The numerical simulation of naturally fractured reservoirs is commonly based on the continuum dual-porosity concept. However, the model needs to assume that the fractures form very regular patterns, different from field observations. In order to overcome this problem, we proposed a method that can consider the characteristics of the real fracture system and developed a two-phase transient finite element method (FEM) (TENFEM) model able to implement an effective permeability tensor, The permeability tensors were estimated by using a single-phase, steady-state FEM (EPC) model also coded in this work, where Darcy's law in matrix and cubic law in fracture were adopted for considering the flow characteristics in the discrete fracture network(DFN) approach. The developed models were applied to the paludal sand reservoir of a multiwell experiment (MWX) site to demonstrate validity and applicability of the models. The estimated average permeability in the MWX is almost identical compared to the results of the well test analysis. Then the numerical simulation with the TENFEM model was performed by using the transient pressure recorded from a gas well test on the MWX V. Front the results of bottom hole pressure and pressure distribution within the system, it was noted that the model with effective permeabilities generated almost identical results against the DFN model in the aspects of the behavior and the direction of fluid propagation with pressure decline, and therefore the proposed model is considered to be more efficient in terms of the computation time as well as the required storage capacity. Also from the upscaling study, it was shown that even with fewer numbers of grid blocks the developed model could effectively describe the directional flow caused by the fracture characteristics such as orientation and density of the fracture.