Local authorities refused planning permission for the construction of a gas receival terminal at Bellanaboy Bridge in County Mayo on the North Western coast.

An Bord Pleanala (ABP) denied Shell's application on the grounds that the proposed repositories where peat and other materials excavated from the terminal site would be dumped, have a high probability of failure.

ABP said that a collapse would pose an unacceptable health risk to local people and properties and could pollute salmon-rich rivers.

First gas from the field had already been delayed from early 2004 to mid-2005 due to planning issues and the future of the project is now up in the air.

It is believed that Shell's local subsidiary will focus on changing its terminal designs or finding a new site as gas from the 25 billion cubic metres field could supply almost half of the country's needs. Around 70% of the gas used in Ireland is currently imported from Scotland.

The field was discovered in 350m of water in 1996 and the development plan has been based on using subsea production installations tied back by pipeline to the land terminal.

Enterprise Energy has a 45% stake in the field, Norway's Statoil 36.5% and Marathon International Petroleum Hibernia 18.5%.