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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549

                                  FORM 10-Q

(MARK ONE)
[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                      SECURITIES EXCHANGE ACT OF 1934
                FOR THE QUARTERLY PERIOD ENDED JUNE  30, 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 JUNE 30, 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  consolidated  financial  statements and
notes  thereto  in  Transco's  1996  Annual  Report on Form 10-K and 1997  First
Quarter Report on Form 10-Q. 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 June 30, 1997, and results
of operations  for the three months and six months ended June 30, 1997 and 1996,
and cash flows for the six months ended June 30, 1997 and 1996.



                                           2

<PAGE>




                              TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                 CONDENSED CONSOLIDATED BALANCE SHEET
                                        (Thousands of Dollars)
                                              (Unaudited)

<TABLE>
<CAPTION>
                                                                           June 30,       December 31,
                                                                             1997             1996
                                                                     ---------------  ----------------
        ASSETS
<S>                                                                  <C>              <C>
Current Assets:
     Cash                                                            $         1,221  $         1,774
     Receivables:
        Affiliates                                                            11,865            4,837
        Others                                                                12,890           51,011
     Advances to affiliates                                                   35,987          148,496
     Transportation and exchange gas receivables:
        Affiliates                                                            22,019           22,111
        Others                                                                66,596           72,900
     Inventories                                                              99,707           69,461
     Deferred income tax asset                                                77,185           76,192
     Other                                                                    20,043           19,807
                                                                     ---------------  ----------------
        Total current assets                                                 347,513          466,589
                                                                     ---------------  ----------------

Investments                                                                   11,417            5,865
                                                                     ---------------  ----------------

Property, Plant and Equipment :
     Natural gas transmission plant                                        3,824,498        3,738,550
     Less-Accumulated depreciation and amortization                          399,601          318,234
                                                                      --------------  ----------------
        Total property, plant and equipment, net                           3,424,897        3,420,316
                                                                      --------------  ----------------

Other Assets                                                                 157,198          166,757
                                                                      --------------  ----------------

                                                                     $     3,941,025  $     4,059,527
                                                                     ===============  ================

</TABLE>

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





                                              3

<PAGE>





                               TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                  CONDENSED CONSOLIDATED BALANCE SHEET
                                         (Thousands of Dollars)
                                               (Unaudited)

<TABLE>
<CAPTION>
                                                                         June 30,          December 31,
                                                                           1997                1996
                                                                    ----------------      --------------
        LIABILITIES AND STOCKHOLDER'S EQUITY
<S>                                                                 <C>                   <C>
Current Liabilities:
     Current maturities of long-term debt                           $          7,630      $       99,000
     Payables:
        Affiliates                                                            45,463              70,283
        Others                                                                54,939              84,026
     Transportation and exchange gas payables:
        Affiliates                                                               197                 190
        Other                                                                 25,179              27,050
     Accrued liabilities                                                     123,196             104,289
     Reserve for rate refunds                                                131,183             172,823
                                                                    ----------------      --------------
        Total current liabilities                                            387,787             557,661
                                                                    ----------------      --------------

Long-Term Debt                                                               673,074             681,076
                                                                    ----------------      --------------

Other Long-Term Liabilities:
     Deferred income taxes                                                   834,040             833,928
     Other                                                                   177,803             167,648
                                                                    ----------------      --------------
        Total other long-term liabilities                                  1,011,843           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                                                       215,891             166,784
                                                                    ----------------      --------------
        Total common stockholder's equity                                  1,868,321           1,819,214
                                                                    ----------------      --------------

                                                                    $      3,941,025      $    4,059,527
                                                                    ================      ==============
</TABLE>


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


                                              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
                                                               June 30, 1997             June 30, 1996
                                                               -------------             -------------
<S>                                                       <C>                       <C>
Operating Revenues:
   Natural gas sales                                      $          151,952        $          190,984
   Natural gas transportation                                        151,671                   163,097
   Natural gas storage                                                34,561                    36,148
   Other                                                               1,914                     1,347
                                                          ------------------        ------------------
      Total operating revenues                                       340,098                   391,576
                                                          ------------------        ------------------

Operating Costs and Expenses:
   Cost of natural gas sales                                         151,952                   191,050
   Cost of natural gas transportation                                  8,168                    19,861
   Operation and maintenance                                          48,258                    50,502
   Administrative and general                                         30,084                    31,838
   Depreciation and amortization                                      39,275                    44,717
   Taxes - other than income taxes                                     9,396                     9,076
   Other                                                                 212                       298
                                                          ------------------        ------------------
      Total operating costs and expenses                             287,345                   347,342
                                                          ------------------        ------------------

Operating Income                                                      52,753                    44,234
                                                          ------------------        ------------------

Other (Income) and Other Deductions:
   Interest expense                                                   16,125                    16,510
   Interest income - affiliates                                       (1,168)                   (1,069)
                   - other                                                (8)                     (202)
   Allowance for equity and borrowed funds used during
     construction (AFUDC)                                             (1,543)                   (1,519)
   Miscellaneous other deductions, net                                   675                       961
                                                          ------------------        ------------------
      Total other deductions                                          14,081                    14,681
                                                          ------------------        ------------------

Income before Income Taxes                                            38,672                    29,553

Provision for Income Taxes                                            14,917                    11,510
                                                          ------------------        ------------------

Net Income                                                $           23,755        $           18,043
                                                          ==================        ==================
</TABLE>



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


                                                    5

<PAGE>




                                TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                                CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                          (Thousands of Dollars)
                                                (Unaudited)


<TABLE>
<CAPTION>
                                                                For the Six               For the Six
                                                               Months Ended              Months Ended
                                                               June 30, 1997             June 30, 1996
                                                               -------------             -------------
<S>                                                       <C>                     <C>
Operating Revenues:
   Natural gas sales                                      $          311,461      $            455,061
   Natural gas transportation                                        307,878                   339,785
   Natural gas storage                                                71,152                    72,920
   Other                                                               4,121                     3,037
                                                          ------------------      --------------------
      Total operating revenues                                       694,612                   870,803
                                                          ------------------      --------------------

Operating Costs and Expenses:
   Cost of natural gas sales                                         311,461                   455,060
   Cost of natural gas transportation                                 18,980                    44,052
   Operation and maintenance                                          91,898                    96,022
   Administrative and general                                         61,823                    64,584
   Depreciation and amortization                                      78,069                    90,165
   Taxes - other than income taxes                                    18,660                    18,325
   Other                                                                 804                       514
                                                          ------------------       -------------------
      Total operating costs and expenses                             581,695                   768,722
                                                          ------------------       -------------------

Operating Income                                                     112,917                   102,081
                                                          ------------------       -------------------

Other (Income) and Other Deductions:
   Interest expense                                                   33,315                    29,656
   Interest income - affiliates                                       (2,298)                   (2,200)
                   - other                                                (8)                     (256)
   Allowance for equity and borrowed funds used during
     construction (AFUDC)                                             (3,343)                   (2,558)
   Miscellaneous other deductions, net                                 1,243                     1,938
                                                          ------------------       -------------------
      Total other deductions                                          28,909                    26,580
                                                          ------------------       -------------------

Income before Income Taxes                                            84,008                    75,501

Provision for Income Taxes                                            32,582                    29,329
                                                          ------------------       -------------------

Net Income                                                $           51,426      $             46,172
                                                          ==================      ====================

</TABLE>


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




                                                    6

<PAGE>




                                TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                              CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                          (Thousands of Dollars)
                                                (Unaudited)

<TABLE>
<CAPTION>
                                                                           Six Months Ended
                                                                               June 30,
                                                                 --------------------------------------
                                                                         1997                    1996
                                                                 ----------------       ---------------
<S>                                                              <C>                    <C>
Cash flows from operating activities:
   Net income                                                    $         51,426       $        46,172
   Adjustments to reconcile net income to net cash provided
     by (used in) operating activities:
      Depreciation and amortization                                        81,744                92,726
      Deferred income taxes                                                  (881)              (40,673)
      Allowance for equity funds used during construction (AFUDC)          (2,310)               (1,739)
      Changes in operating assets and liabilities:
         Receivables                                                       31,093                 8,917
         Transportation and exchange gas receivables                        6,396                24,153
         Inventories                                                      (30,247)              (13,541)
         Payables                                                         (45,518)              (84,400)
         Transportation and exchange gas payables                          (1,864)              (32,727)
         Accrued liabilities                                               18,885               (37,797)
         Reserve for rate refunds                                         (41,640)               60,462
         Other, net                                                        18,922                21,421
                                                                 ----------------       ---------------
             Net cash provided by operating activities                     86,006                42,974
                                                                 ----------------       ---------------

Cash flows from financing activities:
   Additions to long-term debt                                                 -                100,000
   Retirement of long-term debt                                           (99,000)             (125,000)
   Debt issue costs                                                          (146)                 (157)
   Dividends on common stock                                               (2,319)                    -
                                                                 ----------------       ---------------
             Net cash used in financing activities                       (101,465)              (25,157)
                                                                 ----------------       ---------------

Cash flows from investing activities:
   Property, plant and equipment:
      Additions, net of equity AFUDC                                      (84,269)              (89,717)
      Changes in accounts payable and accrued liabilities                  (8,389)               (3,235)
   Advances to affiliates, net                                            112,509                76,536
   Other, net                                                              (4,945)               (1,759)
                                                                 ----------------       ---------------
             Net cash provided by (used in) investing activities           14,906               (18,175)
                                                                 ----------------       ---------------

Net decrease in cash                                                         (553)                 (358)
Cash at beginning of period                                                 1,774                 2,557
                                                                 ----------------       ---------------
Cash at end of period                                            $          1,221       $         2,199
                                                                 ================       ===============

Supplemental  disclosures of cash flow information:
Cash paid (refunded) during the year for :
      Interest (exclusive of amount capitalized)                 $         37,341       $        27,842
      Income taxes paid                                                    19,986                 8,616
      Income tax refunds received                                         (11,759)                 (417)

</TABLE>

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


                                                    7

<PAGE>



                       TRANSCONTINENTAL GAS PIPE LINE CORPORATION

                  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                          1.  CORPORATE STRUCTURE AND CONTROL

     Effective May 1, 1997, Transcontinental Gas Pipe Line Corporation (Transco)
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,  Transco  was a  wholly-owned  subsidiary  of
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  consolidated  financial  statements and the notes thereto  included in
Transco's  1996 Annual Report on Form 10-K and included in Transco's  1997 First
Quarter Report on Form 10-Q.

     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 or 1997 First Quarter  Report on Form 10-Q other than
as described below.



                                           8

<PAGE>



RATE AND REGULATORY MATTERS

     GENERAL RATE CASE (DOCKET NO. RP97-71)

     On November 1, 1996,  Transco  submitted to the Federal  Energy  Regulatory
Commission  (FERC) a general  rate case filing  principally  designed to recover
costs associated with increased  capital  expenditures.  These increased capital
expenditures primarily relate to system reliability, integrity and Clean Air Act
compliance.

     When stated on a comparable  basis, the rates Transco placed into effect on
May 1, 1997,  represent an annual cost of service increase of approximately  $47
million  over  the  cost  of  service  underlying  the  rates  contained  in the
settlement  of Transco's  last general rate filing  (Docket No.  RP95-197).  The
rates,   which  are  subject  to  refund,   are  designed   using  the  straight
fixed-variable rate design method.

     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  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 FERC's
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 made refunds on May 30, 1997 of  approximately  $79.0  million,
including  interest,  under Docket No. RP95-197 for which Transco had previously
provided a reserve.

     On August 1, 1997, the FERC issued an order modifying the initial  decision
issued on December 18, 1996 by the Administrative Law Judge (ALJ) in the Phase I
proceeding  determining the capital structure and rate of return for Transco. As
to capital  structure,  the FERC reversed the ALJ's use of the Williams  capital
structure,  and applied a new  modified  capital  structure  policy to find that
Transco's own capital structure,  consisting of 57.58 percent equity,  should be
used for developing the rate of return in this proceeding.  As to rate of return
on equity,  the FERC  affirmed  the overall  methodology  used by the ALJ in his
initial decision,  but reversed the ALJ's decision in order to revise the manner
in which the long-range growth component of that methodology is determined to be
consistent  with the FERC's recent  decisions on that issue.  The order requires
that Transco make a compliance filing  consistent with the revised  methodology,
and  states  that  refunds  will be  determined  once  the  FERC  rules  on that
compliance filing.  Transco has provided a reserve which it believes is adequate
for any required refunds.




                                           9

<PAGE>



     RATE OF RETURN CALCULATION

     As discussed  above,  the FERC recently issued an order  addressing,  among
other things, the authorized rate of return for Transco's 1995 rate case (Docket
No.  95-197).  In the order,  the FERC  continued  its  practice of  utilizing a
methodology for calculating rates of return that incorporates a long-term growth
rate  component.  The long-term  growth rate component used by the FERC is now a
projection of U.S. 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.  Transco
intends to  challenge  the FERC  order in an effort to have the FERC  change its
rate of return  methodology  with respect to both pending and future rate cases.

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 and 1997  First  Quarter  Report on Form 10-Q,
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 based on
the base rate of Citibank  N.A.,  three-month  certificates  of deposit of major
United  States money market banks,  federal  funds rate or the London  Interbank
Offered Rate. As of June 30, 1997,  Transco had no outstanding  borrowings under
this agreement.

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

     On July 31, 1997,  Transco  entered  into a $150  million,  five-year  bank
agreement,  with variable  interest rates based on the London Interbank  Offered
Rate.

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 based on the applicable bank's rate at the time of the
borrowings.  As of June 30, 1997,  Transco had no outstanding  borrowings  under
these facilities.



                                          10

<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.  At both  June 30,  1997 and
December 31, 1996,  interests in $100 million of these  receivables were held by
the investor.  On July 31, 1997,  Transco reduced the level of trade receivables
sold to $88 million.

     The Financial  Accounting  Standards Board issued 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 had no  significant  impact on Transco's  consolidated
results of operations, financial position or cash flows.



                                          11

<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
consolidated financial statements,  notes and management's  discussion contained
in Items 7 and 8 of Transco's  1996 Annual  Report on Form 10-K and in Transco's
1997  First  Quarter  Report  on Form 10-Q and with the  condensed  consolidated
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 June 30, 1997 there were no  outstanding  borrowings
under the Credit Agreement or the short-term money market  facilities.  Advances
due Transco by Williams totaled $36 million.

     On July 31, 1997,  Transco  entered  into a $150  million,  five-year  bank
agreement,  with variable  interest rates based on the London Interbank  Offered
Rate. Proceeds will be used for general corporate purposes.

     In the second half of 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 six
months ended June 30, 1997 were $92.7 million, compared to $93.0 million for the
six months ended June 30, 1996.


                                                               Six Months
                                                             Ended June 30,
                                                        --------------------
Capital Expenditures                                       1997         1996
--------------------                                    -----------  -------
                                                              (In Millions)

Market-Area Projects                                    $     31.9   $  14.7
Supply-Area Projects                                           7.3         -
Maintenance of Existing Facilities and Other Projects         53.5      78.3
                                                        -----------  -------
Total Capital Expenditures                              $     92.7   $  93.0
                                                        ===========  =======



Transco's capital expenditure budget for 1997 and future capital projects
are discussed in its 1996 Annual Report on Form 10-K and 1997 First Quarter
Report on Form 10-Q.

                                          12

<PAGE>



The following describes any developments related to those projects and any
new projects proposed by Transco.

     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 anticipated  annual gas
transportation  capacity  of 838.5  million  cubic  feet per day  (MMcf/d).  The
pipeline  will extend from ANR  Pipeline  Company's  (ANR)  existing  compressor
station at Defiance,  Ohio to Transco's  facilities  at Leidy,  Pennsylvania.  A
non-binding  open  season,  which began April 2, 1997 and ended on May 30, 1997,
drew annual  capacity  requests  for more than 750 MMcf/d from eleven  potential
shippers. Negotiations for precedent agreements are ongoing with these and other
interested  parties. A wholly-owned  subsidiary of Transco currently holds a 50%
interest in the  project,  which is expected to be in service for the  1999-2000
winter heating season.

     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 ended May 30, 1997 will determine the
facilities,  capacity  and  capital  cost of the  project.  MarketLink  received
non-binding  nominations  during the open season in excess of one billion  cubic
feet of gas per day.  Transco  plans to file for FERC  approval  of the  project
during the first quarter of 1998. It is targeted to be in service by November 1,
1999.

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  below, in Note 3 of the Notes
to Condensed  Consolidated  Financial  Statements  and in  Transco's  1997 First
Quarter  Report on Form 10- Q,  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.

     RATE  AND  REGULATORY  REFUNDS  As  discussed  in  Note 3 of the  Notes  to
Condensed Consolidated Financial Statements, on May 1, 1997, Transco placed into
effect new rates,  subject to refund,  under  Docket No.  RP97-71.  Transco  has
provided  reserves  which it believes is  adequate  for any refunds  that may be
required under Docket Nos. RP95-197 and RP97-71.

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

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                                 RESULTS OF OPERATIONS

NET INCOME AND OPERATING INCOME

     Transco's  net  income for the six  months  ended  June 30,  1997 was $51.4
million  compared to net income of $46.2  million for the six months  ended June
30,  1996.  Operating  income for the six months  ended June 30, 1997 was $112.9
million  compared to $102.1  million for the six months ended June 30, 1996. The
higher  operating  income of $10.8 million was primarily  attributable  to lower
administrative  and general expenses and operation and maintenance  expenses and
higher  revenues  due to  the  benefits  of the  final  phase  of the  Southeast
Expansion  Projects  placed in service in late 1996 and other  capital  projects
included in Docket No.  RP97-71  placed into effect on May 1, 1997. The positive
operating income variance was partially offset at the net income level by higher
interest  expense of $3.7 million due  primarily to funding of capital  projects
during the last half of 1996 and the first half of 1997,  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 $330 million for the six
months ended June 30, 1997 and $499 million for the  comparable  period in 1996,
Transco's  operating  expenses  for the six  months  ended June 30,  1997,  were
approximately  $18.4  million  lower  than the  comparable  period in 1996.  The
decrease was due to lower depreciation and amortization of $12.1 million,  lower
operation and maintenance  expenses of $4.1 million and lower administrative and
general expense of $2.8 million. The lower depreciation and amortization was due
to a reduction in  depreciation  rates that were  established  in Transco's June
1996  Stipulation  and Agreement in Docket No. RP95-197 and that continued to be
reflected  in rates in Docket No.  RP97-71.  However,  the  effects of the lower
depreciation   rates  on  depreciation  and   amortization   were  offset  by  a
corresponding  decrease in revenues. The lower operation and maintenance expense
was  primarily  due to a $3.0  million  decrease  in  miscellaneous  contractual
services,  a $1.7 million  decrease in lube oil and odorants  expense and a $1.3
million  decrease in other  supplies and  expenditures,  partly offset by a $1.4
million  increase in charges from others for the  operation  of certain  Transco
facilities.  The lower administrative and general expense was primarily due to a
$3.8 million decrease in the cost of employee benefits,  a $0.7 million decrease
in  property  and  liability  insurance  and a $0.6  million  decrease in office
building rent, partly offset by a $2.6 million increase in labor costs.

TRANSPORTATION SERVICES

     Transco's operating revenues related to its transportation services for the
six months ended June 30, 1997 were $308  million,  compared to $340 million for
the six months  ended June 30,  1996.  The lower  transportation  revenues  were
primarily due to lower gas transportation costs charged to Transco by others and
lower depreciation costs that are recovered in Transco's rates, partly offset by
the benefits of the final phase of the Southeast  Expansion  Projects  placed in
service in late 1996 and other capital  projects  included in Docket No. RP97-71
placed into effect on May 1, 1997.

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     As shown in the table below,  Transco's  total  market-area  deliveries and
production-area deliveries for the six months ended June 30, 1997 decreased 20.1
TBtu (3%) and 8.8 TBtu (8%),  respectively,  when compared to the same period in
1996. The decreased  deliveries were mainly due to milder weather  conditions in
the first quarter of 1997 as compared to the same period in 1996.

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


                                                              Six Months
                                                            Ended June 30,
                                                       ---------------------
Transco System Deliveries (TBtu)                         1997         1996
--------------------------------                         ----         ----

Market-area deliveries:
    Long-haul transportation                            472.2        488.8
    Market-area transportation                          220.9        224.4
                                                       ------       ------
        Total market-area deliveries                    693.1        713.2
Production-area transportation                           98.2        107.0
                                                       ------       ------
Total system deliveries                                 791.3        820.2
                                                       ======       ======


Average Daily Transportation Volumes (TBtu)               4.4          4.5
Average Daily Firm Reserved Capacity (TBtu)               5.4          5.0

    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.


                                          15

<PAGE>



    Transco's  operating revenues for the six months ended June 30, 1997 related
to its sales services  decreased $144 million to $311 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  when  compared to the prior year
since the  decrease in revenues  was offset by a  corresponding  decrease in the
cost of sales.


                                                           Six Months
                                                          Ended June 30,
                                                        -------------------
Gas Sales Volumes (TBtu)                                  1997        1996
------------------------                                  ----        ----

Long-term sales                                           97.4       120.8
Short-term sales                                           5.0        28.6
                                                         -----      ------
    Total gas sales                                      102.4       149.4
                                                         =====      ======


STORAGE SERVICES

    Transco's  operating  revenues  related to storage services of $71.2 million
for the six months ended June 30, 1997 were  comparable  to storage  revenues of
$72.9 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: August 14, 1997                By /s/ Nick A. Bacile
                                      ----------------------------------
                                      Nick A. Bacile
                                      Vice President and Controller
                                      (Principal Financial Officer)












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