[EXHIBIT 10vv TO COLONIAL GAS COMPANY
              10-K FOR YEAR ENDED DECEMBER 31, 1996]



                                                          960026E

                       SERVICE AGREEMENT
              (APPLICABLE TO RATE SCHEDULE AFT-E)

     This  Agreement ("Agreement") is made and entered into  this
     2nd  day  of  November, 1996, by and between  Algonquin  Gas
     Transmission Company, a Delaware Corporation (herein  called
     "Algonquin"),  and  Colonial  Gas  Company  (herein   called
     "Customer" whether one or more persons).

     WHEREAS,  Customer has been a Replacement  Shipper  under  a
     permanent release of a service agreement dated May 17,  1994
     for   service   under  Rate  Schedule  AFT-E   ("the   Prior
     Agreement"); and

     WHEREAS, the primary term of the Prior Agreement expires  on
     November 1, 1996; and

     WHEREAS,   Algonquin  and  Customer  desire  to  execute   a
     superseding service agreement under Rate Schedule  AFT-E  in
     order to provide for a primary term of three years.

     NOW, THEREFORE, in consideration of the premises and of  the
     mutual  covenants herein contained, the parties do agree  as
     follows:

                           ARTICLE I
                       SCOPE OF AGREEMENT

    1.1   Subject  to the terms, conditions and limitations
          hereof   and   of  Algonquin's  Rate  Schedule   AFT-E,
          Algonquin agrees to receive from or for the account  of
          Customer  for transportation on a firm basis quantities
          of  natural gas tendered by Customer on any day at  the
          Point(s) of Receipt; provided, however, Customer  shall
          not  tender without the prior consent of Algonquin,  at
          any  Point of Receipt on any day a quantity of  natural
          gas  in  excess of the applicable Maximum Daily Receipt
          Obligation   for  such  Point  of  Receipt   plus   the
          applicable  Fuel Reimbursement Quantity;  and  provided
          further  that Customer shall not tender at all Point(s)
          of  Receipt  on  any  day or in any year  a  cumulative
          quantity  of natural gas, without the prior consent  of
          Algonquin,  in  excess of the following  quantities  of
          natural  gas  plus  the applicable  Fuel  Reimbursement
          Quantities:

               Maximum Daily Transportation Quantity (MMBtu)

                    Nov 16 - Apr 15          6,106*
                    Apr 16 - May 31          5,867
                    Jun  1 - Sep 30          5,388
                    Oct  1 - Nov 15          5,867

           *MDTQ to be utilized in applying monthly Reservation Charge

               Maximum Annual Transportation Quantity 2,119,106 MMBtu
                                
    1.2   Algonquin agrees to transport and deliver  to  or
          for the account of Customer at the Point(s) of Delivery
          and  Customer  agrees to accept or cause acceptance  of
          delivery of the quantity received by Algonquin  on  any
          day,  less the Fuel Reimbursement Quantities; provided,
          however, Algonquin shall not be obligated to deliver at
          any  Point of Delivery on any day a quantity of natural
          gas  in excess of the applicable Maximum Daily Delivery
          Obligation.


                           ARTICLE II
                       TERM OF AGREEMENT

    2.1   This Agreement shall become effective as  of  the
          date set forth hereinabove and shall continue in effect
          for  a  term ending on and including November  1,  1999
          ("Primary Term") and shall remain in force from year to
          year  thereafter unless terminated by either  party  by
          written notice one year or more prior to the end of the
          Primary   Term  or  any  successive  term   thereafter.
          Algonquin's  right  to cancel this Agreement  upon  the
          expiration of the Primary Term hereof or any succeeding
          term shall be subject to Customer's rights pursuant  to
          Sections 8 and 9 of the General Terms and Conditions.

    2.2   This Agreement may be terminated at any  time  by
          Algonquin  in the event Customer fails to pay  part  or
          all of the amount of any bill for service hereunder and
          such failure continues for thirty days after payment is
          due;  provided  Algonquin gives ten days prior  written
          notice  to  Customer of such termination  and  provided
          further  such  termination shall not be  effective  if,
          prior to the date of termination, Customer either  pays
          such   outstanding  bill  or  furnishes  a   good   and
          sufficient   surety   bond  guaranteeing   payment   to
          Algonquin  of  such  outstanding  bill;  provided  that
          Algonquin  shall  not be entitled to terminate  service
          pending  the resolution of a disputed bill if  Customer
          complies  with the billing dispute procedure  currently
          on file in Algonquin's tariff.


                          ARTICLE III
                         RATE SCHEDULE

    3.1   Customer  shall pay Algonquin  for  all  services
          rendered  hereunder  and for the availability  of  such
          service under Algonquin's Rate Schedule AFT-E as  filed
          with  the Federal Energy Regulatory Commission  and  as
          the same may be hereafter revised or changed.  The rate
          to  be  charged  Customer for transportation  hereunder
          shall  not  be  more than the maximum rate  under  Rate
          Schedule  AFT-E, nor less than the minimum  rate  under
          Rate Schedule AFT-E.
                                            
    3.2   This  Agreement  and  all  terms  and  provisions
          contained  or  incorporated herein are subject  to  the
          provisions of Algonquin's applicable rate schedules and
          of  Algonquin's  General Terms and Conditions  on  file
          with the Federal Energy Regulatory Commission, or other
          duly  constituted authorities having jurisdiction,  and
          as the same may be legally amended or superseded, which
          rate schedules and General Terms and Conditions are  by
          this reference made a part hereof.

    3.3   Customer  agrees that Algonquin  shall  have  the
          unilateral   right   to  file  with   the   appropriate
          regulatory authority and make changes effective in  (a)
          the rates and charges applicable to service pursuant to
          Algonquin's  Rate Schedule AFT-E, (b) Algonquin's  Rate
          Schedule AFT-E, pursuant to which service hereunder  is
          rendered or (c) any provision of the General Terms  and
          Conditions   applicable   to   Rate   Schedule   AFT-E.
          Algonquin  agrees that Customer may protest or  contest
          the  aforementioned filings, or may seek  authorization
          from  duly constituted regulatory authorities for  such
          adjustment of Algonquin's existing FERC Gas  Tariff  as
          may be found necessary to assure that the provisions in
          (a), (b), or (c) above are just and reasonable.


                           ARTICLE IV
                      POINT(S) OF RECEIPT

     Natural  gas to be received by Algonquin for the account  of
     Customer hereunder shall be received at the outlet  side  of
     the measuring station(s) at or near the Primary Point(s)  of
     Receipt  set  forth  in Exhibit A of the service  agreement,
     with  the  Maximum Daily Receipt Obligation and the  receipt
     pressure obligation indicated for each such Primary Point of
     Receipt.   Natural gas to be received by Algonquin  for  the
     account  of Customer hereunder may also be received  at  the
     outlet  side of any other measuring station on the Algonquin
     system, subject to reduction pursuant to Section 6.2 of Rate
     Schedule AFT-E.

                          ARTICLE V
                     POINT(S) OF DELIVERY

     Natural gas to be delivered by Algonquin for the account  of
     Customer hereunder shall be delivered on the outlet side  of
     the measuring station(s) at or near the Primary Point(s)  of
     Delivery  set  forth in Exhibit B of the service  agreement,
     with  the Maximum Daily Delivery Obligation and the delivery
     pressure obligation indicated for each such Primary Point of
     Delivery.

     Natural gas to be delivered by Algonquin for the account  of
     Customer hereunder may also be delivered at the outlet  side
     of  any  other  measuring station on the  Algonquin  system,
     subject  to  reduction  pursuant  to  Section  6.4  of  Rate
     Schedule AFT-E.


                           ARTICLE VI
                           ADDRESSES

     Except  as herein otherwise provided or as provided  in  the
     General Terms and Conditions of Algonquin's FERC Gas Tariff,
     any  notice,  request, demand, statement,  bill  or  payment
     provided  for  in  this Agreement, or any notice  which  any
     party  may desire to give to the other, shall be in  writing
     and  shall  be considered as duly delivered when  mailed  by
     registered,  certified,  or first class  mail  to  the  post
     office address of the parties hereto, as the case may be, as
     follows:

          (a)  Algonquin:     Algonquin Gas Transmission Company
                              1284 Soldiers Field Road
                              Boston, MA  02135
                              Attn:     John J. Mullaney
                              Vice President, Marketing


           (b)  Customer:     Colonial Gas Company
                              40 Market Street
                              Lowell, MA  08153
                              Attn:     John Harrington
                              Senior Vice President, Gas Supply


     or  such  other address as either party shall  designate  by
     formal written notice.
     
                          ARTICLE VII
                         INTERPRETATION

     The interpretation and performance of the Agreement shall be
     in   accordance  with  the  laws  of  the  Commonwealth   of
     Massachusetts,  excluding conflicts of law  principles  that
     would  require  the application of the laws of  a  different
     jurisdiction.

                          ARTICLE VIII
                  AGREEMENTS BEING SUPERSEDED

     When  this  Agreement becomes effective, it shall  supersede
     the following agreements between the parties hereto.

     Capacity Release Umbrella Agreement No. 93009ER5 executed by
     Customer  and  Algonquin  under Rate  Schedule  AFT-E  dated
     November 1, 1994.

     IN  WITNESS  WHEREOF, the parties hereto  have  caused  this
     Agreement  to be signed by their respective agents thereunto
     duly authorized, the day and year first above written.


                         ALGONQUIN GAS TRANSMISSION COMPANY


                         By:     __/s/ John J. Mullaney______

                         Title:  ___Vice President, Marketing_



                         COLONIAL GAS COMPANY


                         By:     __/s/ John P. Harrington____

                         Title:  __Senior Vice President_____
                                    -Gas Supply


                           Exhibit A
                      Point(s) of Receipt

                    Dated: November 2, 1996


   To the service agreement under Rate Schedule AFT-E between
       Algonquin Gas Transmission Company (Algonquin) and
                 Colonial Gas Company (Customer)
                  concerning Point(s) of Receipt


     Primary               Maximum Daily              Maximum
     Point of            Receipt Obligation       Receipt Pressure
     Receipt                 (MMBtu)                    (Psig)


     Hanover, NJ (TETCO)                   At any pressure requested
        Nov 16 - Apr 15        2,328	   by Algonquin but not in            
        Apr 16 - May 31        2,237	   excess of 750 Psig.
        Jun  1 - Sep 30        2,054
        Oct  1 - Nov 15        2,237


     Lambertville, NJ                     At any pressure requested
        Nov 16 - Apr 15        3,778      by Algonquin but not in
        Apr 16 - May 31        3,630      excess of 750 Psig.
        Jun  1 - Sep 30        3,334
        Oct  1 - Nov 15        3,630





Signed for Identification

Algonquin:     ___/s/ John J. Mullaney_____

Customer:      ___/s/ John P. Harrington___


                           Exhibit B
                      Point(s) of Delivery

                    Dated: November 2, 1996

   To the service agreement under Rate Schedule AFT-E between
       Algonquin Gas Transmission Company (Algonquin) and
                 Colonial Gas Company (Customer)
                 concerning Point(s) of Delivery


     Primary               Maximum Daily              Minimum
     Point of            Delivery Obligation      Delivery Pressure
     Delivery                (MMBtu)                    (Psig)


     At the property line
     on the outlet side
     of a meter station
     located at:

     Parsippany-Troy Hills,
      New Jersey                                         300
        Nov 16 - Apr 15        6,106
        Apr 16 - May 31        5,867
        Jun  1 - Sep 30        5,388
        Oct  1 - Nov 15        5,867


Signed for Identification

Algonquin:  ___John J. Mullaney___

Customer:   ___John P. Harrington_


                       [END OF EXHIBIT 10vv]