Gas drainage is an integrated strategy in gassy seams to establish a safe mining environment, extract coal seam gas and reduce fugitive gas emissions. Since conventional gas drainage techniques present poor performances in low permeability seams with longer drainage lead time, and therefore causing delays in mine development and mining schedules, a more promising technique of enhanced gas recovery was trialed and improved for better performance. Compared with nitrogen (N2), carbon dioxide (CO2) has a higher sorption capacity in coal seams and a large volume of anthropogenic CO2 can be stored as a potential injectant in unminable coal seams and thus reduce the greenhouse gas effect. However, CO2 injection maybe less favorable for gas management and safe mining of gassy coal seams in underground mines. A range of properties and operational conditions affect the performance of the enhanced gas drainage process. The micro-structure characteristics of a coal sample from an Australian gassy coal mine were analysed using Field Emission Scanning Electron Microscopy (FESEM). The results show that the micro-fissures between the matrixes are extremely narrow and tight which is one of the key intrinsic causes of low seam permeability. Coal permeability in relation to effective stress change and gas diffusion mechanism was analyzed and adopted in the gas reservoir simulator, SIMED II, which allows the investigation of enhanced gas drainage processes involving the injection of nitrogen into coal seams. Four key factors involved in this process, including injection bottom hole pressure (BHP), production hole pressure, borehole spacing and diameter, were studied to optimize the enhanced gas drainage parameters. The simulation results show that methane content was reduced from 11.9 m3/t to less than 6.6 m3/t, and the methane recovery rate was greater than 78% within a gas drainage lead time of 180 days. It can be concluded that enhanced gas drainage with nitrogen injection is a prominent strategy for extracting methane resources and creating safe mining environment in low permeability gas reservoirs.