Methane gas hydrates, crystalline inclusion compounds formed from methane and water, are found in marine continental margin and permafrost sediments worldwide. This article reviews the current understanding of phenomena involved in gas hydrate formation and the physical properties of hydrate‐bearing sediments. Formation phenomena include pore‐scale habit, solubility, spatial variability, and host sediment aggregate properties. Physical properties include thermal properties, permeability, electrical conductivity and permittivity, small‐strain elastic P and S wave velocities, shear strength, and volume changes resulting from hydrate dissociation. The magnitudes and interdependencies of these properties are critically important for predicting and quantifying macroscale responses of hydrate‐bearing sediments to changes in mechanical, thermal, or chemical boundary conditions. These predictions are vital for mitigating borehole, local, and regional slope stability hazards; optimizing recovery techniques for extracting methane from hydrate‐bearing sediments or sequestering carbon dioxide in gas hydrate; and evaluating the role of gas hydrate in the global carbon cycle.

The water retention curve and relative permeability are critical to predict gas and water production from hydrate‐bearing sediments. However, values for key parameters that characterize gas and water flows during hydrate dissociation have not been identified due to experimental challenges. This study utilizes the combined techniques of micro‐focus X‐ray computed tomography (CT) and pore‐network model simulation to identify proper values for those key parameters, such as gas entry pressure, residual water saturation, and curve fitting values. Hydrates with various saturation and morphology are realized in the pore‐network that was extracted from micron‐resolution CT images of sediments recovered from the hydrate deposit at the Mallik site, and then the processes of gas invasion, hydrate dissociation, gas expansion, and gas and water permeability are simulated. Results show that greater hydrate saturation in sediments lead to higher gas entry pressure, higher residual water saturation, and steeper water retention curve. An increase in hydrate saturation decreases gas permeability but has marginal effects on water permeability in sediments with uniformly distributed hydrate. Hydrate morphology has more significant impacts than hydrate saturation on relative permeability. Sediments with heterogeneously distributed hydrate tend to result in lower residual water saturation and higher gas and water permeability. In this sense, the Brooks‐Corey model that uses two fitting parameters individually for gas and water permeability properly capture the effect of hydrate saturation and morphology on gas and water flows in hydrate‐bearing sediments.