ABSTRACT The numerical simulation of shale gas reservoirs requires transforming mathematical models into large linear equation systems, and solving large linear equation systems requires a lot of time. A novel ILU-GMRES method for solving large linear equations is presented, which treats the sub matrix discretized at nodes as the basic elements of the coefficient matrix. By combining the incomplete LU decomposition method (ILU) with the generalized minimum residue method (GMRES), the discretized large linear equations are iteratively solved. A comparison was made between the new method and other methods for calculating the actual shale gas reservoir model. The results reveal that the new method has a faster calculation speed in solving linear equation systems. The calculation time of the novel ILU-GMRES method is 1029s, the calculation time of the generalized minimum residual method (GMRES) method is 2709s, the calculation time of the Gauss–Seidel method (GS) is 3786s, and the calculation time of the successive over relaxation method (SOR) method is 3386s, the calculation time of the preprocessing conjugate gradient method (PCG) is 3115s. The calculation speed of the novel method is almost 2.6 times faster than the GMRES method, the novel method is more effective in the numerical simulation of shale gas.