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 September 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 1-4169

               TEXAS GAS TRANSMISSION CORPORATION
     (Exact name of registrant as specified in its charter)

           Delaware                        61-0405152
     (State or other jurisdiction of     (I.R.S. Employer
     incorporation or organization)     Identification No.)


 3800 Frederica Street, Owensboro, Kentucky            42301
    (Address of principal executive offices)        (Zip Code)

 Registrant's telephone number, including area code: (502) 926-8686


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
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes  X    No_

Indicate the number of shares outstanding of each of the issuer's
classes  of  common  stock,  as of the latest  practicable  date.
1,000 shares as of November 10, 1998

REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS
H(1)(a)  and (b) OF FORM 10-Q AND IS THEREFORE FILING  THIS  FORM
WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY

                        TABLE OF CONTENTS



                                                                        Page

                 Part I.  Financial Information

Item 1.  Financial Statements

         Consolidated Balance Sheets - Assets..........................     3

         Consolidated Balance Sheets - Liabilities and Stockholder's
           Equity......................................................     4

         Consolidated Statements of Income............................. 5 - 6

         Consolidated Statements of Cash Flows.........................     7

         Condensed Notes to Consolidated Financial Statements..........     8

Item 2.  Management's Narrative Analysis of the Results of Operations..    12
                                
                                
                   Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K..............................    15

Signature..............................................................    16






Certain  matters  discussed in this report, excluding  historical
information, include forward-looking statements.  Although  Texas
Gas   Transmission  Corporation  believes  such   forward-looking
statements are based on reasonable assumptions, no assurance  can
be  given that every objective will be achieved.  Such statements
are  made  in reliance on the "safe harbor" protections  provided
under  the  Private  Securities Reform Act of  1995.   Additional
information about issues that could lead to material  changes  in
performance  is contained in Texas Gas Transmission Corporation's
1997 Annual Report on Form 10-K and 1998 First and Second Quarter
Reports  on Form 10-Q and the year 2000 disclosures contained  in
this document.
<PAGE>

Item 1.   Financial Statements

        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
                                
                   CONSOLIDATED BALANCE SHEETS
                     (Thousands of Dollars)
                           (Unaudited)
<TABLE>
<CAPTION>
                                            September 30,      December 31,
                    ASSETS                      1998               1997
<S>                                        <C>                <C>
Current Assets:
 Cash and temporary cash investments        $      119         $      235
 Receivables:
   Trade                                         2,718              2,937
   Affiliates                                      273                284
   Other                                           795              1,945
 Transportation and exchange receivable          2,056              1,890
 Advances to affiliates                         58,466             93,500
 Inventories                                    15,833             15,386
 Deferred income taxes                          20,352             18,179
 Costs recoverable from customers               11,924             16,311
 Gas stored underground                         10,409             11,115
 Other                                           2,288              1,690
   Total current assets                        125,233            163,472

Investments, at cost                               626              1,224

Property, Plant and Equipment, at cost:
 Natural gas transmission plant              1,054,491          1,022,654
 Less -- Accumulated depreciation and
   amortization                                119,298             98,649
   Property, plant and equipment, net          935,193            924,005

Other Assets:
 Gas stored underground                        113,152             97,984
 Costs recoverable from customers               51,952             45,504
 Other                                          35,235             24,954
   Total other assets                          200,339            168,442

   Total Assets                             $1,261,391         $1,257,143
                                
</TABLE>                                                                
                                
 The accompanying condensed notes are an integral part of these
               consolidated financial statements.

<PAGE>
        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
                                
                   CONSOLIDATED BALANCE SHEETS
                     (Thousands of Dollars)
                           (Unaudited)
<TABLE>
<CAPTION>
                                
                                            September 30,      December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY           1998               1997
<S>                                         <C>                <C>
Current Liabilities:
 Payables:
   Trade                                     $    4,538         $    3,007
   Affiliates                                     4,075             11,939
   Other                                          3,868              7,853
 Gas Payables:
   Transportation and exchange                   13,466              1,173
   Storage                                       11,271             13,343
 Accrued taxes                                   22,801             21,776
 Accrued interest                                 1,511              6,557
 Other accrued liabilities                       43,296             51,517
 Reserve for regulatory and rate matters         19,749             11,319
   Total current liabilities                    124,575            128,484

Long-Term Debt                                  251,230            251,433

Other Liabilities and Deferred Credits:
 Deferred income taxes                          153,301            150,113
 Postretirement benefits other than pensions     41,616             35,683
 Other                                           58,926             49,040
   Total other liabilities and
     deferred credits                           253,843            234,836

Contingent Liabilities and Commitments             -                  -

Stockholder's Equity:
 Common stock, $1.00 par value, 1,000 shares
   authorized, issued and outstanding                 1                  1
 Premium on capital stock and other paid-in
   capital                                      631,046            636,046
 Retained earnings                                  696              6,343
   Total stockholder's equity                   631,743            642,390

   Total Liabilities and
     Stockholder's Equity                    $1,261,391         $1,257,143




</TABLE>
 The accompanying condensed notes are an integral part of these
               consolidated financial statements.
<PAGE>

        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
                                
                CONSOLIDATED STATEMENTS OF INCOME
                     (Thousands of Dollars)
                           (Unaudited)
<TABLE>
<CAPTION>

                                      Three Months Ended September 30,
                                           1998           1997
<S>                                     <C>             <C>
Operating Revenues:
 Gas transportation                      $ 49,065        $ 52,993
 Gas sales                                  3,362           4,049
 Other                                        872             116
   Total operating revenues                53,299          57,158

Operating Costs and Expenses:
 Cost of gas transportation                 1,402           5,693
 Cost of gas sold                           3,321           3,949
 Operation and maintenance                 14,599          15,918
 Administrative and general                12,822          14,509
 Depreciation and amortization             10,581          10,696
 Taxes other than income taxes              3,483           3,587
   Total operating costs and expenses      46,208          54,352

Operating Income                            7,091           2,806

Other Deductions (Income):
 Interest expense                           5,238           4,880
 Interest income                           (1,159)         (1,537)
 Miscellaneous other income                  (397)           (258)
   Total other deductions                   3,682           3,085

Income (Loss) Before Income Taxes           3,409            (279)

Provision for (Benefit from) Income Taxes   1,368            (233)

Net Income (Loss)                        $  2,041        $    (46)

                                
</TABLE>                                                        
                                
 The accompanying condensed notes are an integral part of these
               consolidated financial statements.

<PAGE>

        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
                                
                CONSOLIDATED STATEMENTS OF INCOME
                     (Thousands of Dollars)
                           (Unaudited)
<TABLE>
<CAPTION>
                                       Nine Months Ended September 30,
                                           1998            1997
<S>                                     <C>             <C>
Operating Revenues:
 Gas transportation                      $191,473        $209,256
 Gas sales                                 11,750          18,412
 Other                                      2,236           1,044
   Total operating revenues               205,459         228,712

Operating Costs and Expenses:
 Cost of gas transportation                11,843          25,449
 Cost of gas sold                          11,598          18,471
 Operation and maintenance                 42,876          45,613
 Administrative and general                37,453          42,875
 Depreciation and amortization             31,865          31,883
 Taxes other than income taxes             11,148          11,408
   Total operating costs and expenses     146,783         175,699

Operating Income                           58,676          53,013

Other Deductions (Income):
 Interest expense                          15,817          14,904
 Interest income                           (4,019)         (6,164)
 Miscellaneous other income                  (213)           (426)
   Total other deductions                  11,585           8,314

Income Before Income Taxes                 47,091          44,699

Provision for Income Taxes                 18,738          17,665

Net Income                               $ 28,353        $ 27,034

</TABLE>                                
                                
                                
                                
 The accompanying condensed notes are an integral part of these
               consolidated financial statements.

<PAGE>

        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Thousands of Dollars)
                           (Unaudited)
                                
<TABLE>
<CAPTION>
                                             Nine Months Ended September 30,
                                                   1998           1997
<S>                                            <C>             <C>
OPERATING ACTIVITIES:
 Net income                                     $ 28,353        $ 27,034
 Adjustments to reconcile to cash provided
  from operations:
   Depreciation and amortization                  31,865          31,883
   Provision for deferred income taxes             1,015          (5,037)
   Changes in receivables sold                   (16,400)         (9,200)
   Changes in receivables                         17,602          14,456
   Changes in inventories                           (447)           (234)
   Changes in other current assets                (1,837)         12,303
   Changes in accounts payable                    (6,217)         (4,498)
   Changes in accrued liabilities                 14,314             (56)
   Other, including changes in noncurrent
     assets and liabilities                      (22,581)        (19,300)
       Net cash provided by operating
         activities                               45,667          47,351

FINANCING ACTIVITIES:
 Proceeds from long-term debt                       -             99,031
 Payment of long-term debt                          -           (100,000)
 Dividends and returns of capital                (39,000)        (76,036)
 Other                                              -             (8,163)
      Net cash (used in) financing activities    (39,000)        (85,168)

INVESTING ACTIVITIES:
 Property, plant and equipment:
   Capital expenditures, net of AFUDC            (43,254)        (59,601)
   Proceeds from sales and salvage values,
      net of costs of removal                        817           1,288
 Advances to affiliates, net                      35,034          96,295
 Proceeds from sale of long-term investments         620             146
      Net cash (used in) provided by investing
        activities                                (6,783)         38,128

(Decrease) increase in cash and cash equivalents    (116)            311
Cash and cash equivalents at beginning of period     235             115

Cash and cash equivalents at end of period      $    119        $    426
                                
</TABLE>                                
                                
                                                                
 The accompanying condensed notes are an integral part of these
               consolidated financial statements.
<PAGE>

        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
      CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Unaudited)
                                

A.  Corporate Structure and Control, Nature of Operations and
    Basis of Presentation

  Corporate Structure and Control

    Texas  Gas  Transmission Corporation  and  its  wholly  owned
subsidiary, TGT Enterprises, Inc., (collectively, the Company) is
wholly  owned by Williams Gas Pipeline Company, formerly Williams
Interstate  Natural Gas Systems, Inc., which is  a  wholly  owned
subsidiary of The Williams Companies, Inc. (Williams).  Prior  to
May  1,  1997,  the  Company  was a wholly  owned  subsidiary  of
Williams.

  Seasonal Variation

    Operating  income may vary by quarter.  Based on its  current
rate  structure, the Company experiences higher operating  income
in  the  first and fourth quarters as compared to the second  and
third quarters.

  Basis of Presentation

    The consolidated financial statements have been prepared from
the  books and records of the Company without audit, pursuant  to
the   rules  and  regulations  of  the  Securities  and  Exchange
Commission.    Certain   information  and  footnote   disclosures
normally  included in consolidated financial statements  prepared
in  accordance with generally accepted accounting principles have
been   condensed   or   omitted.   The   accompanying   unaudited
consolidated  financial statements include all adjustments,  both
normal  recurring  and  others, which,  in  the  opinion  of  the
Company's  management,  are  necessary  to  present  fairly   its
financial  position at September 30, 1998 and December 31,  1997;
results  of  operations and cash flows for the nine months  ended
September  30, 1998 and 1997; and results of operations  for  the
three   months  ended  September  30,  1998  and   1997.    These
consolidated  financial statements should be read in  conjunction
with  the  financial statements, notes thereto  and  management's
narrative analysis contained in the Company's 1997 Annual  Report
on  Form  10-K and the Company's  1998 First  and Second  Quarter
Reports on 10-Q.

   Certain reclassifications have been made in the 1997 financial
statements to conform to the 1998 presentation.
<PAGE>

B.  Contingent Liabilities and Commitments

  Regulatory and Rate Matters and Related Litigation

   FERC Order 636

    Effective  November  1,  1993, the Company  restructured  its
business to implement the provisions of Federal Energy Regulatory
Commission (FERC) Order 636, which, among other things,  required
pipelines   to   unbundle  their  merchant   roles   from   their
transportation  services.  FERC  Order  636  also  provides  that
pipelines  should  be  allowed the  opportunity  to  recover  all
prudently  incurred transition costs which, for the Company,  are
primarily  related  to  gas supply realignment  (GSR)  costs  and
unrecovered purchased gas costs. Certain aspects of the Company's
FERC Order 636 restructuring are under appeal.

    In  July  1996,  the United States Court of Appeals  for  the
District  of Columbia issued an order which in part affirmed  and
in  part  remanded FERC Order 636.  On February  27,  1997,  FERC
issued  Order  636-C in response to the court's remand  affirming
that  pipelines may recover all of their GSR costs, but requiring
pipelines to individually propose the percentage of such costs to
be allocated to interruptible transportation services, instead of
a  uniform  10 percent allocation. The Company's GSR  settlement,
discussed  below,  is  not  subject  to  appeal  and  should   be
unaffected  by this Order.  The Order also prospectively  relaxed
the  eligibility requirements for receiving no-notice service and
reduced the right of first refusal matching period from 20  years
to  five  years.  Certain aspects of FERC Order 636-C are subject
to appeal.

    In  September 1995, the Company received FERC approval  of  a
settlement  agreement  which resolves all  issues  regarding  the
Company's  recovery of GSR costs.  The settlement  provides  that
the  Company will recover 100 percent of its GSR costs up to  $50
million, will share in costs incurred between $50 million and $80
million  and will absorb any GSR costs above $80 million.   Under
the settlement, all challenges to these costs, on the grounds  of
imprudence  or  otherwise,  will  be  withdrawn  and  no   future
challenges will be filed.  Ninety percent of the cost recovery is
collected   through  demand  surcharges  on  the  Company's  firm
transportation  rates;  the  remaining  10  percent   should   be
recovered   from   its   interruptible  transportation   service.
Effective  July 1, 1997, the FERC allowed the Company to  suspend
its GSR surcharge applicable to firm transportation (FT) services
due  to the full recovery of incurred GSR costs allocated to firm
services.   The  GSR cost increment included in the interruptible
transportation rates, as well as no-notice and FT overrun  rates,
remains  in effect.  To date, the Company has paid $76.2  million
and  collected $66.1 million, plus interest, related to GSR.  The
Company  expects to pay less than $80 million for its  total  GSR
costs,  primarily as a result of contract terminations,  and  has
provided  reserves for the remaining GSR costs it may be required
to  pay,  as well as a regulatory asset for the estimated  future
amounts recoverable.

   General Rate Issues

    On  April  30,  1997, the Company filed a general  rate  case
(Docket  No.  RP97-344) effective November 1,  1997,  subject  to
refund.   This  rate  case  reflects a requested  annual  revenue
increase  of  approximately $70.9 million, based on filed  rates,
primarily  attributable to increases in the  utility  rate  base,
<PAGE>

operating  expenses  and rate of return and related  taxes.   The
Company,  FERC staff, and all intervenors but one have reached  a
proposed  settlement which was filed with the FERC on  March  20,
1998.   On April 28, 1998, the Presiding Administrative Law Judge
issued  an order certifying the settlement to the FERC.  On  July
15,  1998,  the  Commission issued an "Order Approving  Offer  of
Settlement  and  Remanding Case for Hearing."   Applications  for
rehearing  of  this  order  were filed,  and  an  "Order  Denying
Rehearing  and Providing Guidance on Hearing Issues"  was  issued
October  14,  1998.   The Company believes  it  has  provided  an
adequate  reserve for amounts, including interest, which  may  be
refunded to customers.

   Royalty Claims and Producer Litigation

    In  connection  with the Company's renegotiations  of  supply
contracts  with  producers  to  resolve  take-or-pay  and   other
contract claims, the Company has entered into certain settlements
which  may require the indemnification by the Company of  certain
claims for royalties which a producer may be required to pay as a
result  of such settlements.  The Company has been made aware  of
demands  on  producers for additional royalties and  may  receive
other  demands which could result in claims against  the  Company
pursuant  to  the  indemnification provision in its  settlements.
Indemnification for royalties will depend on, among other things,
the specific lease provisions between the producer and the lessor
and  the  terms  of the settlement between the producer  and  the
Company.   Pursuant  to such an indemnity, in January  1998,  the
Company  reimbursed a producer for approximately $1.7 million  in
costs  paid  to settle a take-or-pay royalty claim.  The  Company
may  file  to recover 75 percent of any such amounts  it  may  be
required to pay pursuant to indemnifications for royalties  under
the  provisions  of  FERC Order 528.  The  Company  has  provided
reserves for the estimated settlement costs of its royalty claims
and litigation.

   Environmental Matters

    As  of  September  30, 1998, the Company  had  a  reserve  of
approximately  $1.8 million for estimated costs  associated  with
environmental  assessment and remediation, including  remediation
associated  with the historical use of polychlorinated  biphenyls
and  hydrocarbons.   This  estimate  depends  upon  a  number  of
assumptions  concerning  the scope of remediation  that  will  be
required  at certain locations and the cost of remedial  measures
to   be   undertaken.   The  Company  is  continuing  to  conduct
environmental  assessments  and  is  implementing  a  variety  of
remedial  measures that may result in increases or  decreases  in
the total estimated costs.

    The  Company  currently  is either  named  as  a  potentially
responsible   party  or  has  received  an  information   request
regarding  its  potential involvement at  certain  Superfund  and
state  waste disposal sites.  The anticipated remediation  costs,
if  any,  associated with these sites have been included  in  the
reserve discussed above.

   The Company considers environmental assessment and remediation
costs  and  costs  associated with compliance with  environmental
standards  to be recoverable through rates, as they  are  prudent
costs  incurred in the ordinary course of business.   The  actual
costs  incurred will depend on the actual amount  and  extent  of
contamination discovered, the final cleanup standards mandated by
the  U.S.  Environmental Protection Agency or other  governmental
authorities, and other factors.
<PAGE>
   Summary of Contingent Liabilities and Commitments

   While no assurances may be given, the Company does not believe
that the ultimate resolution of the foregoing matters, taken as a
whole  and  after  consideration of  amounts  accrued,  insurance
coverage,   potential   recovery   from   customers   or    other
indemnification  arrangements, will  have  a  materially  adverse
effect  on  the Company's future financial position,  results  of
operations or cash flow requirements.


C.  Adoption of Accounting Standards

    The Financial Accounting Standards Board has issued Statement
of  Financial  Accounting Standards (SFAS) No. 131,  "Disclosures
about Segments of an Enterprise and Related Information" and SFAS
No.  132,  "Employer's Disclosures About Pension and  Other  Post
Retirement  Benefits," both effective for fiscal years  beginning
after  December  15, 1997.  SFAS Nos. 131 and 132 are  disclosure
oriented;  therefore, these pronouncements are  not  expected  to
have  an  effect on the Company's financial position, results  of
operations or cash flow requirements.

<PAGE>

Item  2.  Management's  Narrative Analysis  of  the  Results  of
          Operations
          (Filed Pursuant to General Instruction H)

                Financial Analysis of Operations
        Nine Months Ended September 30, 1998 Compared to
              Nine Months Ended September 30, 1997


    The Company's gas sales result from requirements to meet  its
pre-Order  636  gas  purchase commitments, substantially  all  of
which  are  managed  by  the Company's gas  marketing  affiliate,
Williams  Energy  Services Company, as exclusive  agent  for  the
Company.   Although the sales and purchase commitments remain  in
the Company's name, their management and any associated profit or
loss  is solely the responsibility of the agent.  Therefore,  the
resulting  sales  and purchases have no impact on  the  Company's
results of operations.

   Operating  income was $5.7 million higher for the nine  months
ended  September  30,  1998,  than  for  the  nine  months  ended
September  30,  1997.  The increase in operating income  was  due
primarily   to   lower   operation,  maintenance,   general   and
administrative  expenses,  and higher  revenues  related  to  new
services  and higher cost recovery due to the current rate  case,
partially offset by the effect of favorable resolutions  in  1997
of  certain contractual issues.  Compared to 1997, net income was
$1.3 million higher due to the reasons discussed above, offset by
higher  interest expense due to pending refunds to customers  and
lower  interest  income as a result of lower interest  rates  and
advances to Williams.

     Operating   revenues  decreased  $23.3   million   primarily
attributable  to  lower  gas  sales, lower  transportation  costs
charged  to the Company by others and passed through to customers
as  provided in the Company's rates, and the effect of  favorable
resolutions  in  1997  of certain contractual  issues,  partially
offset by higher revenues related to new services and higher cost
recovery  due  to  the current rate case.  Total deliveries  were
550.1  TBtu and 562.8 TBtu for the first nine months of 1998  and
1997, respectively.

       Operating  costs  and  expenses  decreased  $28.9  million
primarily  attributable to lower cost of gas sold and lower  cost
of  gas  transportation,  both of which  are  passed  through  to
customers,  as well as lower operation, maintenance, general  and
administrative expenses.

                                
                Financial Condition and Liquidity

   Through the years, the Company has consistently maintained its
financial  strength  and experienced strong operational  results.
Williams' ownership of the Company further enhances its financial
and  operational strength, as well as allows the Company to  take
advantage  of new opportunities for growth.  The Company  expects
to  access  public  and private capital markets,  as  needed,  to
finance its own capital requirements.

    The Company is a participant with other Williams subsidiaries
in  a  $1  billion credit agreement under which the  Company  may
<PAGE>
borrow  up  to  $200  million, subject  to  borrowings  by  other
affiliated  companies.  Interest rates vary with  current  market
conditions.   To  date,  the Company has no  amounts  outstanding
under this facility.

   The  Company  is  a participant in Williams'  cash  management
program.    The   advances  due  the  Company  by  Williams   are
represented  by  demand  notes payable. Those  amounts  that  the
Company anticipates Williams will repay in the next twelve months
are classified as current assets; any remainder is classified  as
noncurrent.   The interest rate on intercompany demand  notes  is
the  London Interbank Offered Rate on the first day of the  month
plus  an  applicable  margin based on the  current  Standard  and
Poor's Rating of the Borrower.

    The  Company's capital expenditures for the first nine months
of   1998   and  1997  were  $43.3  million  and  $59.6  million,
respectively.   Capital expenditures for  1998  are  expected  to
approximate $59.2 million.  The Company's debt as a percentage of
total capitalization at September 30, 1998 and December 31,  1997
was 28.5% and 28.1%, respectively.

      On July 21, 1997, the Company filed an application with the
FERC  to authorize construction, installation and operation of  a
4,600  horsepower compressor engine and associated facilities  at
its  Haughton  Compressor  Station  in  Louisiana.   The  Company
received  an  order  on  March 17, 1998,  issuing  a  certificate
authorizing  the  construction and operation of facilities.   The
project  is expected to cost approximately $6 million,  which  is
included  in  the 1998 capital expenditure estimate  above.   The
facilities were tested and placed in service on November 1, 1998.

    On  April  30,  1997, the Company filed a general  rate  case
(Docket  No.  RP97-344) effective November 1,  1997,  subject  to
refund.   This  rate  case  reflects a requested  annual  revenue
increase  of  approximately $70.9 million, based on filed  rates,
primarily  attributable to increases in the  utility  rate  base,
operating  expenses  and rate of return and related  taxes.   The
Company,  FERC staff, and all intervenors but one have reached  a
proposed  settlement, which was filed with the FERC on March  20,
1998.   On April 28, 1998, the Presiding Administrative Law Judge
issued  an order certifying the settlement to the FERC.  On  July
15,  1998,  the  Commission issued an "Order Approving  Offer  of
Settlement  and  Remanding Case for Hearing."   Applications  for
rehearing  of  this  order  were filed,  and  an  "Order  Denying
Rehearing  and Providing Guidance on Hearing Issues"  was  issued
October  14,  1998.   The Company believes  it  has  provided  an
adequate  reserve for amounts, including interest, which  may  be
refunded to customers.

    Williams, including the Company, initiated an enterprise-wide
project  in 1997 to address the year 2000 (Y2K) compliance  issue
for  both  traditional  information  technology  areas  and  non-
traditional  areas,  including  embedded  technology,  which   is
prevalent  throughout the organization.  This project focuses  on
all  technology  hardware and software, external interfaces  with
customers  and suppliers, operations process control,  automation
and  instrumentation systems, and facility items.  The assessment
phase of this project as it relates to both traditional and  non-
traditional  information technology areas has been  substantially
completed.  Necessary conversion and replacement activities  have
begun and are targeted for completion by December 31, 1998,  with
some  exceptions.   These exceptions include system  replacements
and items dependent on information from third parties.
<PAGE>
    The Company has begun testing activities, which will continue
throughout  the process with substantial completion  expected  by
June 30, 1999.  Y2K test labs are in place and operational.   The
percent  of  inventoried items confirmed to be compliant  through
testing  activities  ranges  from  approximately  42  percent  of
information  technology  (IT)  to  56  percent  non-IT.   As  was
expected,  few  problems have been detected during  testing  with
items believed to be compliant.

   The Company has initiated a formal communications process with
other  companies to determine the extent to which those companies
are  addressing  their Y2K compliance.  In connection  with  this
process,   the   Company  has  sent  over   1,000   letters   and
questionnaires to third parties and is evaluating those responses
as  they  are  received.  Where necessary, the  Company  will  be
working  with those companies to mitigate any materially  adverse
effect on the Company.

    The  Company  expects to utilize both internal  and  external
resources  to  complete the Y2K project. Costs incurred  for  new
software  and  hardware purchases will be capitalized  and  other
costs will be expensed as incurred.  While the total cost of  the
Company's project is still being evaluated, the Company estimates
that  future costs necessary to complete the project  within  the
schedule described will total less than $2 million.  The  Company
will  update  this  estimate  as additional  information  becomes
available.   Less  than $0.1 million of costs (including  capital
expenditures) have been incurred to date.

    The  Company  anticipates that all  Y2K  compliance  required
replacements  will be completed on a timely basis.  Although  all
critical  systems over which the Company has control are  planned
to  be  compliant  and  tested, one area of  risk  could  involve
isolated  system interruptions or shutdowns which might occur  if
significant third parties, such as vendors and customers that can
influence  the  smooth flow of gas transportation,  are  not  Y2K
ready.  However, steps are being taken to attempt to verify  that
such third parties will achieve Y2K compliance on a timely basis.
All areas of the Company are currently examining the requirements
for contingency plans that would avoid or minimize the effect  of
such interruptions.  It is anticipated that all contingency plans
will be completed by June 30, 1999.

   The costs of the project and the completion dates are based on
management's   best  estimates,  which  were  derived   utilizing
numerous  assumptions  of future events including  the  continued
availability  of  certain resources, third party  Y2K  compliance
modification plans, and other factors.  There can be no guarantee
that  these  estimates will be achieved and actual results  could
differ  materially from these estimates.  Specific  factors  that
might  cause differences between the estimates and actual results
include,  but are not limited to, the availability  and  cost  of
personnel  trained  in  these areas, the ability  to  locate  and
correct  all  relevant  computer code, timely  responses  to  and
corrections  by  third-parties  and  suppliers,  the  ability  to
implement interfaces between the new systems and the systems  not
being  replaced, and similar uncertainties.  Due to  the  general
uncertainty inherent in the Y2K problem, resulting in  part  from
the  uncertainty  of  the  Y2K readiness  of  third-parties,  the
Company  cannot ensure its ability to timely and cost-effectively
resolve  problems associated with the Y2K issue that  may  affect
its   operations  and  business,  or  expose  it  to  third-party
liability.

<PAGE>


                   PART II - OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits
               
            *  27.1    Financial Data Schedule for Texas Gas Transmission
                       Corporation for the nine months ending
                       September 30, 1998.


        (b) Reports on Form 8-K

            None
        _____________________________

        *  Filed herewith




<PAGE>







                        S I G N A T U R E


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.

                             TEXAS GAS TRANSMISSION CORPORATION



DATE:  November 13, 1998     BY:   /s/ S. W. Harris

                                       S. W. Harris
                             Controller and Chief Accounting Officer