Abstract: The temperature and pressure conditions of the shallow deposits in the Huaguang Depression meet well the requirements for natural gas hydrate accumulation. There the maximum thickness of the biogenic methane hydrate stable zone is about 320m, while the maximum thickness of the thermogenic gas hydrate stable zone is about 345m. Gas source rocks occur mainly in the rifting-stage sequence in the western part of the Huaguang Depression, in which there are two stages of hydrocarbon generation, with the later one dominating. It is favorable for the thermogenic natural gas to accumulate in the hydrate stability zone. Since Late Miocene, the rapid deposition of mudstone provided sufficient organic matters for the formation of biogenic gas. Mud diapirs, associated faults and polygonal faults constitute the main fluid migration system for natural gas hydrate accumulation. The western area close to the fault No. 1 is a favorable exploration target. The rapid subsidence since Late Miocene made the Oligocene hydrocarbon source rocks possible to produce a large amount of natural gas, and the overpressure formed by undercompaction provided a powerful driving force for the migration of gas bearing fluid. Thus the thermogenic and biogenic natural gas migrated upwards along mud diapirs and polygon faults to the hydrate stable zone, and eventually formed gas hydrate deposits there. The deep water turbidite channel is doubtlessly a favorable target for exploration of highly saturated hydrate.