Gas production from low-permeability shale formations relies on natural or man-made fractures for gas flow pathways to production wells. Shale gas reservoir simulation includes fracture-matrix flow and fracture-matrix interactions as they are key. Attention has focused on modeling fractures in shale gas production, yet there have been few studies carried out to address how to accurately simulate fracture-matrix interaction in unconventional low-permeability gas reservoirs. The classic double porosity model and the MINC method represent studies designed to accurately simulate fracture-matrix interaction; however, methods continue to encounter issues causing them to fall short of the accuracy sought. Applicability of the classic double porosity model with a constant shape factor to low-permeability reservoir simulation is questionable and has not been validated as the required pseudo-steady-state flow condition timing may not sufficiently satisfy shale gas reservoirs. The MINC method treats inter-porosity flow in a fully transient mode by further subdividing individual blocks with a number of 1-D nested meshes. The MINC concept, however, assumes that fracture-matrix flow is controlled only by the distance to the nearest fracture surrounding the matrix block and is shown to be no longer applicable after the early rapid transient period of fracture-matrix flow. A comparative investigation of commonly used fractured reservoir simulation approaches for applicability to fracture-matrix interaction in unconventional reservoirs is presented in this paper. A new nested subdividing concept, referred to as the Schwarz-Christoffel conformal mapping approach, will be introduced. The new method is able to accurately and efficiently simulate thematrix-fracture interaction for the entire transient flow by combining the MINC and Schwarz-Christoffel conformal mapping concepts of gridding inside the matrix. The theoretical development, benchmarking, and application of the new modeling approach explanations follow.