Gas compressibility factor or Z-factor for natural gas system can be determined from Standing-Katz charts using the pseudocritical gas pressure and temperatures. These charts give accurate values for Z-factors. Reservoir simulation softwares need accurate correlations to estimate the values of Z-factor; one of the well-known correlations is Dranchuk and Abou-Kassem (DAK) Correlation. This correlation gives large errors at high gas reservoir pressures, this error could be more than 100%. The error in estimating Z-factor will lead to big error in estimating all the other gas properties such as gas formation volume factor, gas compressibility, and gas in place. In this paper a new accurate Z-factor correlation has been developed using regression for more than 300 data points of measured Z-factor using matlab in addition to other data points at low pressure and temperature from Standing-Katz charts and DAK correlation. Old correlations give good estimation of Z-factor at low gas reservoir pressures below 41.37 MPa (6000 psia), at high pressures the error started to appear. The developed correlation is a function of pseudoreduced pressure and temperature of the gas which makes it simpler than the existing complicated correlations. The new correlation can be used to determine the gas compressibility factor at any pressure range especially for high pressures the error was less than 3% compared to the measured data. The developed correlation is very simple to be used, it just needs the gas specific gravity that can be used to determine the pseudocritical properties of the gas and at last the Z-factor can be determined. A new formula of reduced gas compressibility was developed based on the developed Z-factor correlation which in turn can be used to determine the gas compressibility.