  In this paper, a compact third-order gas-kinetic scheme is proposed for the
compressible Euler and Navier-Stokes equations. The main reason for the
feasibility to develop such a high-order scheme with compact stencil, which
involves only neighboring cells, is due to the use of a high-order gas
evolution model. Besides the evaluation of the time-dependent flux function
across a cell interface, the high-order gas evolution model also provides an
accurate time-dependent solution of the flow variables at a cell interface.
Therefore, the current scheme not only updates the cell averaged conservative
flow variables inside each control volume, but also tracks the flow variables
at the cell interface at the next time level. As a result, with both cell
averaged and cell interface values the high-order reconstruction in the current
scheme can be done compactly. Different from using a weak formulation for
high-order accuracy in the Discontinuous Galerkin (DG) method, the current
scheme is based on the strong solution, where the flow evolution starting from
a piecewise discontinuous high-order initial data is precisely followed. The
cell interface time-dependent flow variables can be used for the initial data
reconstruction at the beginning of next time step. Even with compact stencil,
the current scheme has third-order accuracy in the smooth flow regions, and has
favorable shock capturing property in the discontinuous regions. Many test
cases are used to validate the current scheme. In comparison with many other
high-order schemes, the current method avoids the use of Gaussian points for
the flux evaluation along the cell interface and the multi-stage Runge-Kutta
time stepping technique.
