This report describes research carried out in the Department of Petroleum Engineering at Stanford University from September 1998 - September 1998 under the third year of a three-year Department of Energy (DOE) grant on the ''Prediction of Gas Injection Performance for Heterogeneous Reservoirs''. The research effort is an integrated study of the factors affecting gas injection, from the pore scale to the field scale, and involves theoretical analysis, laboratory experiments and numerical simulation. The research is divided into four main areas: (1) Pore scale modeling of three-phase flow in porous media; (2) Laboratory experiments and analysis of factors influencing gas injection performance at the core scale with an emphasis on the fundamentals of three-phase flow; (3) Benchmark simulations of gas injection at the field scale; and (4) Development of streamline-based reservoir simulator.