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 MARCH 31, 1997

                                      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 1-7584


                  TRANSCONTINENTAL GAS PIPE LINE CORPORATION
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


                 DELAWARE                                 74-1079400
      (STATE OR OTHER JURISDICTION OF                  (I.R.S. EMPLOYER
       INCORPORATION OR ORGANIZATION)                 IDENTIFICATION NO.)

          2800 POST OAK BOULEVARD
              P. O. BOX 1396
              HOUSTON, TEXAS                                  77251
 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 215-2000

                                     NONE
             (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
                         IF CHANGED SINCE LAST REPORT)


        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

        THE NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $1.00 PER SHARE, 
OUTSTANDING AS OF MARCH 31, 1997 WAS 100.

REGISTRANT  MEETS THE CONDITIONS SET FORTH IN GENERAL  INSTRUCTIONS  H(1)(A) AND
(B) OF FORM  10-Q AND IS  THEREFORE  FILING  THIS  FORM  10-Q  WITH THE  REDUCED
DISCLOSURE FORMAT.

                                              1

<PAGE>





                             PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS.

        COMPANY OR GROUP OF COMPANIES FOR WHICH REPORT IS FILED:

TRANSCONTINENTAL GAS PIPE LINE CORPORATION AND SUBSIDIARIES (TRANSCO)


     The accompanying  interim condensed  consolidated  financial  statements of
Transco do not include all notes in annual  financial  statements  and therefore
should be read in conjunction with the financial statements and notes thereto in
Transco's 1996 Annual Report on Form 10-K. The accompanying  unaudited financial
statements  have not been  audited  by  independent  auditors  but  include  all
adjustments  both normal recurring and others which, in the opinion of Transco's
management,  are necessary to present fairly its financial position at March 31,
1997,  and results of  operations  for the three months ended March 31, 1997 and
1996, and cash flows for the three months ended March 31, 1997 and 1996.



                                           2

<PAGE>




                              TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                 CONDENSED CONSOLIDATED BALANCE SHEET
                                        (Thousands of Dollars)
                                              (Unaudited)
<TABLE>
<CAPTION>

                                                                           March 31,      December 31,
                                                                             1997            1996
                                                                        ------------     -------------
        ASSETS
<S>                                                                      <C>              <C>
Current Assets:
     Cash                                                                $     1,407      $      1,774
     Receivables:
        Affiliates                                                             1,928             4,837
        Others                                                                20,967            51,011
     Advances to affiliates                                                   53,085           148,496
     Transportation and exchange gas receivables:
        Affiliates                                                            23,439            22,111
        Others                                                                63,887            72,900
     Inventories                                                             110,722            69,461
     Deferred income tax asset                                                75,643            76,192
     Other                                                                    18,563            19,807
                                                                        ------------     -------------
        Total current assets                                                 369,641           466,589
                                                                        ------------     -------------

Investments                                                                    8,134             5,865
                                                                        ------------     -------------

Property, Plant and Equipment :
     Natural gas transmission plant                                        3,765,304         3,738,550
     Less-Accumulated depreciation and amortization                          358,534           318,234
                                                                        ------------     -------------
        Total property, plant and equipment, net                           3,406,770         3,420,316
                                                                        ------------     -------------

Other Assets                                                                 163,197           166,757
                                                                        ------------     -------------

                                                                         $ 3,947,742      $  4,059,527
                                                                        ============     =============   


The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

</TABLE>




                                              3

<PAGE>





                               TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                  CONDENSED CONSOLIDATED BALANCE SHEET
                                         (Thousands of Dollars)
                                               (Unaudited)
<TABLE>
<CAPTION>

                                                                        March 31,          December 31,
                                                                          1997                1996
                                                                    ----------------      --------------
        LIABILITIES AND STOCKHOLDER'S EQUITY 
<S>                                                                 <C>                   <C>
Current Liabilities:
     Current maturities of long-term debt                           $              -      $       99,000
     Payables:
        Affiliates                                                            35,432              70,283
        Others                                                                47,940              84,026
     Transportation and exchange gas payables:
        Affiliates                                                               193                 190
        Other                                                                 26,069              27,050
     Accrued liabilities                                                     114,013             104,289
     Reserve for rate refunds                                                185,881             172,823
                                                                    ----------------      --------------
        Total current liabilities                                            409,528             557,661
                                                                    ----------------      --------------

Long-Term Debt                                                               680,885             681,076
                                                                    ----------------      --------------

Other Long-Term Liabilities:
     Deferred income taxes                                                   833,264             833,928
     Other                                                                   178,021             167,648
                                                                    ----------------      --------------
        Total other long-term liabilities                                  1,011,285           1,001,576
                                                                    ----------------      --------------

Commitments and contingencies (Note 3)

Common Stockholder's Equity:
     Common stock $1.00 par value:
        100 shares authorized, issued and outstanding                              -                   -
     Premium on capital stock and other paid-in capital                    1,652,430           1,652,430
     Retained earnings                                                       193,614             166,784
                                                                    ----------------      --------------
        Total common stockholder's equity                                  1,846,044           1,819,214
                                                                    ----------------      --------------

                                                                    $      3,947,742      $    4,059,527
                                                                    ================      ==============      


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


                                              4

<PAGE>





                                TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                          (Thousands of Dollars)
                                                (Unaudited)
<TABLE>
<CAPTION>


                                                            For the Three             For the Three
                                                             Months Ended              Months Ended
                                                            March 31, 1997            March 31, 1996
                                                          ------------------        ------------------
<S>                                                       <C>                       <C>
Operating Revenues:
   Natural gas sales                                      $          159,509        $          264,077
   Natural gas transportation                                        156,207                   176,688
   Natural gas storage                                                36,591                    36,772
   Other                                                               2,207                     1,690
                                                          -------------------        ------------------
      Total operating revenues                                       354,514                   479,227
                                                          -------------------        ------------------

Operating Costs and Expenses:
   Cost of natural gas sales                                         159,508                   264,010
   Cost of natural gas transportation                                 10,813                    24,191
   Operation and maintenance                                          43,640                    45,520
   Administrative and general                                         31,739                    34,662
   Depreciation and amortization                                      38,794                    43,532
   Taxes - other than income taxes                                     9,264                     9,249
   Other                                                                 592                       216
                                                          -------------------        ------------------
      Total operating costs and expenses                             294,350                   421,380
                                                          -------------------        ------------------

Operating Income                                                      60,164                    57,847
                                                          -------------------        ------------------

Other (Income) and Other Deductions:
   Interest expense                                                   17,190                    13,146
   Interest income - affiliates                                       (1,130)                   (1,131)
                   - other                                                 -                       (54)
   Allowance for equity and borrowed funds used during
     construction (AFUDC)                                             (1,800)                   (1,039)
   Miscellaneous other deductions, net                                   568                       977
                                                          -------------------        ------------------
      Total other deductions                                          14,828                    11,899
                                                          -------------------        ------------------

Income before Income Taxes                                            45,336                    45,948

Provision for Income Taxes                                            17,665                    17,819
                                                          -------------------         -----------------

Net Income                                                $           27,671         $          28,129
                                                          ===================         =================



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


                                                    5

<PAGE>




                                TRANSCONTINENTAL GAS PIPE LINE CORPORATION


                              CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

                                          (Thousands of Dollars)

                                                (Unaudited)
<TABLE>
<CAPTION>

                                                                                Three Months Ended
                                                                                     March 31,
                                                                     -------------------------------------------
                                                                            1997                    1996
                                                                     ------------------      ------------------- 
<S>                                                                  <C>                     <C>
Cash flows from operating activities:
   Net income                                                        $          27,671       $           28,129
   Adjustments to reconcile net income to net cash provided
     by (used in) operating activities:
      Depreciation and amortization                                             40,627                   47,212
      Deferred income taxes                                                       (115)                 (19,223)
      Allowance for equity funds used during construction (AFUDC)               (1,243)                    (880)
      Changes in operating assets and liabilities:
         Receivables                                                            48,953                  (18,805)
         Receivables sold                                                      (16,000)                       -
         Transportation and exchange gas receivables                             7,685                   12,378
         Inventories                                                           (41,261)                 (11,746)
         Payables                                                              (63,458)                 (52,002)
         Transportation and exchange gas payables                                 (978)                 (15,855)
         Accrued liabilities                                                     9,740                  (16,120)
         Reserve for rate refunds                                               13,058                   30,773
         Other, net                                                             14,848                   22,964
                                                                     ------------------       ------------------
             Net cash provided by operating activities                          39,527                    6,825
                                                                     ------------------       ------------------

Cash flows from financing activities:
   Retirement of long-term debt                                                (99,000)                       -
   Debt issue costs                                                                (39)                       -
   Dividends on common stock                                                      (841)                       -
                                                                     ------------------       ------------------
             Net cash used in financing activities                             (99,880)                       -
                                                                     ------------------       ------------------

Cash flows from investing activities:
   Property, plant and equipment:
      Additions, net of equity AFUDC                                           (26,141)                 (24,365)
      Changes in accounts payable and accrued liabilities                       (7,479)                  (4,154)
   Advances to affiliates, net                                                  95,411                   22,156
   Other, net                                                                   (1,805)                  (1,308)
                                                                      -----------------      -------------------
             Net cash provided by (used in) investing activities                59,986                   (7,671)
                                                                      -----------------      -------------------

Net decrease in cash                                                              (367)                    (846)
Cash at beginning of period                                                      1,774                    2,557
                                                                      -----------------      -------------------
Cash at end of period                                                 $          1,407       $            1,711
                                                                      =================      ===================


Supplemental  disclosures of cash flow information:
  Cash paid (refunded) during the year for :
      Interest (exclusive of amount capitalized)                      $         22,957       $           17,324
      Income taxes paid                                                            448                   60,821
      Income tax refunds received                                              (11,759)                       -


The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

</TABLE>

                                                    6

<PAGE>



                       TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                          1.  CORPORATE STRUCTURE AND CONTROL

     Transcontinental Gas Pipe Line Corporation (Transco) is a wholly-owned 
subsidiary of The Williams Companies, Inc. (Williams).

                               2.  BASIS OF PRESENTATION

     The condensed  consolidated  financial  statements  include the accounts of
Transco and its majority-owned subsidiaries.  Companies in which Transco and its
subsidiaries  own 20  percent  to 50  percent  of the  voting  common  stock are
accounted for under the equity method.

     The condensed consolidated financial statements have been prepared from the
books and records of Transco  without audit.  Certain  information  and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles have been condensed or omitted.
These condensed  consolidated financial statements should be read in conjunction
with the financial  statements and the notes thereto  included in Transco's 1996
Annual Report on Form 10-K.

     Through an agency agreement,  Williams Energy Services Company (WESCO),  an
affiliate of Transco,  manages all jurisdictional merchant gas sales of Transco,
receives all margins  associated  with such  business  and, as Transco's  agent,
assumes  all market and credit risk  associated  with  Transco's  jurisdictional
merchant gas sales.  Consequently,  Transco's  merchant gas sales service has no
impact on its operating income or results of operations.

     Certain  reclassifications  have been made in the 1996 financial statements
to conform to the 1997 presentation.

                       3.  CONTINGENT LIABILITIES AND COMMITMENTS

     There have been no new developments  from those described in Transco's 1996
Annual Report on Form 10-K other than as described below.

RATE AND REGULATORY MATTERS

     GENERAL RATE CASE (DOCKET NO. RP95-197)

     On June 19, 1996,  Transco filed a Stipulation and Agreement and settlement
rates. The agreement resolves cost of service (subject to the outcome of capital
structure and rate of return in the Phase I  proceeding),  throughput  level and
mix, and certain cost allocation

                                           7

<PAGE>



and rate design  issues.  The agreement  also reserves  certain other issues for
hearing in Phase II,  including the issue of rolled-in  pricing for  incremental
Leidy  Line  services.  With the  exception  of one party  that  filed  comments
opposing the settlement and one party that took no position on the merits of the
settlement,  all active parties and the Federal Energy  Regulatory  Commission's
(FERC) staff either  supported the  settlement or did not oppose it. On November
1,  1996,  the FERC  issued an order  approving  the June 19  agreement,  and on
February 3, 1997  approved an order  denying  rehearing  of its November 1, 1996
order. As a result,  Transco plans to make refunds on May 30, 1997.  Transco has
provided a reserve which it believes is adequate for the refunds  required under
Docket No.
RP95-197.

     GENERAL RATE CASE (DOCKET NO. RP92-137)

     On February 14, 1997,  several  parties  filed a petition for review in the
United States Court of Appeals for the D.C. Circuit (D.C.  Circuit Court) of the
FERC's July 3, 1996 and December 18, 1996 orders addressing production area rate
design issues.

     ORDER 636

     On February 27, 1997, the FERC issued an order in response to the remand of
Order 636 by the D. C. Circuit Court in July 1996.  In that order,  the FERC (i)
reaffirmed  its decision to allow  pipelines to recover 100% of their Gas Supply
Realignment  (GSR) costs,  (ii) allows the  pipelines to propose an  appropriate
percentage of GSR costs to be recovered from interruptible  transportation  (IT)
customers,  (iii)  modified its  right-of-first  refusal  policy to require firm
capacity  holders to match any term bid up to five years to keep their capacity,
rather than the 20 year term adopted in Order 636, (iv) reaffirmed that Straight
Fixed Variable mitigation must be applied on a  customer-by-customer  basis, (v)
requires  prospectively  that no-notice service be offered to all customers on a
non-discriminatory  basis,  and  (vi)  reaffirmed  that it will  determine  on a
case-by-case basis the eligibility of a downstream  pipeline's customers for the
upstream pipeline's one-part, small customer rate.

     ORDER NO. 94-A COSTS (DOCKET NO. RP92-149)

     On January 29, 1997,  the FERC issued an order  approving  the October 1993
settlement between Transco and Columbia Gas Transmission  Corporation (Columbia)
and directing  Columbia to refund to Transco all amounts refunded to Columbia in
excess of the amount  required by the October  1993  settlement.  On January 30,
1997 Columbia filed with the FERC a request for rehearing and a request that the
FERC essentially stay Columbia's refund obligation  pending action by the United
States  Bankruptcy Court. On February 28, 1997, the FERC issued an order denying
rehearing  of its January 29 order,  but staying  Columbia's  refund  obligation
pending action by the Bankruptcy Court.



                                           8

<PAGE>



LEGAL PROCEEDINGS

     OTHER LITIGATION

     On July 18,  1996,  an  individual  filed a lawsuit  in the  United  States
District Court for the District of Columbia against 70 natural gas pipelines and
other gas purchasers or former gas  purchasers.  Transco is named as a defendant
in the lawsuit.  The plaintiff  claims, on behalf of the United States under the
False Claims Act, that the pipelines have incorrectly measured the heating value
or volume of gas  purchased by the  defendants.  The  plaintiff  claims that the
United States has lost royalty payments as a result of these practices.  Transco
intends to vigorously defend against these claims. On November 13, 1996, a group
of 53 defendants,  including Transco,  filed a motion to dismiss the lawsuit. On
March 27, 1997, the court granted the motion to dismiss,  holding that plaintiff
failed to plead fraud with sufficient  particularity  and had improperly  joined
the  defendants  in one  lawsuit.  The order of  dismissal  was  issued  without
prejudice  to the right of  plaintiff  to refile a  properly  pleaded  complaint
against individual defendants in the future.

SUMMARY

     While  no  assurances  may be  given,  Transco  does not  believe  that the
ultimate  resolution of the foregoing  matters and those  described in Transco's
1996 Annual  Report on Form 10-K,  taken as a whole and after  consideration  of
amounts  accrued,   recovery  from  customers,   insurance   coverage  or  other
indemnification  arrangements,  will  have  a  materially  adverse  effect  upon
Transco's  future  financial  position,  results  of  operations  and cash  flow
requirements.

                           4.  DEBT AND FINANCING ARRANGEMENTS

LONG-TERM DEBT

     Williams and certain of its subsidiaries, including Transco, are parties to
a $1 billion credit agreement (Credit Agreement), under which Transco can borrow
up to $400 million.  Interest rates vary with current market  conditions.  As of
March 31, 1997, Transco had no outstanding borrowings under this agreement.

     On January 15, 1997, Transco redeemed $99 million of its 8-1/8% Notes.

SHORT-TERM DEBT

     Transco is a party to three short-term money market  facilities under which
it can  borrow up to an  aggregate  of $135  million.  Interest  rates vary with
current  market  conditions.  As of March 31, 1997,  Transco had no  outstanding
borrowings under these facilities.



                                           9

<PAGE>



SALE OF RECEIVABLES

     Transco is a party to an agreement  that expires in February  1998 pursuant
to which  Transco  can  sell to an  investor  up to $100  million  of  undivided
interests in certain of its trade receivables. During the first quarter of 1997,
Transco  reduced  the level of trade  receivables  sold to $84  million due to a
seasonal reduction in commodity revenues.


                                          10

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     The following  discussion  should be read in conjunction with the financial
statements,  notes and  management's  discussion  contained  in Items 7 and 8 of
Transco's  1996  Annual  Report  on Form 10-K and with the  condensed  financial
statements and notes contained in this report.

                            CAPITAL RESOURCES AND LIQUIDITY

METHOD OF FINANCING

     Transco  funds its  capital  requirements  with cash flows  from  operating
activities,  including  the  sale of trade  receivables,  by  accessing  capital
markets,  by repayments of funds advanced to Williams,  by borrowings  under the
Credit  Agreement  and  short-term  money  market  facilities  and, if required,
advances from Williams.  At March 31, 1997 there were no outstanding  borrowings
under the Credit Agreement or the short-term money market  facilities.  Advances
due Transco by Williams totaled $53 million.

     Due to a seasonal  reduction in  commodity  revenues,  Transco  reduced the
level of trade  receivables  sold from $100  million to $84  million  during the
first quarter of 1997.

     In 1997, Transco also plans to access capital markets to fund its expansion
projects  and  other  general  corporate  requirements.   Transco  believes  any
additional financing can be obtained on reasonable terms.

CAPITAL EXPENDITURES

     As shown in the table below, Transco's capital expenditures,  for the three
months ended March 31, 1997 were $33.6  million,  compared to $28.5  million for
the three months ended March 31, 1996.


                                                            Three Months
                                                           Ended March 31,
                                                        --------------------  
Capital Expenditures                                      1997         1996
--------------------                                    -------      -------
                                                            (In Millions)

Market-Area Projects                                    $   6.4      $   6.5
Supply-Area Projects                                        3.3          0.6
Maintenance of Existing Facilities and Other Projects      23.9         21.4
                                                        -------      -------
Total Capital Expenditures                              $  33.6      $  28.5
                                                        =======      =======



     Transco's capital  expenditure  budget for 1997 and future capital projects
are  discussed in its 1996 Annual Report on Form 10-K.  The following  describes
any  developments  related to those  projects and any new  projects  proposed by
Transco.

                                          11

<PAGE>



     INDEPENDENCE PIPELINE PROJECT In March 1997,  Independence Pipeline Company
filed for FERC  approval  to  construct  and  operate a pipeline  consisting  of
approximately 370 miles of 36-inch diameter pipe with an initial  transportation
capacity of up to 900 MMcf/d.  It will extend from ANR Pipeline  Company's (ANR)
existing compressor station at Defiance,  Ohio to Transco's facilities at Leidy,
Pennsylvania.  Wholly-owned  subsidiaries  of ANR and  Transco  will each own 50
percent of the new project, which is expected to be in service for the 1999-2000
winter heating season.

     1998  CHEROKEE  EXPANSION  PROJECT In April  1997,  Transco  filed for FERC
approval  of its 1998  Cherokee  Expansion  Project.  The project is expected to
provide  approximately 87 MMcf/d of additional firm  transportation  capacity in
Alabama  and  Georgia  by the  1998-1999  winter  heating  season  at a cost  of
approximately $68 million.

     SEABOARD AND POCONO EXPANSION  PROJECTS In April 1997, Transco withdrew its
FERC  certificate  application for the Seaboard Project and filed an application
with the FERC for authority to expand firm transportation  capacity on its Leidy
Line by  approximately  35 MMcf/d from the Leidy Hub in Pennsylvania to delivery
points west of the Delaware River Regulator in Northampton County, Pennsylvania.
The project is expected to be in service by the 1997-1998  winter heating season
and cost approximately $9.8 million.

     MARKETLINK   EXPANSION  PROJECT  In  March  1997,   Transco  announced  its
MarketLink  Expansion  Project.  MarketLink will expand Transco's Leidy Line and
market-area  mainline  facilities,  providing the final  transportation link for
several recently  announced pipeline projects designed to transport Canadian and
Rocky Mountain gas supplies to eastern markets.  The level of market  commitment
indicated  during a 60-day open season  that began  April 2 will  determine  the
facilities,  capacity and capital cost of the project. Transco plans to file for
FERC  approval of the project in August of 1997. It is targeted to be in service
by November 1, 1999.

     SOUTHEAST  LOUISIANA  GATHERING  SYSTEM  EXPANSION  PROJECT In April  1997,
Transco filed an application  with the FERC to amend the  certificate  issued in
March  1997  which  approved  Transco's  Southeast  Louisiana  Gathering  System
Expansion Project. The amendment reduces the firm transportation capacity of the
project to approximately 321 MMcf/d.  The amended project which Transco plans to
place into service on November 1, 1997 is estimated  to cost  approximately  $76
million.

     MOBILE  BAY  LATERAL  EXPANSION  PROJECT  In May  1997,  Transco  filed  an
application  with the FERC to amend the  proposed  extension  and  expansion  of
Transco's  existing  123-  mile  Mobile  Bay  lateral.  The  project,  which was
originally  filed with the FERC in November 1996, is being amended to correspond
to the firm  transportation  commitment  received  during its open  season.  The
amended  project will transport 350 MMcf/d from the outer  continental  shelf to
Transco's Station 85 while increasing Transco's firm transportation  capacity on
the  existing  onshore  lateral  from 520 MMcf/d to 784  MMcf/d.  The project is
targeted  to be in  service  by July 1,  1998  at a cost of  approximately  $120
million.

                                          12

<PAGE>



OTHER CAPITAL REQUIREMENTS AND CONTINGENCIES

     Transco's capital  requirements and contingencies are discussed in its 1996
Annual  Report on Form  10-K.  Other than  described  above and in Note 3 of the
Notes to Condensed  Consolidated  Financial  Statements,  there have been no new
developments  from those  described in Transco's 1996 Annual Report on Form 10-K
with regard to other capital requirements and contingencies.

CONCLUSION

     Although no assurances can be given,  Transco  currently  believes that the
aggregate of cash flows from operating activities, supplemented, when necessary,
by repayments of funds advanced to Williams,  advances or capital  contributions
from Williams and  borrowings  under the Credit  Agreement or  short-term  money
market  facilities,  will provide Transco with sufficient  liquidity to meet its
capital requirements.  Transco also expects to access public and private markets
on reasonable terms to finance its capital requirements.


                                          13

<PAGE>



                                 RESULTS OF OPERATIONS

NET INCOME AND OPERATING INCOME

     Transco's  net income for the three  months  ended  March 31, 1997 of $27.7
million was comparable to net income of $28.1 million for the three months ended
March 31, 1996. Operating income for the first quarter of 1997 was $60.2 million
compared to $57.8  million for the first quarter of 1996.  The higher  operating
income of $2.4 million was primarily  attributable to lower  administrative  and
general expenses and operation and maintenance  expenses and the benefits of the
final phase of the Southeast  Expansion Projects placed in service in late 1996.
The positive operating income variance was eliminated at the net income level by
the effects of higher net interest expense of $4.1 million due to an increase in
the reserve for rate refunds under rate case RP95-197 and  additional  long-term
debt issued in late 1996, partially offset by a greater allowance for funds used
during construction of $0.8 million.

OPERATING EXPENSES

     Excluding  the cost of sales and  transportation  of $170  million  for the
three months ended March 31, 1997 and $288 million for the comparable  period in
1996,  Transco's  operating  expenses for the three months ended March 31, 1997,
were  approximately  $9.2  million  lower than the first  quarter  of 1996.  The
decrease was due to lower  depreciation and amortization of $4.7 million,  lower
administrative  and  general  expense of $2.9  million and lower  operation  and
maintenance  expenses of $1.9 million.  The lower  depreciation and amortization
was due to a reduction in  depreciation  rates that were  contained in Transco's
June 1996 Stipulation and Agreement under Docket RP95-197.  However, the effects
of the lower  depreciation  rates were  offset by a  corresponding  decrease  in
revenues collected in rate case RP95-197.  The lower  administrative and general
expense was  primarily  due to a $2.2  million  decrease in the cost of employee
benefits.  The lower  operation and  maintenance  expense was primarily due to a
$0.8  million  decrease  in lube oil and  odorants  expense  and a $0.8  million
decrease in other supplies and expenditures.

TRANSPORTATION SERVICES

     Transco's operating revenues related to its transportation services for the
three  months ended March 31, 1997 were $156  million,  compared to $177 million
for the three  months ended March 31, 1996.  The lower  transportation  revenues
were  primarily  due to lower gas  transportation  costs  charged  to Transco by
others, lower depreciation costs that are recovered in Transco's rates and lower
system  deliveries,  partly  offset by the  benefits  of the final  phase of the
Southeast Expansion Projects placed in service in late 1996.

     As shown in the table below,  Transco's  total  market-area  deliveries and
production-area  deliveries  for the three months ended March 31, 1997 decreased
28.2 TBtu (7%) and 14.7 TBtu  (25%),  respectively,  when  compared  to the same
period in 1996.  The  decreased  deliveries  were  mainly due to milder  weather
conditions in 1997 as compared to 1996.

                                          14

<PAGE>



     As a result of a straight  fixed-variable  (SFV) rate design,  increases or
decreases in system deliveries have no significant impact on operating income.


                                                                 Three Months
                                                                Ended March 31,
                                                              ------------------
Transco System Deliveries (TBtu)                               1997         1996
--------------------------------                             ------       ------

Market-area deliveries:
    Long-haul transportation                                  234.6        261.8
    Market-area transportation                                138.5        139.5
                                                             ------       ------
        Total market-area deliveries                          373.1        401.3
Production-area transportation                                 43.1         57.8
                                                             ------       ------
Total system deliveries                                       416.2        459.1
                                                             ======       ======


Average Daily Transportation Volumes (TBtu)                     4.6          5.0
Average Daily Firm Reserved Capacity (TBtu)                     5.3          4.9

    Transco's  facilities are divided into seven rate zones. Four are located in
the  production  area and  three  are  located  in the  market  area.  Long-haul
transportation is gas that is received in one of the  production-area  zones and
delivered in a market-area zone. Market-area  transportation is gas that is both
received and delivered within market-area zones. Production-area  transportation
is gas that is both received and delivered within production-area zones.

    See Note 3 of the Notes to Condensed Consolidated Financial Statements for a
discussion of recent developments in Transco's rate and regulatory matters.

SALES SERVICES

    Transco makes  jurisdictional  merchant gas sales to customers pursuant to a
blanket  sales  certificate  issued by the FERC,  with most of those sales being
made  through a Firm Sales (FS)  program  which  gives  customers  the option to
purchase  daily  quantities of gas from Transco at  market-responsive  prices in
exchange for a demand charge payment.

    Through an agency agreement,  WESCO manages all jurisdictional  merchant gas
sales of Transco,  receives all margins  associated  with such  business and, as
Transco's  agent,  assumes all market and credit risk  associated with Transco's
jurisdictional  merchant gas sales.  Consequently,  Transco's merchant gas sales
service has no impact on its operating income or results of operations.

    Transco's  operating  revenues  for the three  months  ended  March 31, 1997
related to its sales  services  decreased  $104  million to $160  million,  when
compared  to the same  period  in 1996.  The  decrease  was  primarily  due to a
significantly  lower  volume of gas sales in Transco's  jurisdictional  merchant
sales services as shown in the table below.  However,  this decrease in revenues
had no effect on Transco's operating or net income variances

                                          15

<PAGE>



when  compared to the prior year since the  decrease in revenues was offset by a
corresponding decrease in the cost of sales.


                                                           Three Months
                                                          Ended March 31,
                                                         -----------------
Gas Sales Volumes (TBtu)                                 1997        1996
------------------------                                 ----        ----

Long-term sales                                          42.4        64.4
Short-term sales                                          2.8        16.6
                                                         ----        ----
    Total gas sales                                      45.2        81.0
                                                         ====        ====


STORAGE SERVICES

    Transco's  operating  revenues  related to storage services of $36.6 million
for the three months ended March 31, 1997 were comparable to storage revenues of
$36.8 million in the same period in 1996.

                                          16

<PAGE>



                               PART II - OTHER INFORMATION


ITEM 1.         LEGAL PROCEEDINGS.

          See  discussion  of  legal  proceedings  in  Note  3 of the  Notes  to
          Condensed Consolidated Financial Statements included herein.

ITEM 6.         EXHIBITS AND REPORTS ON FORM 8-K.

          (a)   Exhibits.

                None.

          (b)   Reports on Form 8-K.

                None


                                          17

<PAGE>




                                        SIGNATURE


Pursuant to the  requirements of Section 13 or 15(d) 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.




                                      TRANSCONTINENTAL GAS PIPE LINE
                                      CORPORATION (Registrant)




Dated: May 15, 1997                   By /s/ Nick A. Bacile
                                      ----------------------------------
                                      Nick A. Bacile
                                      Vice President and Controller
                                      (Principal Financial Officer)












                                          18