Ophir Corporation was awarded a contract by the U. S. Department of Energy, National Energy Technology Laboratory under the Project Title ''Airborne, Optical Remote Sensing of Methane and Ethane for Natural Gas Pipeline Leak Detection'' on October 14, 2002. The third six-month technical report contains a summary of the progress made towards finalizing the design and assembling the airborne, remote methane and ethane sensor. The vendor has been chosen and is on contract to develop the light source with the appropriate linewidth and spectral shape to best utilize the Ophir gas correlation software. Ophir has expanded upon the target reflectance testing begun in the previous performance period by replacing the experimental receiving optics with the proposed airborne large aperture telescope, which is theoretically capable of capturing many times more signal return. The data gathered from these tests has shown the importance of optimizing the fiber optic receiving fiber to the receiving optic and has helped Ophir to optimize the design of the gas cells and narrowband optical filters. Finally, Ophir will discuss remaining project issues that may impact the success of the project.