GAS3D2 is closely related to the 2-dimensional naturally fractured gas reservoir simulator, SUGARMD. The code is basically the same, except for the third dimension capability in GAS3D2 and the gas desorption/naturally fractured reservoir capabilities in SUGARMD. GAS3D2 may be considered to be a second generation model to the gas simulator in the code SIMPAC. Most of the general features such as dynamic dimensions, input/output formatting, and optional solution algorithms have been retained from SIMPAC. However, both speed and efficiency are much improved due to major changes in three areas. First, gas property data is handled by a simple table look-up routine in GAS3D2, as compared to the rigorous, but time consuming, polynomial and Newton-Raphson iterative technique used in SIMPAC for gas viscosity and z-factor determination. Second, the nonlinearity introduced by the quantity P/Z on the right-hand side of the final material balance equation is rigorously handled in GAS3D2 by the iteration scheme presented by van Poolen. Convergence is nearly always obtained in three to five iterations with all coefficients updated. Thus, by specifying a convergence tolerance of 1 psi, one is assured of complete coefficient updating. This permits use of much larger time-steps and also improves material balance errors. The third major improvement in GAS3D2 is the use of all implicit source terms, as mentioned earlier. This also permits larger time-steps and completely avoids oscillation problems that frequently are associated with explicit source terms. In addition to the major improvements mentioned above, three new routines have been added for bottom hole to surface pressure calculations. This is a major step in providing the capability to simulate a complete gas field operation. In fact, together with a surface pipeline model, GAS3D2 could be used for an operational study of a large gas or storage field. 9 references.