This report outlines progress in the fourth quarter of the second year of the DOE project ?High Resolution Prediction of Gas Injection Process Performance for Heterogeneous Reservoirs?. In this report we document accomplishments in two areas of the current research project. First we describe results from an experimental study on the effects of interfacial tension (IFT) on three-phase relative permeability's. Phase equilibrium measurements for a system containing water, hydrocarbon and two alcohols are reported. Furthermore, the effect of salinity on the three-phase regions is reported. Secondly we report on the progress related to incorporating gravity effects into compositional streamline simulation.