Hydrolyzes fatty acids from S-acylated cysteine residues in proteins. Has depalmitoylating activity towards nras. H2O + S-hexadecanoyl-L-cysteinyl-[protein] = H(+) + hexadecanoate + L-cysteinyl-[protein] Palmitoylated on cysteine residues located in a cysteine cluster at the N-terminus which promotes membrane localization. Belongs to the AB hydrolase superfamily. ABHD17 family.