for LNG has surged in recent years as countries, including China and India, buy more of the super-cooled fuel to meet fast-growing energy needs while also weaning consumers off dirtier coal.

“LNG demand is expected to nearly double by 2040. This deal secures additional competitive volumes for our portfolio by the mid-2020s," Shell Energy Executive Vice President Steve Hill said.

Driftwood is one of more than a dozen North American LNG projects that have repeatedly pushed back decisions to start construction due primarily to an insufficient number of customers signing the long-term deals needed to finance the multibillion-dollar facilities.

But with these deals, Tellurian said it plans to start preparing the Driftwood site for construction later this summer.

(Reporting by Arunima Kumar in Bengaluru and Scott DiSavino in New York; Editing by Krishna Chandra Eluri and Steve Orlofsky)

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