In recent years, shale exploration and production becomes economic by establishing multi-stage hydraulic fracturing along horizontal wells. However, shales are different than conventional reservoirs by complex phase behaviors, fluid storage mechanisms, and flow mechanisms. In order to evaluate the shale gas reservoir behaviors, the effect of nano-pore confinement because of extremely small pore sizes is included. Critical properties are altered by the confinement effect, resulting in a gas phase behavior difference than that in conventional reservoirs. Moreover, to describe the shale gas storage mechanisms, an adsorption effect is considered. It is widely believed that without considering adsorbed gases, an under-estimation of reserves by more than 10% may happen. Additionally, in order to model the gas flow mechanisms in shale, multi-mechanistic flow regimes are applied in both matrix and fractures. Due to the nature of ultra-low permeability in the matrix, fluid flow is responding not only to a pressure gradient, but also to a concentration gradient.