Bottom simulating reflectors (BSR) are associated with the base of the stability zone of methane hydrates. The occurrence, stability and breakdown of these BSRs is considerably dependent on the temperature and pressure conditions in the sediment. Any P-T changes can affect the hydrate stability significantly and thus influence the behavior of the BSRs. I present the theory and development of a three-dimensional finite-difference fluid-flow simulator for hydrate decomposition/growth in porous media. I derive the equation for a 3-phase/2-component isothermal gas-water-hydrate system and discuss the code development of a two-dimensional system. The code is still in a test phase and is not working properly for all required cases. I show the results of some preliminary code testing based on simple gas-water flow. Furthermore, I discuss how to include more realistic thermodynamics into the system.