UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C.  20549
                                FORM 10-Q



(Mark One)
       
[ X ]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the quarterly period ended June 30, 1998

                        or

[   ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
       For the transition period from            to           

Commission file number 1-7297


                                NICOR INC.                     
           (Exact name of registrant as specified in its charter)
       
               Illinois                               36-2855175    
       (State of incorporation)                     (I.R.S. Employer
                                                  Identification No.)

           1844 Ferry Road                                     
         Naperville, Illinois                         60563-9600   
        (Address of principal                         (Zip Code)
          executive offices)
       
 
                            (630) 305-9500          
                    (Registrant's telephone number)





Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X] No [ ]
 
Shares of common stock, par value $2.50, outstanding at July 31, 1998, were  
47,751,217.

                                                                            
                                                                 



Nicor Inc.                                                         Page i   

Table of Contents

                                                                   Page
Part I.    Financial Information                                   

Item 1.    Financial Statements (Unaudited)                          1

           Consolidated Statement of Income -                        
             Three, Six and Twelve Months Ended
             June 30, 1998 and 1997                                  2

           Consolidated Statement of Cash Flows -                    
             Six and Twelve Months Ended
             June 30, 1998 and 1997                                  3

           Consolidated Balance Sheet -                              
             June 30, 1998 and 1997, and
             December 31, 1997                                       4

           Notes to the Consolidated Financial Statements            5

Item 2.    Management's Discussion and Analysis of                   
             Financial Condition and Results of 
             Operations                                              7

Part II.   Other Information

Item 1.    Legal Proceedings                                        13

Item 4.    Submission of Matters to a Vote of
             Security Holders                                       13

Item 6.    Exhibits and Reports on Form 8-K                         14

           Signature                                                15

           Exhibit Index                                            16




Selected Terms:
             
Ill.C.C. - Illinois Commerce Commission.
Mcf, Bcf - Thousand cubic feet, billion cubic feet.
TEU - Twenty-foot equivalent unit.
Degree days - The extent to which the daily average
              temperature falls below 65 degrees
              Fahrenheit.
                                                                   





Nicor Inc.                                                         Page 1  

PART I - Financial Information

Item 1.  Financial Statements

       The following condensed unaudited financial statements of
       Nicor Inc. have been prepared by the company pursuant to the rules
       and regulations of the Securities and Exchange Commission (SEC). 
       Certain information and footnote disclosures normally included in
       financial statements prepared in accordance with generally accepted
       accounting principles have been condensed or omitted pursuant to
       SEC rules and regulations.  The condensed financial statements
       should be read in conjunction with the financial statements and the
       notes thereto included in the company's latest Annual Report on
       Form 10-K.

       The information furnished reflects, in the opinion of the company,
       all adjustments (consisting only of normal recurring adjustments)
       necessary for a fair statement of the results for the interim
       periods presented.  Because of seasonal and other factors, the
       results for the interim periods presented are not necessarily
       indicative of the results to be expected for the full fiscal year.





<TABLE>
Nicor Inc.                                                                                      Page 2 

Consolidated Statement of Income (Unaudited)
(Millions, except per share data)
<CAPTION>
                                    Three months ended       Six months ended     Twelve months ended
                                         June 30                 June 30                June 30       
                                     1998      1997          1998      1997         1998        1997  

<S>                                <C>       <C>           <C>       <C>          <C>         <C>
Operating revenues                 $  271.3  $  303.7      $  833.6  $1,203.7     $1,622.6    $2,017.0

Operating expenses
  Cost of gas                          96.1     122.8         414.3     755.7        822.8     1,198.5  
  Operating and maintenance            82.1      81.9         164.2     162.6        341.9       336.2
  Depreciation                         23.6      23.0          77.0      75.2        133.1       129.8
  Taxes, other than income taxes       20.6      23.4          64.2      84.4        107.0       127.7 
                                      222.4     251.1         719.7   1,077.9      1,404.8     1,792.2

Operating income                       48.9      52.6         113.9     125.8        217.8       224.8

Other income (expense)
  Interest income                        .7       1.2           1.2       1.7          2.5         2.3
  Other, net                            4.2       1.2           7.3       2.9         17.7         6.7
                                        4.9       2.4           8.5       4.6         20.2         9.0

Income before interest on debt
  and income taxes                     53.8      55.0         122.4     130.4        238.0       233.8

Interest on debt, net of 
  amounts capitalized                  10.4      10.5          23.5      23.8         48.8        49.3

Income before income taxes             43.4      44.5          98.9     106.6        189.2       184.5

Income taxes                           14.9      15.8          34.2      37.4         65.8        65.1

Net income                             28.5      28.7          64.7      69.2        123.4       119.4

Dividends on preferred stock             .1         -            .2        .2           .3          .3 

Earnings applicable to
  common stock                     $   28.4  $   28.7      $   64.5  $   69.0     $  123.1    $  119.1

Average shares of                    
  common stock                         
    Basic                              47.9      48.8          48.0      49.1         48.2        49.4
    Diluted                            48.2      49.0          48.2      49.2         48.4        49.6

Earnings per average share          
  of common stock
    Basic                          $    .59  $    .59      $   1.34  $   1.41     $   2.55    $   2.41
    Diluted                             .59       .58          1.34      1.40         2.54        2.40
 
Dividends declared per share
  of common stock                  $    .37  $    .35      $    .74  $    .70     $   1.44    $   1.36

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>
 





<TABLE>
Nicor Inc.                                                                                         Page 3 

Consolidated Statement of Cash Flows (Unaudited)
(Millions)
<CAPTION>
                                                                    Six months ended     Twelve months ended
                                                                         June 30                June 30     
                                                                    1998        1997       1998        1997 

Operating activities
  <S>                                                             <C>         <C>        <C>         <C>
  Net income                                                      $  64.7     $  69.2    $ 123.4     $ 119.4
  Adjustments to reconcile net income to net cash flow
    provided from operating activities:
      Depreciation                                                   77.0        75.2      133.1       129.8
      Deferred income tax expense (benefit)                           9.4        (6.3)       1.4         6.0
      Change in working capital items and other:
        Receivables, less allowances                                193.1       162.7       15.8        (6.6)
        Gas in storage                                              111.6       104.0       11.4         6.0
        Deferred/accrued gas costs                                   (8.1)       83.4      (15.3)       65.5
        Accounts payable                                            (11.5)      (83.7)     (19.8)        7.8
        Temporary LIFO liquidation                                   24.2        56.6      (32.4)       44.6 
        Other                                                       (41.2)        2.7      (51.1)      (15.8)
    
  Net cash flow provided from operating activities                  419.2       463.8      166.5       356.7

Investing activities
  Capital expenditures                                              (52.7)      (46.8)    (118.9)     (113.9)
  Short-term investments                                             (5.7)      (12.3)       (.9)      (13.8)
  Other                                                              (7.6)       (4.9)      (1.2)       (4.8)

  Net cash flow used for investing activities                       (66.0)      (64.0)    (121.0)     (132.5)
   
Financing activities
  Net proceeds from issuing long-term debt                           99.1        49.7      148.5       124.0
  Disbursements to retire long-term debt                           (104.5)      (25.0)    (157.1)      (25.0)   
  Short-term borrowings (repayments), net                          (278.9)     (292.0)         -      (118.2)
  Dividends paid                                                    (34.8)      (33.7)     (68.9)      (66.9)
  Disbursements to reacquire stock                                  (17.0)      (30.6)     (35.8)      (61.4)   
  Other                                                               (.1)          -        1.3         5.4
  
  Net cash flow used for financing activities                      (336.2)     (331.6)    (112.0)     (142.1)

Net increase (decrease) in cash and cash equivalents                 17.0        68.2      (66.5)       82.1

Cash and cash equivalents, beginning of period                        5.2        20.5       88.7         6.6

Cash and cash equivalents, end of period                          $  22.2     $  88.7    $  22.2     $  88.7

Supplemental information
  Income taxes paid, net of refunds                               $  23.1     $  25.5    $  63.9     $  61.6
  Interest paid, net of amounts capitalized                          25.4        24.3       51.6        47.5

<F1>
The accompanying notes are an integral part of this statement.
</TABLE>



<TABLE>
Nicor Inc.                                                                                         Page 4 

Consolidated Balance Sheet (Unaudited)
(Millions)
<CAPTION>
                                                                 June 30        December 31         June 30
                          Assets                                   1998             1997              1997  

Current assets
  <S>                                                           <C>  <C>         <C>   <C>         <C>  <C>
  Cash and cash equivalents                                     $    22.2        $     5.2         $    88.7
  Short-term investments, at cost which approximates market          25.9             20.2              25.0
  Receivables, less allowances of $8.4,
    $8.6 and $10.8, respectively                                    161.5            354.6             177.3
  Gas in storage, at last-in, first-out (LIFO) cost                  16.2            127.8              14.2
  Other                                                              29.2             27.0              20.4

                                                                    255.0            534.8             325.6

Property, plant and equipment, at cost
  Gas distribution                                                3,066.9          3,026.8           2,993.6
  Shipping                                                          244.1            240.4             236.5
  Other                                                                .8               .5                .6
                                                                  3,311.8          3,267.7           3,230.7
  Less accumulated depreciation                                   1,602.0          1,531.9           1,489.2

                                                                  1,709.8          1,735.8           1,741.5

Other assets                                                        151.4            124.0             102.8

                                                                $ 2,116.2        $ 2,394.6         $ 2,169.9      

               Liabilities and Capitalization

Current liabilities
  Long-term obligations due within one year                     $    25.5        $    25.4         $    25.0
  Short-term borrowings                                                 -            278.9                 -
  Accounts payable                                                  232.6            241.9             250.2
  Temporary LIFO liquidation                                         24.2                -              56.6
  Accrued gas costs                                                  17.0             25.1              32.3
  Other                                                              41.2             50.3              39.6

                                                                    340.5            621.6             403.7

Deferred credits and other liabilities
  Deferred income taxes                                             228.3            214.9             215.2
  Regulatory income tax liability                                    80.1             81.7              82.6
  Unamortized investment tax credits                                 45.2             46.2              47.3
  Other                                                             106.7            129.6             136.2

                                                                    460.3            472.4             481.3

Capitalization
  Long-term debt                                                    551.2            550.2             543.3
  Preferred stock
    Redeemable                                                        6.2              6.3               6.2
    Nonredeemable                                                      .1               .1                .1
  Common equity
    Common stock                                                    119.6            120.5             121.6
    Retained earnings                                               638.3            623.5             613.7

                                                                  1,315.4          1,300.6           1,284.9  

                                                                $ 2,116.2        $ 2,394.6         $ 2,169.9

<F1>
The accompanying notes are an integral part of this statement.             
</TABLE>




 
Nicor Inc.                                                         Page 5 

Notes to the Consolidated Financial Statements (Unaudited)

ACCOUNTING POLICIES

Depreciation.  Depreciation for the gas distribution segment is calculated
using a straight-line method for the calendar year.  For interim periods,
depreciation is allocated based on gas deliveries.

Gas in Storage.  Gas in storage injections and withdrawals are valued using
the last-in, first-out (LIFO) method on a calendar-year basis.  For interim
periods, the difference between current replacement cost and the LIFO cost
for quantities of gas temporarily withdrawn from storage is recorded in cost
of gas as a temporary LIFO liquidation.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the Financial Accounting Standards Board issued Statement 
No. 133, Accounting for Derivative Instruments and Hedging Activities.  This
statement requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure those
instruments at fair value.  Gains or losses resulting from changes in the
values of those derivatives are to be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting.  This
statement requires adoption no later than the first quarter of the company's
2000 fiscal year and must be adopted as a cumulative effect of a change in
accounting principle.  Implementation of this statement is not expected to
have a material impact on the company's financial condition or results of
operations. 

In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use.  This statement provides guidance on
accounting for the costs of computer software developed or obtained for
internal use and is required to be adopted no later than the company's 1999
fiscal year.  The company plans to modify its method of capitalization of
such costs by adopting this statement prospectively on January 1, 1999.  The
company is currently evaluating this statement but does not expect it to
have a material impact on its financial condition or results of operations.

LONG-TERM DEBT

In June 1998, Nicor Gas issued $50 million of 5-3/4% First Mortgage Bonds
due in 2003.  The net proceeds from the sale, together with the proceeds
from the February 1998 sale of $50 million of 6.58% First Mortgage Bonds due
in 2028 and other corporate funds, replenished funds used for the March 1998
redemption of $75 million of 8-1/4% First Mortgage Bonds due in 2022 and the
February 1998 maturity of $25 million of 5-7/8% First Mortgage Bonds.






Nicor Inc.                                                         Page 6 

Notes to the Consolidated Financial Statements (Unaudited)
(Concluded)

CONTINGENCIES

The company is involved in legal or administrative proceedings before
various courts and agencies with respect to rates, taxes and other matters.

Current environmental laws may require cleanup of certain former
manufactured gas plant sites.  To date, Nicor Gas has identified about 40
properties for which it may, in part, be responsible.  The majority of these
properties are not presently owned by the company.  Information regarding
preliminary site reviews has been presented to the Illinois Environmental 
Protection Agency.  More detailed investigations and remedial activities are
either in progress or planned at many of these sites.  The results of
continued testing and analysis should determine to what extent additional
remediation is necessary and may provide a basis for estimating any
additional future costs which, based on industry experience, could be
significant.  In accordance with Ill.C.C. authorization, the company has
been recovering these costs from its customers.

On December 20, 1995, Nicor Gas filed suit in the Circuit Court of Cook
County against certain insurance carriers seeking recovery of environmental
cleanup costs of certain former manufactured gas plant sites.  Presently,
management cannot predict the outcome of this lawsuit.  Any recoveries from
such litigation or other sources will be flowed back to the company's
customers.

Although unable to determine the outcome of these contingencies, management
believes that appropriate accruals have been recorded.  Final disposition of
these matters is not expected to have a material impact on the company's
financial condition or results of operations.




Nicor Inc.                                                         Page 7 

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations

OVERVIEW

The following discussion should be read in conjunction with the Management's
Discussion and Analysis section of the Nicor 1997 Annual Report on
Form 10-K.

Nicor's second quarter 1998 diluted earnings per common share were $.59
compared with $.58 a year ago despite the negative impact on gas
distribution operating results of weather that was 40 percent warmer than
the prior-year period.  Positive factors included a reduction in operating
and maintenance expenses in the gas distribution segment, a significant
increase in deliveries of natural gas for electric power generation and
improved operating results in the shipping segment.  Favorable nonoperating
factors included additional gains on real estate sales and the impact of a
stock repurchase program.  Net income for the quarter was $28.5 million
compared with $28.7 million in 1997.

Diluted earnings per common share for the six months ended June 30, 1998,
were $1.34 compared with $1.40 a year ago.  Related net income was $64.7
million compared with $69.2 million in 1997.  Weather in the first half of
1998 was 22 percent warmer than in the prior year, but the impact on financial
results was partially offset by the previously mentioned positive factors.

Diluted earnings per common share for the twelve months ended June 30, 1998,
rose to $2.54 from $2.40 a year ago.  Related net income was $123.4 million
compared with $119.4 million.  The positive factors noted above more than
offset the negative impact of weather that was 16 percent warmer than in the
prior year.

Operating income (loss) for the periods ended June 30 by business segment
was (millions):

                         Three months      Six months     Twelve months 
                         1998     1997    1998    1997    1998      1997 

  Gas distribution      $ 43.7   $ 48.0  $103.2  $116.4  $197.0   $208.4
  Shipping                 6.0      5.7    12.4    11.3    26.4     21.0
  Corporate and other      (.8)    (1.1)   (1.7)   (1.9)   (5.6)    (4.6)

                        $ 48.9   $ 52.6  $113.9  $125.8  $217.8   $224.8





Nicor Inc.                                                         Page 8 

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)

The following summarizes operating income comparisons by business segment:

-       Gas distribution operating income decreased $4.3 million, $13.2
        million and $11.4 million for the three-, six- and twelve-month
        periods, respectively, due to the negative impact of significantly
        warmer weather.  Positive factors included a reduction in operating
        and maintenance expenses and a significant increase in deliveries of
        natural gas for electric power generation.

-       Shipping operating income increased $.3 million, $1.1 million and 
        $5.4 million for the three-, six- and twelve-month periods,
        respectively, due primarily to higher volumes shipped.

RESULTS OF OPERATIONS

Details of various financial and operating information by segment can be
found in the tables on pages 11 and 12.  The following summarizes the major
changes in Nicor's revenues and expenses.

Operating revenues decreased $32.4 million, $370.1 million and $394.4
million for the three-, six- and twelve-month periods, respectively, due
primarily to lower revenues in the gas distribution segment.  For the three-
month period, the decrease in the gas distribution segment was attributable
to lower deliveries of natural gas due to the impact of significantly warmer
weather.  For the six- and twelve-month periods, the decrease in the gas
distribution segment was due to lower natural gas supply costs, which are
passed through to customers, and lower deliveries of natural gas due to the
impact of significantly warmer weather.

Gas distribution margin, defined as operating revenues less cost of gas and
revenue taxes, which are both passed directly through to customers, is shown
in the following table for the periods ended June 30.  Margin decreased in
all periods due to the impact of warmer weather.  The increase in margin per
Mcf delivered was due, in part, to the impact of a reduction in lower-margin
deliveries due to warmer weather.

                         Three months      Six months     Twelve months
                         1998     1997    1998    1997    1998     1997 

  Gas distribution
    margin (Millions)   $103.4   $109.1  $251.7  $268.7  $479.0  $495.5

  Margin per Mcf
    delivered             1.17     1.12     .91     .86     .94     .91




Nicor Inc.                                                         Page 9 

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)    

Operating and maintenance expenses increased in each period due primarily to
higher volume-related costs in the shipping segment and an increase in
expenses related to another unregulated Nicor venture which more than offset
lower costs in the gas distribution segment.  Operating and maintenance
expenses in the gas distribution segment decreased in each period due
primarily to lower retirement benefits costs, resulting principally from
favorable pension fund investment returns, and a reduction in the provision
for uncollectible accounts related to lower operating revenues.

Other income increased $2.5 million, $3.9 million and $11.2 million for the
three-, six- and twelve-month periods, respectively, due primarily to
additional gains on real estate sales.

The company's periodic review of its discontinued operations reserve
indicates that no adjustment to the reserve is presently appropriate.

FINANCIAL CONDITION

Net cash flow from operating activities decreased $44.6 million and 
$190.2 million for the six- and twelve-month periods, respectively, due
primarily to changes in working capital items in the gas distribution
segment.  The working capital component of net cash flow from operating
activities can swing sharply due primarily to certain gas distribution
factors including weather, the timing of collections from customers and gas
purchasing practices.  The company generally relies on short-term financing
to meet temporary increases in working capital needs.

The company has committed a total of $22 million to two investments.  In 
one transaction, Nicor will invest an additional $10 million in a low income
housing tax credit fund.  In another transaction, $12 million will be used
to expand the company's equity interest in a cargo container leasing 
business. 

Nicor and its gas distribution subsidiary maintain short-term credit
agreements with major domestic and foreign banks.  At June 30, 1998, these
agreements, which serve as backup for the issuance of commercial paper,
totaled $280 million.  The company had no outstanding commercial paper at
June 30, 1998.

In June 1998, Nicor Gas issued $50 million of 5-3/4% First Mortgage Bonds
due in 2003.  The net proceeds from the sale, together with the proceeds
from the February 1998 sale of $50 million of 6.58% First Mortgage Bonds due
in 2028 and other corporate funds, replenished funds used for the March 1998
redemption of $75 million of 8-1/4% First Mortgage Bonds due in 2022 and the
February 1998 maturity of $25 million of 5-7/8% First Mortgage Bonds.

Under an existing common stock repurchase program, Nicor purchased and
retired 389,000 common shares during the first six months of 1998 at an
aggregate cost of $15.8 million.

Effective with the dividend paid on May 1, 1998, Nicor's quarterly dividend
on common stock was increased 5.7 percent to 37 cents per share.




Nicor Inc.                                                         Page 10

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations (Continued)    

OTHER

Strategic Alliance.  In July 1998, Nicor and Houston-based Dynegy Inc.
(formerly NGC Corporation) announced the formation of a strategic alliance
to jointly pursue wholesale generation and cogeneration power projects,
including such projects as new power plant construction and acquisition of
power generation assets.  The alliance will focus on six states in the
Midwest: Illinois, Wisconsin, Indiana, Iowa, Minnesota and Missouri. 
Potential customers include industrial businesses, utilities and
municipalities.  This alliance is the second between Nicor and Dynegy.
The companies are already partners in Nicor Energy L.L.C., a provider of
unregulated energy products and services to customers in the Midwest.

Viking Voyageur Pipeline Project.  In April 1998, Northern States Power
announced its withdrawal from the Viking Voyageur Pipeline project citing
the project's inability to obtain adequate commitment from producers.  This
event did not have a material impact on the company's financial condition or
results of operations.  Nicor and TransCanada Pipelines continue to be
committed to evaluating options that will meet the growing needs of the
Midwest market.

New Accounting Pronouncements.  In June 1998, the Financial Accounting
Standards Board issued Statement No. 133, Accounting for Derivative
Instruments and Hedging Activities.  In March 1998, the American Institute
of Certified Public Accountants issued Statement of Position 98-1,
Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use.  These statements are not expected to have a material impact
on the company's financial condition or results of operations.  For further
information, see New Accounting Pronouncements on page 5.




<TABLE>
Nicor Inc.                                                                                            Page 11

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations (Continued)

OPERATING STATISTICS

Gas Distribution

Changes in weather can materially affect operating results.  Operating revenues, deliveries, weather statistics
and other data are presented below.
<CAPTION>
                                         Three months ended        Six months ended         Twelve months ended
                                               June 30                  June 30                   June 30      
                                          1998       1997          1998        1997          1998        1997  

Operating revenues (Millions):          
  Sales
     <S>                                <C>        <C>           <C>         <C>           <C>         <C>
     Residential                        $  136.5   $  148.4      $  466.2    $  683.0      $  909.1    $1,123.9
     Commercial                             31.3       39.8         120.9       198.7         237.0       317.3
     Industrial                              5.0       11.2          18.6        39.6          35.8        63.6
                                           172.8      199.4         605.7       921.3       1,181.9     1,504.8  

  Transportation
     Commercial                             11.5       11.0          28.3        29.2          54.5        54.0  
     Industrial                              8.5       10.3          19.0        24.1          43.3        48.4
                                            20.0       21.3          47.3        53.3          97.8       102.4

  Revenue taxes and other                   22.0       23.3          66.1        89.3         106.0       129.7

                                        $  214.8   $  244.0      $  719.1    $1,063.9      $1,385.7    $1,736.9


Deliveries (Bcf):
  Sales                                                                      
     Residential                            25.8       35.0         113.7       141.7         205.2       238.0
     Commercial                              6.2       10.1          29.0        41.2          53.0        67.1
     Industrial                              1.2        4.1           4.9         9.1           8.7        15.7
                                            33.2       49.2         147.6       192.0         266.9       320.8

  Transportation
     Commercial                             10.0       10.1          36.1        38.4          63.7        66.7 
     Industrial                             44.9       37.9          93.1        81.7         179.4       157.0
                                            54.9       48.0         129.2       120.1         243.1       223.7 

                                            88.1       97.2         276.8       312.1         510.0       544.5


Average gas cost per Mcf sold           $   2.90   $   2.30      $   2.80    $   3.69      $   3.03    $   3.46


Weather statistics:
  Degree days                                532        893         3,105       3,995         5,364       6,420
  Percent colder (warmer) than normal      (22.7)      29.8         (19.3)        3.8         (12.3)        5.0


Customers at end of period (Thousands):
  Sales
     Residential                         1,718.6    1,690.9         
     Commercial                            125.2      141.0      
     Industrial                              9.0       11.4
                                         1,852.8    1,843.3

  Transportation
     Commercial                             36.9       18.6
     Industrial                              5.0        2.8
                                            41.9       21.4

                                         1,894.7    1,864.7 
</TABLE>



<TABLE>
Nicor Inc.                                                                                           Page 12

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations (Concluded)

OPERATING STATISTICS (Concluded)

Shipping
<CAPTION>
                                         Three months ended        Six months ended        Twelve months ended
                                               June 30                  June 30                  June 30      
                                          1998         1997        1998         1997        1998        1997  

<S>                                     <C>          <C>         <C>          <C>         <C>         <C>
Operating revenues (Millions)           $   53.6     $   50.9    $  108.7     $  101.3    $  220.5    $  205.3
    
Operating income (Millions)             $    6.0     $    5.7    $   12.4     $   11.3    $   26.4    $   21.0

TEUs shipped (Thousands)
  Southbound                                28.6         26.1        58.0         51.0       117.0       103.5
  Northbound                                 4.0          3.9         7.2          7.2        14.5        14.7   
  Interisland                                2.1          3.6         5.0          5.8        13.2        10.1

                                            34.7         33.6        70.2         64.0       144.7       128.3  

Revenue per TEU                         $  1,509     $  1,460    $  1,507     $  1,520    $  1,483    $  1,532

Ports served                                  23           27

Vessels owned                                 14           14
</TABLE>




Nicor Inc.                                                         Page 13

PART II - Other Information

Item 1.  Legal Proceedings
         
         For information concerning legal proceedings, see Contingencies in
         Notes to the Consolidated Financial Statements on page 6, which is
         incorporated herein by reference.

Item 4.  Submission of Matters to a Vote of Security Holders

         The Annual Meeting of Stockholders of the company was held on
         April 16, 1998, for the purpose of electing the Board of Directors
         and approving an amendment to the Articles of Incorporation to
         increase the number of authorized shares of common stock. Proxies
         for the meeting were solicited pursuant to Section 14(a) of the
         Securities Exchange Act of 1934 and there was no solicitation in
         opposition to management's solicitation.  The results of the voting
         as reported below are for shares eligible to vote as of the record
         date, February 17, 1998.  There were no "broker nonvotes."

         All of management's nominees for directors as listed in the proxy
         statement were elected as indicated below:

                                              Shares           Shares
                                               Voted            Voted
                     NOMINEE                    FOR            WITHHELD

             Robert M. Beavers, Jr.         41,049,741         542,213
             Bruce P. Bickner               41,005,404         576,336
             John H. Birdsall, III          41,034,689         549,615
             Thomas A. Donahoe              41,035,834         544,752
             Thomas L. Fisher               41,011,810         573,429
             John E. Jones                  41,011,451         565,703
             Dennis J. Keller               41,056,288         532,212
             Charles S. Locke               40,996,059         579,362
             Sidney R. Petersen             40,986,854         585,153
             John Rau                       41,041,766         542,614
             Patricia A. Wier               41,030,993         552,585

         The proposal to approve the amendment to the Articles of
         Incorporation to increase the number of authorized shares of common
         stock was approved by the following vote:

                 Shares              Shares             Shares
                  Voted              Voted               Voted
                   FOR               AGAINST          ABSTAINING

               35,290,498           5,777,680          467,585




Nicor Inc.                                                         Page 14

Item 6. Exhibits and Reports on Form 8-K

  (a)   See Exhibit Index on page 16 filed herewith.

  (b)   The company did not file a report on Form 8-K during the second
        quarter of 1998.





Nicor Inc.                                                         Page 15

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





                                        Nicor Inc.



Date  August 12, 1998                   By        DAVID L. CYRANOSKI       
                                                  David L. Cyranoski
                                                Senior Vice President,
                                               Secretary and Controller





Nicor Inc.                                                         Page 16

Exhibit Index

Exhibit
 Number                          Description of Document                    

   3.01 *  Amendment to Articles of Incorporation of the company. (Proxy     
           Statement dated March 6, 1998, Nicor Inc., Item 2 thereto.) 
   
   4.01 *  Supplemental Indenture, dated June 1, 1998, of Nicor Gas Company
           to Harris Trust and Savings Bank, Trustee, under Indenture dated
           as of January 1, 1954.  (File No. 1-7296, Form 10-Q for June 
           1998, Nicor Gas Company, Exhibit 4.01.)

  27.01    Financial Data Schedule.



                              

* These exhibits have been previously filed with the Securities and Exchange
  Commission and are incorporated herein by reference.