British Gas and the US energy group KeySpan have abandoned plans to build a North-South gas link, it is understood.
Their departure from the Irish market follows the Government's decision last month to sanction Bord Gais to construct a £220 million (€279 million) interconnector parallel to its existing link with Scotland.
Premier Transmission, the consortium controlled by British Gas and KeySpan, is understood to have no interest in investing in that project.
Approval of the project was subject to Bord Gais accepting private-sector investment in the pipeline in the form of a public-private partnership.
It was assumed the cross-Border dimension of the Premier project would secure political support. It subsequently emerged, however, that Bord Gais had separate plans to supply the market in Northern Ireland.
The State company has entered discussions with the Department of Enterprise, Trade and Investment in the North on the possibility of constructing a pipeline linking Dublin and Derry, via Craigavon and Belfast.
Such a pipeline would supply a power generation plant at Coolkeeragh, Co Derry, which is planned by the ESB. The company is discussing the project in partnership with US pipeline company Questar.
Premier's move was expected. Industry observers believe an alternative supply from the new interconnector would stifle any demand for gas it planned to import.
The group suspended preliminary engineering work on its project last autumn. It sought to build a bespoke pipeline, tailored to its customers' requirements, but failed to secure firm contractual commitments from prospective customers.
Premier is the latest group to leave the Republic's energy market, which is liberalising slowly.
In January, the British oil multinational BP Amoco decided to sell its stake in a west Dublin power station it planned with a US-controlled group, Ireland Power, and ePower, a group led by Esat founder Mr Denis O'Brien. EPower is known to be considering its position in the market.
It earlier acquired its stake in that project from Scottish Power, which also left the Irish market. Industry figures believe BP paid £3-£6 million to enter that project.
Also last year, the Irish building materials group CRH decided to sell its 50 per cent stake in a power project to its joint venture partner it developed with Viridian, the Northern Ireland group.
