The development follows three years of wrangling over the operational tariffs that would be imposed on the €1bn natural gas storage plan on the Shannon estuary.
Local Sinn Féin councillor Robert Beasley said it was a “dire day” for north Kerry, as people had been waiting for construction to start to deliver a much needed boost to employment.
“There are people who would have left the country and they stayed around in the hope that this might bring some jobs and keep them here,” he said. “This is a really black day and people are going to be horrified that this has gone.”
Mr Beasley blamed the previous and current governments for blocking the plan with bureaucracy.
Fianna Fáil’s Jimmy Moloney said the Commission for Energy Regulation was at fault for hitting Shannon LNG with a tariff for an inter-connector to Britain which it would not use.
He said the issue had dragged on and it was “very disappointing” that Shannon LNG’s parent company, Hess, had appeared to end its involvement in the plan.
Shannon LNG had previously said it would not progress the project until there was certainty from the Commission for Energy Regulation on the tariffs that were going to be levied on the new facility.
Last year, Hess lost its High Court bid for the CER’s decision to impose tariffs to be reviewed.
Shannon LNG had proposed building a storage and conversion facility for liquefied natural gas as part of a project that would initially employ 400 construction workers.
It was estimated that more than 50 people would be employed when the plant was up and running.
In a statement to the Sunday Business Post, Hess said that it was reviewing its operations and “refocusing its worldwide business to concentrate on its core activities”.
Hess is currently engaged in a cost-cutting plan and has sold off some assets. It said it was for the company itself to decide which were its core businesses.
Last week, junior minister Jimmy Deenihan told Kerry Radio there had been discussions with businesses in Qatar about potential investment in the facility. Mr Deenihan said he did not want to get hopes up, but that talks had taken place.
Mr Moloney said he hoped something could come of this and a delegation from Kerry County Council would be asking to meet with the new Energy Minister, Alex White, to discuss the situation.
The Department of Communications, Energy, and Natural Resources was not in a position to respond to the report yesterday.