Methane hydrate (MH) is one of the potential resources of natural gas. We have developed a numerical model for MH dissociation process in porous media to analyze the physical phenomena in a MH reservoir and predict gas production behavior during MH dissociation. Absolute permeability and. relative permeability with MH formation were formulated with our experimental results and introduced into the simulator. Then, MH reservoir model in the adjacent Sea of Japan was constructed on the basis of the results of the preliminary drilling 2003 in Nankai trough area. Using this simulator, some field, scale simulation run for depressurization process was carried out to discuss the effect of absolute permeability, relative permeability and MH saturation on MH dissociation and gas production behavior.