The project, initiated under a heads of agreement between the two companies in 2011 was to be run as a stand-alone joint venture, 80% in favour of Qatar Petroleum.
The pair have stopped all work and elected not to proceed with the facility due to high capital costs flagged by engineering, procurement and construction bidders.
These pressures are all the more compounded by the "current economic climate prevailing in the energy industry", Shell said.
The facility, which was intended as a world-scale ethane-based cracker and derivatives complex, entered its front-end engineering and design phase in early 2012.
The JV already has other existing partnerships, including the Pearl gas-to-liquids plant, also in Ras Laffan. Pearl is rated as the largest integrated GTL plant in the world.
The partnership also runs an LNG facility called Qatargas 4 and downstream and upstream investments in Singapore and Brazil.
