Methane hydrates, widely found in permafrost and deep marine sediments, have great potential as a future energy source. Conventional production schemes perform poorly for challenging hydrate reservoirs with low permeability. We propose an efficient production scheme by combining hydraulic fracturing from horizontal wells and hot water circulation through fractures. A fully coupled thermo-hydro-chemical (THC) model is developed to simulate the key physical processes during gas production from a hydrate reservoir representative of typical geological settings in Shenhu, South China Sea. We found that the gas production process has two distinct stages divided by thermal breakthrough: a relatively short prebreakthrough stage and a postbreakthrough stage yielding stable gas production. Heat advection along and near the hydraulic fracture dominates the prebreakthrough stage, whereas conduction-driven thermal recovery in the volume around fractures dominates the postbreakthrough stage. We identified that the steady-state injection temperature has a strong effect on the performance of the proposed scheme while the fluid mass circulation rate has a moderate impact beyond a threshold. The proposed scheme proves to be efficient and robust over a range of reservoir conditions with respect to initial hydrate saturation and intrinsic permeability, including their spatial heterogeneities, thereby offering a promising solution for challenging reservoir conditions.