1
        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, 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 1-4169

               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 7, 1997

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

                              INDEX



                                                        Page
                                                       Number

Part I.  Financial Information

Item 1.  Financial Statements .........................    3

Consolidated Balance Sheets at
  September 30, 1997 and December 31, 1996 ............  3-4

Consolidated Statements of Operations
  Three Months Ended September 30, 1997 and 1996 ......    5

Consolidated Statements of Income
  Nine Months Ended September 30, 1997 and 1996........    6

Consolidated Statements of Cash Flows
  Nine Months Ended September 30, 1997 and 1996 .......    7

Condensed Notes to Consolidated Financial Statements .. 8-11

Item 2.  Management's Narrative Analysis of
         the Results of Operations ....................12-13

Part II.  Other Information

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

Signature .............................................   15
<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                                    1997             1996
<S>                                         <C>               <C>
Current Assets:
 Cash and temporary cash investments         $       426       $       115
 Receivables:
   Trade                                           2,602             8,415
   Affiliates                                      2,602             1,409
   Other                                           2,693             2,136
 Advances to affiliates                           75,849           147,144
 Costs recoverable from customers                 15,020            26,620
 Inventories                                      15,359            15,081
 Deferred income taxes                            11,376             4,945
 Gas stored underground                           11,115            11,115
 Other                                             2,313             1,311
   Total current assets                          139,355           218,291

Advances to Affiliates                              -               25,000
                                                   
Investments, at Cost                               1,224             1,339

Property, Plant and Equipment:
 Natural gas transmission plant, at cost       1,014,876           958,896
 Less -- Accumulated depreciation and
   amortization                                   94,878            65,265
    Property, plant and equipment, net           919,998           893,631

Other Assets:
 Gas stored underground                          100,115           100,709
 Costs recoverable from customers                 47,558            54,817
 Other                                            24,214            13,313
   Total other assets                            171,887           168,839

   Total Assets                              $ 1,232,464       $ 1,307,100
</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,
                                                   1997             1996
<S>                                           <C>               <C>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
 Payables:
   Trade                                       $    3,491        $    4,850
   Affiliates                                      26,245            41,954
   Other                                            6,113             9,252
 Transportation and exchange gas payable              760             3,306
 Accrued liabilities                               75,840            72,617
 Costs refundable to customers                      1,100             1,626
   Total current liabilities                      113,549           133,605

Long-Term Debt                                    251,496           253,611

Other Liabilities and Deferred Credits:
 Deferred income taxes                            144,682           143,288
 Postretirement benefits other than pensions       37,712            43,765
 Other                                             49,147            47,951
   Total other liabilities and deferred credits   231,541           235,004

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                                        636,046           678,146
 Retained earnings (deficit)                         (169)            6,733
   Total stockholder's equity                     635,878           684,880

   Total Liabilities and Stockholder's Equity  $1,232,464        $1,307,100
</TABLE>
      The accompanying condensed notes are an integral part of these
               consolidated financial statements.
<PAGE>
        TEXAS GAS TRANSMISSION CORPORATION AND SUBSIDIARY
                                
              CONSOLIDATED STATEMENTS OF OPERATIONS
                     (Thousands of Dollars)
                           (Unaudited)
<TABLE>
<CAPTION>
                                          Three Months Ended September 30,
                                            1997                  1996
<S>                                      <C>                   <C>
Operating Revenues:
  Gas transportation                      $ 52,993              $ 53,944
  Gas sales                                  4,049                 9,929
  Other                                        116                   510
   Total operating revenues                 57,158                64,383

Operating Costs and Expenses:
  Cost of gas transportation                 5,693                 7,280
  Cost of gas sold                           3,949                 9,483
  Operation and maintenance                 15,918                17,487
  Administrative and general                14,509                14,164
  Depreciation and amortization             10,696                10,359
  Taxes other than income taxes              3,587                 3,717
   Total operating costs and expenses       54,352                62,490

Operating Income                             2,806                 1,893

Other (Income) Deductions:
  Interest expense                           4,880                 5,198
  Interest income                           (1,537)               (3,005)
  Miscellaneous other (income) deductions     (258)                   19
   Total other deductions                    3,085                 2,212

Loss Before Income Taxes                      (279)                 (319)

Provision for (Benefit from) Income Taxes     (233)                   43

Net Loss                                  $    (46)             $   (362)

</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,
                                              1997                 1996
<S>                                       <C>                  <C>
Operating Revenues:
  Gas transportation                       $ 209,256            $ 216,396
  Gas sales                                   18,412               44,553
  Other                                        1,044                1,528
    Total operating revenues                 228,712              262,477

Operating Costs and Expenses:
  Cost of gas transportation                  25,449               30,670
  Cost of gas sold                            18,471               43,976
  Operation and maintenance                   45,613               46,706
  Administrative and general                  42,875               45,507
  Depreciation and amortization               31,883               31,435
  Taxes other than income taxes               11,408               11,372
   Total operating costs and expenses        175,699              209,666

Operating Income                              53,013               52,811

Other (Income) Deductions:
  Interest expense                            14,904               15,796
  Interest income                             (6,164)              (9,939)
  Miscellaneous other (income) deductions       (426)                 611
   Total other deductions                      8,314                6,468

Income Before Income Taxes                    44,699               46,343

Provision for Income Taxes                    17,665               18,428

Net Income                                 $  27,034            $  27,915

</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,
                                                     1997           1996
<S>                                               <C>            <C> 
OPERATING ACTIVITIES:
  Net income                                       $  27,034      $ 27,915
 Adjustments to reconcile to cash provided
  from operations:
   Depreciation and depletion                         31,883        31,435
   Provision for deferred income taxes                (5,037)        8,805
   Changes in receivables sold                        (9,200)      (11,900)
   Changes in receivables                             14,456        18,356
   Changes in inventories                               (278)       (1,894)
   Changes in other current assets                    12,303        11,253
   Changes in accounts payable                        (4,498)      (16,868)
   Changes in accrued liabilities                        (56)      (38,007)
   Other, including changes in noncurrent assets
    and liabilities                                  (19,110)       11,897
     Net cash provided by operating activities        47,497        40,992

FINANCING ACTIVITIES:
   Proceeds from long-term debt                       99,031           -
   Payment of long-term debt                        (100,000)          -
   Dividends and returns of capital                  (76,036)      (61,394)
   Other                                              (8,163)          -
        Net cash used in financing activities        (85,168)      (61,394)

INVESTING ACTIVITIES:
 Property, plant and equipment:
   Capital expenditures, net of AFUDC                (59,601)      (29,004)
   Proceeds from sales and salvage values,
     net of costs of removal                           1,288          (691)
 Advances to affiliates, net                          96,295        50,352
     Net cash provided by investing activities        37,982        20,657

Increase in Cash and Cash Equivalents                    311           255

Cash and Cash Equivalents at Beginning of Period         115           206

Cash and Cash Equivalents at End of Period         $     426      $    461

Supplemental Disclosure of Cash Flow Information:
 Cash paid during the period for:
   Interest (net of amount capitalized)            $  15,413      $ 17,093
   Income taxes, net                                  27,268         9,210
</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, Seasonal Variation and Basis of Presentation

   Corporate Structure and Control

     Effective May 1, 1997, Texas Gas Transmission Corporation and its wholly
owned   subsidiary, TGT Enterprises, Inc.,(collectively, the Company)became
a wholly owned  subsidiary  of 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 current rate structure, the
Company experiences lower operating income in the second and third quarters
as compared to the first and fourth 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 (SEC). 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, 1997 and December 31, 1996; results of operations and cash
flows for the nine months ended September 30, 1997 and 1996; and results
of operations for the three months ended September 30, 1997 and 1996. 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 1996 Annual Report on Form 10-K and the Company's
1997 First and Second Quarter Reports on Form 10-Q.

     The Company was acquired in 1995 by Williams, and the acquisition was
accounted for using the purchase method of accounting. Accordingly, an
allocation of the purchase price was assigned to the assets and liabilities
of the Company, based on their estimated fair values.  The accompanying
consolidated financial statements reflect the pushdown of the purchase
price allocation (amounts in excess of book value) to the Company. Included
in property, plant and equipment at September 30, 1997 is an aggregate of
approximately $430 million related to amounts in excess of the original
cost of the regulated facilities as a result  of the Williams' and prior
acquisitions.  This amount  is being  amortized  over 40 years, the estimated
useful  lives  of these  assets  at  the date of acquisition, at approximately
$11 million  per year.  Current Federal Energy Regulatory  Commission (FERC)
policy does not permit the Company to recover through  its rates amounts in
excess of original cost.
<PAGE>
   Certain reclassifications have been made in the 1996 financial
statements to conform to the 1997 presentation.

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 FERC Order 636,  which,
among other things, required pipelines to unbundle their merchant
role  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.

    On  July 16, 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.  However, 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.  FERC Order 636-C is still subject
to potential rehearing at the FERC.

    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 the no-notice  service  and  FT
overrun rates, remains in effect. The Company expects to  pay  no
more  than  $80 million for 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 recovery  of  its  GSR
costs.

    General Rate Issues

    On  April  30,  1997, the Company filed a general  rate  case
(Docket  No.  RP97-344)  which was effective  November  1,  1997,
subject  to  refund.   This new rate case  reflects  a  requested
<PAGE>
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.   Settlement discussions commenced in October  1997.   The
Company  will  establish  a  reserve to  reflect  the  difference
between  the  rates effective on November 1, 1997 and  the  rates
expected  to ultimately be effective upon settlement of the  rate
case.

    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.  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, 1997, the Company  had  a  reserve  of
approximately  $3.4 million for estimated costs  associated  with
environmental assessment and remediation.  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 used lubricating oils containing polychlorinated
biphenyls  (PCBs)  and,     although the use  of  such  oils  was
discontinued   in  the  1970's,  has  discovered   residual   PCB
contamination  in equipment and soils at certain  gas  compressor
station sites.  The Company continues to work closely with the U.
S.  Environmental  Protection Agency (EPA) and  state  regulatory
authorities regarding PCB issues and has programs to  assess  and
remediate  such conditions where they exist, the costs  of  which
are a significant portion of the reserve discussed above.

    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
<PAGE>
the  EPA  or  other governmental authorities, and other  factors.
The  Company's current rate design incorporates the  recovery  of
anticipated  environmental costs, and it is the Company's  intent
to  continue  seeking  recovery of such  costs,  as  anticipated,
through  rate  filings.  Therefore, the estimated  recoveries  of
environmental assessment and remediation costs have been recorded
as regulatory assets in the accompanying balance sheets.

    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 (FASB)  has  issued
Statement  of  Financial  Accounting Standards  (SFAS)  No.  125,
"Accounting for Transfers and Servicing of Financial  Assets  and
Extinguishments  of  Liabilities,"  effective  for   transactions
occurring after December 31, 1996.  The adoption of this standard
has  not  had  a  material  impact  on  the  Company's  financial
position, results of operations or cash flow requirements.

    The FASB has issued two new accounting standards, SFAS No. 130,
"Reporting Comprehensive Income," and SFAS No. 131,  "Disclosures
about   Segments  of  an  Enterprise  and  Related  Information,"
effective  for  fiscal years beginning after December  15,  1997.
These  pronouncements  will not materially change  the  Company's
financial reporting and disclosures.

D. Financing

    The Company filed a Form S-3 Registration Statement with  the
SEC  on May 16, 1997, to register debt securities of $200 million
to be offered for sale on a delayed or continuous basis.  On July
15,  1997, the Company sold $100 million of 7 1/4% Debentures due
July  15, 2027.  The Debentures have no sinking funds and may  be
called at any time, at the Company's option, in whole or in part,
at a specified redemption price, plus accrued and unpaid interest
to  the  date  of  redemption.  Proceeds from  the  sale  of  the
Debentures were used to retire the Company's 9 5/8% Notes,  which
matured on July 15, 1997.
<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, 1997 Compared to
              Nine Months Ended September 30, 1996


    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  Service  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 for the nine months ended September 30, 1997
was  comparable to 1996 due primarily to the favorable resolution
in  1997  of  certain contractual issues and lower operating  and
maintenance  expenses,  substantially offset  by  favorable  1996
adjustments  to  rate refund accruals and  a  change  in  mix  of
transportation volumes under different rate structures.  Compared
to  1996,  net  income was $0.9 million lower, due  primarily  to
lower interest on advances to Williams, partially offset by lower
operating costs.

    Operating revenues decreased $33.8 million primarily  due  to
lower gas sales and lower transportation revenues attributable to
lower  costs  passed  through to customers  as  provided  in  the
Company's rates. Total deliveries were 562.8 TBtu and 578.2  TBtu
for the nine months of 1997 and 1996, respectively.

     Operating   expenses   decreased   $34   million   primarily
attributable  to lower costs of gas sold and lower costs  of  gas
transportation.  Costs of gas transportation are  passed  through
to customers and decreased partially due to the suspension of the
surcharge  for  the  collection of GSR costs applicable  to  firm
transportation, as discussed in Note B of the Condensed Notes  to
Consolidated Financial Statements.

                                
                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 capital requirements.

    The Company is a participant with other Williams subsidiaries
in  a  $1  billion credit agreement under which the  Company  may
borrow  up  to  $200  million, subject  to  borrowings  by  other
affiliated  companies.  Interest rates vary with  current  market
conditions.   To date, the Company has had no amounts outstanding
under this facility.
<PAGE>
    The Company filed a Form S-3 Registration Statement with  the
SEC  on May 16, 1997, to register debt securities of $200 million
to be offered for sale on a delayed or continuous basis.  On July
15,  1997, the Company sold $100 million of 7 1/4% Debentures due
July  15, 2027.  The Debentures have no sinking funds and may  be
called at any time, at the Company's option, in whole or in part,
at a specified redemption price, plus accrued and unpaid interest
to  the  date  of  redemption.  Proceeds from  the  sale  of  the
Debentures were used to retire the Company's 9 5/8% Notes,  which
matured on July 15, 1997.

    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,  while  the  remainder  are
classified  as  noncurrent.  The interest  rate  on  intercompany
demand  notes is the London Interbank Offered Rate on  the  first
day of the month plus 0.35%.

     The Company's capital expenditures for the first nine months
of  1997 and 1996 were $60 million and $29 million, respectively.
Capital  expenditures for 1997 are expected  to  approximate  $66
million.    The   Company's  debt  as  a  percentage   of   total
capitalization at September 30, 1997 and December  31,  1996  was
28.3% and 27.0%, 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  project  is
expected  to cost $6 million.  The Company proposes to  have  the
facilities in service by November 1, 1998.

    On  April  30,  1997, the Company filed a general  rate  case
(Docket  No.  RP97-344)  which was effective  November  1,  1997,
subject  to  refund.   This new 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.   Settlement discussions commenced in October  1997.   The
Company  will  establish  a  reserve to  reflect  the  difference
between  the  rates effective on November 1, 1997 and  the  rates
expected  to ultimately be effective upon settlement of the  rate
case.

    The  FERC  recently  issued orders  addressing,  among  other
things,  the  authorized  rates of  return  for  certain  of  the
Company's    interstate   natural   gas    pipeline    affiliates
(Affiliates).  In the orders, the FERC continued its practice  of
utilizing  a  methodology for calculating rates  of  return  that
incorporate  a  long-term growth rate component.   The  long-term
growth  rate  component used by the FERC is now a  projection  of
United  States  gross domestic product growth rates.   Generally,
calculating  rates  of  return  utilizing  a  methodology   which
includes  a long-term growth rate component results in  rates  of
return  that are lower than they would be if the long-term growth
rate  component  were  not  included  in  the  methodology.   The
Affiliates plan to challenge their respective FERC orders  in  an
effort  to  have the FERC change its rate of return  methodology.
Similar  issues  may  arise  in  the  Company's  new  rate  case,
effective  November 1, but would have no effect on the  Company's
current settled rates.


<PAGE>
                   PART II - OTHER INFORMATION



Item 6. Exhibits and Reports on Form 8-K

        (a) Exhibits
               
            None

        (b) Reports on Form 8-K

            None
<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 10, 1997          BY:/s/  S. W. Harris

                                         S. W. Harris
                              Duly Authorized Officer, Controller
                                  and Chief Accounting Officer