Methane hydrate, molecular model. Methane hydrate consists of a molecule of methane (grey and white, centre), surrounded by a cage of water molecules (red and white). The whole structure is known as a clathrate. It is found in the very cold and high pressure environments under the arctic permafrost and in marine sediments, where it forms a crystalline solid. It is thought there is approximately 3000 times the volume of methane in hydrates than in the atmosphere, making it a huge potential energy source.