Shell E&P Ireland has been directed to make a formal application if it wants to pull out of its legal action which led to last year's jailing of five Mayo men for 94 days.
Although the company has promised to modify the route of the onshore pipeline, part of it "may not take a different route" from the previous controversial route, the High Court was told yesterday.
Patrick Hanratty SC, for Shell E&P Ireland, told Ms Justice Mary Laffoy that some farmers had already accepted compensation to allow the pipeline go through their land.
He said the company was now engaged in a study of every alternative available.
Last week, the company's deputy managing director, Terry Nolan, conceded that the original route had not been ruled out, and any modification taking the pipeline away from Rossport could take six to 12 months.
The company wants to return to work on its terminal in advance of this - but was blocked by over 100 members of the local community earlier this week.
Mr Hanratty told the High Court that the modified route was based on a recommendation by Government mediator Peter Cassells.
He said Shell had decided to discontinue the existing legal proceedings against all defendants and had requested them in turn to discontinue their counterclaims.
The company had informed the defendants that in the event of their withdrawing their counterclaims, Shell would pay their legal costs to date.
However, in the event of counterclaims continuing by two or more defendants, it was questionable as to whether Shell would by agreement pay their costs.
Mr Hanratty said two of the defendants, Peter Sweetman and Monica Muller, had agreed to withdraw their counterclaims and he asked that Shell's claim against them be struck out on the basis that Shell would pay their legal costs.
Mr Hanratty said the remaining defendants Philip McGrath, Willie Corduff, Brendan Philbin and Brid Mc Garry had not indicated if they were agreeable to withdrawing their counterclaim.
Mr Hanratty said Shell had not complied with the court's order against it for discovery of documents because the company had decided to discontinue proceedings.
On July 31st, Ms Justice Laffoy had directed that Shell would have to produce the State's petroleum lease granted by the Minister for the Marine for the gas project.
She also directed the company to produce its plan of development for the €900 million project which it had argued was commercially sensitive.
John Rogers SC, for Willie Corduff and Philip McGrath, said the Minister had acted purely to facilitate Shell. It was "a singular act by the executive of this State to facilitate one gas provider and not to facilitate competition between a number of gas providers".
Ms Justice Laffoy adjourned two motions relating to discovery, a motion by Shell seeking directions and a motion by Shell seeking leave to discontinue the proceedings until late October.