In November 2008, gas hydrate samples were recovered during the scientific expedition conducted in the Qllian Mountain Permafrost. It is expected that this area will become a strategic area of gas hydrate production in China. However, the evaluation of the hydrate deposits in the area as a potential energy resource has not been completed. Using numerical simulation and currently available data from site measurements, we preliminarily estimate the gas production potential of these hydrate reservoirs. The cumulative volume of the produced CH4 at the well in the early production period (0-10 years) is more than 50% of the total gas production from the well. The gas hydrate dissociation mainly occurs in the vicinity of the horizontal well and along a cylindrical interface. There is a ringlike structure of ice around the horizontal well during the gas production process. With the decrease of the gas production rate, the ice starts to melt from the bottom to the top under the influence of the geothermal gradient. The sensitivity analysis demonstrates the dependence of production on the intrinsic permeability and the initial deposit temperature. Economic assessment based on the cumulative volumetric gas production and the gas-to-water ratio indicates that it is not economically viable to produce gas from this hydrate deposit using single horizontal well by depressurization.