The contracts for building the Corrib gas terminal in Mayo and the laying of a sub-aquatic gas pipeline have been cancelled because planning permission for the terminal was refused.
More than 500 jobs were to be created during the 18-month construction phase of the project, with 50-65 permanent jobs at the gas terminal.
The terminal was planned at Bellanaboy, Co Mayo, by Enterprise Energy Ireland Ltd, on behalf of Shell, Marathon Petroleum and Statoil, to clean gas from the Corrib field.
The Corrib field is located some 70 km off the Mayo coast, 3,500 metres below sea-level, and was discovered by Enterprise Oil in October 1996.
An Bord Pleanála refused planning permission for the terminal in April after a planning permit, granted by Mayo County Council, was appealed by individuals and groups.
Concerns were raised over the re-siting of 600,000 cubic metres of peat on the proposed terminal site.
The Bord Pleanála appeal was the longest oral hearing in the history of the State, running for more than 20 days.
Last year, Enterprise Energy Ireland awarded the three principal contracts, valued at €360 million, for both the onshore and offshore development of the Corrib gas field.
The cost of the project was estimated at over €840 million, of which €220 million was spent in exploration and planning for development.
The equipment was to be installed on the sea-bed and operated remotely from the onshore gas terminal.
A spokesman for Shell/Enterprise Energy said that all the contracts had been cancelled and had been subject to planning permission.
He added that the company was still reviewing its position in relation to the future of the Corrib field following the refusal of a planning permit.
Meanwhile, the future of a proposed gas-fired electricity plant, planned by Rolls Royce Power Ventures at Bellacorrick, Co Mayo, is also unclear.
The 68-megawatt plant would produce enough power for the whole of Co Mayo and would create 130 jobs during the construction and up to 60 direct and indirect jobs during operation.
The ESB peat-run power station at Bellacorrick is due to close at the end of next year, with the loss of over 150 jobs.