The Early Triassic Kangan Formation is the main reservoir for natural gas in SW Iran and the northern Persian Gulf and is equivalent to the Upper Khuff Formation. Analyses of the formation at the offshore Salman and Minab oilfields indicate that it is composed of 14 facies deposited in tidal flat, lagoon and oolitic barrier settings in the inner part of a carbonate ramp or platform. Vertical variations of microfacies and gamma-ray log profiles show that the formation consists of three depositional sequences (KG1-3), each consisting of transgressive and highstand systems tracts and each bounded above by a type 2 unconformity. Porosity in the Kangan Formation is dominated by fracture and intercrystalline pore types in highstand systems tract deposits. From a study of core plug porosity and permeability, ten flow units were recognized. Flow units GF1, GF5 and GF8 represent zones with similar flow and storage capacities. Flow units GF3, GF7 and GF9 were attributed to zones of higher flow capacity, and units GF2, GF4, GF6 and GF10 were interpreted as zones with higher storage capacities. In general, flow units which correspond to highstand systems tracts with grain-supported facies have enhanced reservoir qualities. These flow units are GF10, GF9, GF8 and GF7, together with the upper parts of GF5 and GF4. The best reservoir quality occurs in flow unit GF9 which is located in the HST of sequence KG3. Flow units GF1 and GF2 from sequence KG1, comprising lagoonal and tidal flat facies, have relatively poor reservoir qualities.