The goal of this study is to develop a new model to simulate gas and water transport in shale nanopores and complex fractures. A new gas diffusivity equation was first derived to consider multiple important physical mechanisms such as gas desorption, gas slippage and diffusion, and non‐Darcy flow. For complex fractures, a state‐of‐the‐art embedded discrete fracture model (EDFM) was implemented. Numerical model is verified against a commercial reservoir simulator for shale gas simulation with multiple planar fractures. After that, a series of simulation studies was performed to investigate the impacts of complex gas transport mechanisms and various fracture geometries on well performance. The critical parameters controlling well performance are identified. The simulation results reveal that modeling of gas production from complex fractures as well as modeling important gas transport mechanisms in shale gas reservoirs is extremely significant. © 2018 American Institute of Chemical Engineers AIChE J, 64: 2251–2264, 2018