Extraction of methane from natural gas hydrates whilst storing CO2 via gas replacement is a promising approach for reducing anthropogenic CO2 emissions during energy generation. In this study, molecular dynamic simulations were performed to identify the influence of temperature, pressure, and the initial CO2 concentration of sweep gas on the gas replacement characteristics. Simulations were performed under selected pressure and temperature conditions using five different initial CO2 concentrations. The simulation results clearly portray the replacement phenomena where methane molecules are released into the free gas layer while CO2 get enclathrated in hydrate structure. During gas replacement, minor structural changes in hydrate structure can also be observed, but they are quite insignificant as demonstrated through the alterations in Tetrahedrality order parameter. The variations of the number densities of gas and water molecules during gas replacement were used to quantify the methane recovery and CO2 storage. Based on the numerical comparisons, the replacement process is found to be strongly dependant on the temperature, yielding a higher methane recovery at higher temperatures; however, the CO2 storage capacity is found to be diminishing with increasing temperature. Having a higher initial CO2 concentration in the sweep gas may facilitate greater penetration of CO2 into the hydrate structure, eventually resulting in a higher methane recovery and improved CO2 storage.