In this study we provide evidence for methane hydrates in the Taranaki Basin, occurring a considerable distance from New Zealand's convergent margins, where they are well documented. We describe and reconstruct a unique example of gas migration and leakage at the edge of the continental shelf, linking shallow gas hydrate occurrence to a deeper petroleum system. The Taranaki Basin is a well investigated petroleum province with numerous fields producing oil and gas. Industry standard seismic reflection data show amplitude anomalies that are here interpreted as discontinuous BSRs, locally mimicking the channelized sea-floor and pinching out up-slope. Strong reverse polarity anomalies indicate the presence of gas pockets and gas-charged sediments. PetroMod™ petroleum systems modelling predicts that the gas is sourced from elevated microbial gas generation in the thick slope sediment succession with additional migration of thermogenic gas from buried Cretaceous petroleum source rocks. Cretaceous–Paleogene extensional faults underneath the present-day slope are interpreted to provide pathways for focussed gas migration and leakage, which may explain two dry petroleum wells drilled at the Taranaki shelf margin. PetroMod™ modelling predicts concentrated gas hydrate formation on the Taranaki continental slope consistent with the anomalies observed in the seismic data. We propose that a semi-continuous hydrate layer is present in the down-dip wall of incised canyons. Canyon incision is interpreted to cause the base of gas hydrate stability to bulge downward and thereby trap gas migrating up-slope in permeable beds due to the permeability decrease caused by hydrate formation in the pore space. Elsewhere, hydrate occurrence is likely patchy and may be controlled by focussed leakage of thermogenic gas. The proposed presence of hydrates in slope sediments in Taranaki Basin likely affects the stability of the Taranaki shelf margin. While hydrate presence can be a drilling hazard for oil and gas exploration, the proposed presence of gas hydrates opens up a new frontier for exploration of hydrates as an energy source.