Abstract The permeability is one of the most fundamental properties of any reservoir rock required for modeling hydrocarbon production. However, the shale permeability has not yet been fully understood because of the complexities involved in modeling flow through nanoscale throats. Here, we analyze the effects of adsorbed layers of CH4 and of gas slippage at pore walls on the flow behavior in individual conduits of simple geometry and in networks of such conduits. The network is based on the scanning electron microscopy image and drainage experiment of shale. To represent the effect of adsorbed gas, the effective size of each throat in the network depends on the pressure. The hydraulic conductance of each throat is determined based on the Knudsen number (Kn) criterion. The combined effects of adsorption and slip depend strongly on pressure and on conduit diameter. The results indicate that laboratory measurements made with N2 at ambient temperature and 5 MPa pressure, which is typical for transient pulse decay method, overestimate the gas permeability at early life of production by a factor of 5. This ratio increases if the measurement is run at ambient condition since the low pressure enhances the slippage and reduces the thickness of adsorbed layer. Moreover, the permeability increases nonlinearly as the in-situ pressure decreases during production. This effect contributes to mitigating the decline in production rate of shale gas wells.