Summary We present and test a new method for selection of pseudocomponents and averaging equation of state (EOS) parameters with excellent results. The new method is especially useful for compositional reservoir simulation with or without extended downstream process modeling. Introduction The main results from a compositional reservoir simulation are the production rates. Normally, these are stable oil and dry gas streams, but other streams may also be reported. The detailed description of the fluid compositions can therefore be reduced to some extent if the overall description of the fluid properties is acceptable. This is achieved by lumping the components into component groups called pseudocomponents. This reduces the computation time and the needed memory. The traditional way to prepare a fluid model with pseudocomponents is to group them based on personal experience and parameter regression. This requires a lot of experience and continuous practice, and probably represents one of the greatest obstacles for a reservoir engineer confronted with compositional reservoir simulation for the first time. This paper presents an automatic method of selecting pseudocomponents. We will compare the new method with other existing methods that automatically group components into pseudocomponents. The existing methods used in the comparison follow.The method of mole-weighted average with components grouped to have approximately equal mole fraction.The method of mass-weighted average with components grouped to have approximately equal mass fraction.The method of Newly et al. The method of Danesh et al. is not included in the comparison because it does not use the common basic EOS parameters, and it is difficult to port the method of Danesh et al. to other computer programs.