**____________**

**____________**

**(Mark      one)**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**For      the quarterly period ended June 30, 2006**

**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 001-03196**

**CONSOLIDATED      NATURAL GAS COMPANY**

**(Exact      name of registrant as specified in its charter)**

| **DELAWARE***(State                or other jurisdiction of incorporation or organization**)*                                          | **54-1966737***(I.R.S.                Employer Identification No.)* |
|----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
|                                                                                                                                   |                                                                |
| **120                TREDEGAR STREET****RICHMOND,                VIRGINIA***(Address                of principal executive offices**)* |  **23219***(Zip                Code**)*                        |
|                                                                                                                                   |                                                                |
| **(804)                819-2000***(Registrant's                telephone number)*                                                      |

**THE      REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND      (b)      OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE      FORMAT.**

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**INDEX**

|                                             |                                                                                                                               |
|--------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|
| **PART                I. Financial Information** |
|  Item                1.                     |  Consolidated                Financial Statements                                                                             |
|                                             |  Consolidated                Statements of Income - Three and Six Months Ended June 30, 2006                and 2005          |
|                                             |  Consolidated                Balance Sheets - June 30, 2006 and December 31,                2005                              |
|                                             |  Consolidated                Statements of Cash Flows - Six Months Ended June                30,                2006 and 2005 |
|                                             |  Notes                to Consolidated Financial Statements                                                                    |
|  Item                2.                     |  Management's                Discussion and Analysis of Results of Operations                                                 |
|  Item                4.                     |  Controls                and Procedures                                                                                       |
|                                             |  **PART                II. Other Information**                                                                                |
|  Item                1.                     |  Legal                Proceedings                                                                                             |
|  Item                1A.                    | Risk                Factors                                                                                                        |
|  Item                6.                     |  Exhibits                                                                                                                     |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**PART      I. FINANCIAL INFORMATION**

**ITEM      1. CONSOLIDATED FINANCIAL STATEMENTS**

**CONSOLIDATED      STATEMENTS OF INCOME**

**(Unaudited)      **

|                                                                                                                                 | **Three                Months Ended****June                30,**** ** | **Six                Months Ended****June                30,**** ** |
|--------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|--------------------------------------------------------------------------|
|                                                                                                                                 | **2006 **                                                             | 2005                                                                     | **2006 ** | 2005 |
| (millions)                                                                                                                           |                                                                       |
|                                                                                                                                 |                                                                       |                                                                     |   |   |
| **Operating                Revenue**                                                                                                 |                                                                       |                                                                     |   |   |
|      External                customers                                                                      | **$1,442 **                                                           | $1,361                                                              | **$4,065 ** | $3,476  |
|      Affiliated                customers                                                                    | **106 **                                                              | 216                                                                 | **308 ** | 477  |
| Total                operating revenue                                                                                               | **1,548 **                                                            | 1,577                                                               | **4,373 ** | 3,953  |
| **Operating                Expenses**                                                                                                |                                                                       |                                                                     |   |   |
| Purchased                gas:                                                                                                        |                                                                       |                                                                     |   |   |
|      External                suppliers                                                                      | **241 **                                                              | 385                                                                 | **1,419 ** | 1,427  |
|      Affiliated                suppliers                                                                    | **187 **                                                              | 163                                                                 | **359 ** | 296  |
| Electric                fuel and energy purchases:                                                                                   |                                                                       |                                                                     |   |   |
|      External                suppliers                                                                      | **27 **                                                               | 24                                                                  | **58 ** | 51  |
|      Affiliated                suppliers                                                                    | **29 **                                                               | 43                                                                  | **63 ** | 88  |
| Other                energy-related commodity purchases                                                                              | **186 **                                                              | 79                                                                  | **412 ** | 168  |
| Other                operations and maintenance:                                                                                     |                                                                       |                                                                     |   |   |
|      External                suppliers                                                                      | **242 **                                                              | 174                                                                 | **540 ** | 414  |
|      Affiliated                suppliers                                                                    | **46 **                                                               | 44                                                                  | **97 ** | 87  |
| Depreciation,                depletion and amortization                                                                              | **225 **                                                              | 169                                                                 | **443 ** | 335  |
| Other                taxes                                                                                                           | **59 **                                                               | 60                                                                  | **158 ** | 150  |
| Total                operating expenses                                                                                              | **1,242 **                                                            | 1,141                                                               | **3,549 ** | 3,016  |
| Income                from operations                                                                                                | **306 **                                                              | 436                                                                 | **824 ** | 937  |
| Other                income                                                                                                          | **11 **                                                               | 9                                                                   | **16 ** | 12  |
| Interest                and related charges:                                                                                         |                                                                       |                                                                     |   |   |
|      Interest                expense                                                                        | **72 **                                                               | 49                                                                  | **136 ** | 97  |
|      Interest                expense - junior subordinated notes payable to affiliated                trust | **4 **                                                                | 4                                                                   | **8 ** | 8  |
|      Total                interest and related charges                                                      | **76 **                                                               | 53                                                                  | **144 ** | 105  |
| Income                before income taxes                                                                                            | **241 **                                                              | 392                                                                 | **696 ** | 844  |
| Income                tax expense                                                                                                    | **91 **                                                               | 141                                                                 | **345 ** | 306  |
| **Net                Income**                                                                                                        | **$  150 **                                                 | $  251                                                    | **$  351 ** | $  538  |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**CONSOLIDATED      BALANCE SHEETS**

**(Unaudited)**

|                                                                                                   | **June                30,****2006**         | December                31,2005(1)      |
|--------------------------------------------------------------------------------------------------------|---------------------------------------------|-----------------------------------------|
| (millions)                                                                                             |                                        |
|                                                                                                   |                                        |                                    |
| **ASSETS**                                                                                             |                                        |                                    |
| **Current                Assets**                                                                      |                                        |                                    |
| Cash                and cash equivalents                                                               | **$     20 ** | $     44  |
| Accounts                receivable:                                                                    |                                        |                                    |
|     Customers                (less allowance for doubtful accounts of $15 and $27) | **966 **                               | 1,502                              |
|     Affiliates                                                                     | **80 **                                | 214                                |
| Other                receivables                                                                       | **100 **                               | 110                                |
| Inventories                                                                                            | **188 **                               | 366                                |
| Derivative                assets                                                                       | **1,671 **                             | 1,991                              |
| Deferred                income taxes                                                                   | **322 **                               | 510                                |
| Assets                held for sale                                                                    | **1,043 **                             | 2                                  |
| Prepayments                                                                                            | **54 **                                | 122                                |
| Other                                                                                                  | **219 **                               | 567                                |
|        Total                current assets                          | **4,663 **                             | 5,428                              |
| **Investments**                                                                                        | **314 **                               | 305                                |
| **Property,                Plant and Equipment**                                                       |                                        |                                    |
| Property,                plant and equipment                                                           | **19,339 **                            | 19,126                             |
| Accumulated                depreciation, depletion and amortization                                    | **(6,782)**                                 | (6,780)                                 |
|        Total                property, plant and equipment, net      | **12,557 **                            | 12,346                             |
| **Deferred                Charges and Other Assets**                                                   |                                        |                                    |
| Goodwill                                                                                               | **623 **                               | 623                                |
| Prepaid                pension cost                                                                    | **1,140 **                             | 1,086                              |
| Derivative                assets                                                                       | **768 **                               | 1,403                              |
| Regulatory                assets                                                                       | **117 **                               | 403                                |
| Other                                                                                                  | **322 **                               | 308                                |
|        Total                deferred charges and other assets       | **2,970 **                             | 3,823                              |
|        Total                assets                                  | **$20,504 **                           | $21,902                            |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**CONSOLIDATED      BALANCE SHEETS—(Continued)**

**(Unaudited)**

|                                                                                                      | **June                30,****2006** | December                31,2005(1) |
|-----------------------------------------------------------------------------------------------------------|-------------------------------------|------------------------------------|
| (millions)                                                                                                |                                |
|                                                                                                      |                                |
| **LIABILITIES                AND SHAREHOLDER’S EQUITY**                                             |                                |
| **Current                Liabilities**                                                                    |                                |                               |
| Securities                due within one year                                                             | **$   734 **    | $   734        |
| Short-term                debt                                                                            | **209 **                       | 187                           |
| Accounts                payable                                                                           | **924 **                       | 1,438                         |
| Payables                to affiliates                                                                     | **176 **                       | 151                           |
| Affiliated                current borrowings                                                              | **2,208 **                     | 1,922                         |
| Accrued                interest, payroll and taxes                                                        | **198 **                       | 250                           |
| Derivative                liabilities                                                                     | **2,836 **                     | 3,731                         |
| Liabilities                held for sale                                                                  | **388 **                       | --                            |
| Other                                                                                                     | **263 **                       | 489                           |
|        Total                current liabilities                        | **7,936 **                     | 8,902                         |
| **Long-Term                Debt**                                                                         |                                |                               |
| Long-term                debt                                                                             | **2,703 **                     | 2,708                         |
| Junior                subordinated notes payable to affiliated trust                                      | **206 **                       | 206                           |
|        Total                long-term debt                             | **2,909 **                     | 2,914                         |
| **Deferred                Credits and Other Liabilities**                                                 |                                |                               |
| Deferred                income taxes and investment tax credits                                           | **2,538 **                     | 2,321                         |
| Derivative                liabilities                                                                     | **1,487 **                     | 2,706                         |
| Regulatory                liabilities                                                                     | **126 **                       | 147                           |
| Other                                                                                                     | **590 **                       | 621                           |
|        Total                deferred credits and other liabilities     | **4,741 **                     | 5,795                         |
|        Total                liabilities                                | **15,586 **                    | 17,611                        |
| **Commitments                and Contingencies**(see                Note 13)                              |                                |                               |
| **Common                Shareholder’s Equity**                                                      |                                |                               |
| Common                stock**—**no                par value, 100 shares authorized and outstanding  | **1,816 **                     | 1,816                         |
| Other                paid-in capital                                                                      | **3,273 **                     | 3,273                         |
| Retained                earnings                                                                          | **1,032 **                     | 971                           |
| Accumulated                other comprehensive loss                                                       | **(1,203)**                         | (1,769)                            |
|        Total                common shareholder’s equity          | **4,918 **                     | 4,291                         |
|        Total                liabilities and shareholder’s equity | **$20,504 **                   | $21,902                       |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**C****ONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                                 | **Six                Months Ended****   June                30,** |
|--------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|
|                                                                                                                                 | **2006**                                                                         | 2005 |
| (millions)                                                                                                                           |                                                                             |
|                                                                                                                                 |                                                                             |   |
| **Operating                Activities**                                                                                              |                                                                             |   |
| Net                income                                                                                                            | **$  351 **                                                       | $  538  |
| Adjustments                to reconcile net income to net cash provided by operating                activities:                      |                                                                             |   |
|     Net                realized and unrealized derivative gains                                                  | **(275)**                                                                        | (4) |
|     Depreciation,                depletion and amortization                                                      | **443 **                                                                    | 335  |
|     Deferred                income taxes and investment tax credits, net                                         | **272 **                                                                    | 186  |
|     Charges                related to pending sale of gas distribution subsidiaries                              | **173 **                                                                    | --  |
|     Other                adjustments to net income                                                               | **(162)**                                                                        | (84) |
|     Changes                in:                                                                                   |                                                                             |   |
|         Accounts                receivable                                                   | **404 **                                                                    | 29  |
|        Affiliated                accounts receivables and payable                                 | **175 **                                                                    | 42  |
|         Inventories                                                                          | **138 **                                                                    | 43  |
|         Purchased                gas costs, net                                              | **146 **                                                                    | 64  |
|         Accounts                payable                                                      | **(459)**                                                                        | (184) |
|         Accrued                interest, payroll and taxes                                   | **(2)**                                                                          | (28) |
|         Margin                deposit assets and liabilities                                 | **(98)**                                                                         | (240) |
|         Deferred                revenues                                                     | **(88)**                                                                         | (125) |
|         Other                operating assets and liabilities                                | **153 **                                                                    | 30  |
| **            **Net                cash provided by operating activities | **1,171 **                                                                  | 602  |
| **Investing                Activities**                                                                                              |                                                                             |   |
| Additions                to gas and oil properties, including acquisitions                                                           | **(926)**                                                                        | (753) |
| Plant                construction and other property additions                                                                       | **(203)**                                                                        | (154) |
| Acquisition                of business, net of cash acquired                                                                         | **(91)**                                                                         | --  |
| Proceeds                from sales of gas and oil properties                                                                         | **20 **                                                                     | 86  |
| Other                                                                                                                                | **(13)**                                                                         | (12) |
|             Net                cash used in investing activities         | **(1,213)**                                                                      | (833) |
| **Financing                Activities**                                                                                              |                                                                             |   |
| Issuance                of short-term debt                                                                                           | **22 **                                                                     | --  |
| Issuance                of affiliated current borrowings, net                                                                        | **286 **                                                                    | 699  |
| Repayment                of long-term debt                                                                                           | **-- **                                                                     | (150) |
| Common                dividend payments                                                                                              | **(291)**                                                                        | (324) |
| Other                                                                                                                                | **3 **                                                                      | --  |
|             Net                cash provided by financing activities     | **20 **                                                                     | 225  |
| Decrease                in cash and cash equivalents                                                                                 | **(22)**                                                                         | (6) |
| Cash                and cash equivalents at beginning of period                                                                      | **44 **                                                                     | 19  |
| Cash                and cash equivalents at end of period(1)                                                                         | **$   22 **                                                  | $   13  |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**Note      1.  Nature of Operations**

**Note      2.  Significant Accounting Policies **

----

**Note      3.  Recently Adopted Accounting Standards**

***EITF      04-13***

*Accounting      for Purchases and Sales of Inventory with the Same Counterparty*

|                                                               | **Three                Months Ended****June                30,** | **Six                Months Ended****June                30,** |
|--------------------------------------------------------------------|------------------------------------------------------------------|----------------------------------------------------------------|
|                                                               | **2006**                                                         | 2005                                                           | **2006** | 2005 |
| (millions)                                                         |                                                             |
| Sale                activity included in operating revenue         | **$191**                                                         | $83                                                            | **$422** | $176 |
|                                                               |                                                             |                                                           |   |   |
| Purchase                activity included in operating expenses(1) | **185**                                                          | 79                                                             | **409** | 168 |

**Note      4.  Recently Issued Accounting Standards**

***FIN      48***

*Accounting      for Uncertainty in Income Taxes*

----

**Note      5.  Sale of Regulated Gas Distribution Subsidiaries**

|                                                                                                                    | **June                30, 2006**     |
|-------------------------------------------------------------------------------------------------------------------------|--------------------------------------|
| **(millions)**                                                                                                          |                                 |
|                                                                                                                    |                                 |
| **ASSETS**                                                                                                              |                                 |
| **Current                Assets**                                                                                       |                                 |
| Cash                                                                                                                    | **$    2 ** |
| Customer                accounts receivable, net                                                                        | **127 **                        |
| Unrecovered                gas costs                                                                                    | **30 **                         |
| Other                                                                                                                   | **66 **                         |
|           Total                current assets                         | **225 **                        |
|                                                                                                                    |                                 |
| **Investments**                                                                                                         | **2 **                          |
|                                                                                                                    |                                 |
| **Property,                Plant and Equipment**                                                                        |                                 |
| Property,                plant and equipment                                                                            | **1,089 **                      |
| Accumulated                depreciation, depletion and amortization                                                     | **(377)**                            |
|           Total                property, plant and equipment, net     | **712 **                        |
|                                                                                                                    |                                 |
| **Deferred                Charges and Other Assets**                                                                    |                                 |
| Regulatory                assets                                                                                        | **101 **                        |
| Other                                                                                                                   | **2 **                          |
|           Total                deferred charges and other assets      | **103 **                        |
|                                                                                                                    |                                 |
|           Assets                held for sale                         | **$1,042 **                     |
|                                                                                                                    |                                 |
| **LIABILITIES**                                                                                                         |                                 |
| **Current                Liabilities**                                                                                  |                                 |
| Accounts                payable                                                                                         | **$   46 **      |
| Payables                to affiliates                                                                                   | **20 **                         |
| Deferred                income taxes                                                                                    | **14 **                         |
| Other                                                                                                                   | **92 **                         |
|           Total                current liabilities                    | **172 **                        |
|                                                                                                                    |                                 |
| **Deferred                Credits and Other Liabilities**                                                               |                                 |
| Asset                retirement obligations                                                                             | **33 **                         |
| Deferred                income taxes                                                                                    | **164 **                        |
| Regulatory                liabilities                                                                                   | **10 **                         |
| Other                                                                                                                   | **9 **                          |
|           Total                deferred credits and other liabilities | **216**** **                    |
|                                                                                                                    |                                 |
|           Liabilities                held for sale                    | **$  388 **           |

----

|                                             | **Three                Months****    Ended                June 30,    ** | **Six                Months****    Ended                June 30,    ** |
|--------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                             | **2006**                                                                                                         | 2005                                                                                                           | **2006** | 2005 |
| (millions)                                       |                                                                                                             |
|                                             |                                                                                                             |                                                                                                           |   |   |
| Operating                Revenue                 | **$92 **                                                                                                    | $96                                                                                                       | **$449 ** | $412  |
|                                             |                                                                                                             |                                                                                                           |   |   |
| Income                (loss) before income taxes | **-- **                                                                                                     | 1                                                                                                         | **(128)** | 46  |

*Recognition      of Deferred Tax Assets for a Parent Company's Excess Tax Basis in the Stock      of a      Subsidiary that is Accounted for as a Discontinued Operation. *

*Applying      the Conditions of Paragraph 42 of FASB Statement No. 144 in Determining Whether      to Report Discontinued Operations*
** **

**Note      6.  Operating Revenue**

|                                                                                      | **Three                Months****    Ended                June 30,    ** | **Six                Months****    Ended                June 30,    ** |
|-------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                      | **                             2006**           |                              2005             | **                    2006** | 2005 |
| (millions)                                                                                |                                                                                                             |
|                                                                                      |                                                                                                             |                                                                                                           |   |   |
| Gas                sales:                                                                 |                                                                                                             |                                                                                                           |   |   |
|     Regulated                                                         | **$175**                                                                                                         | $217                                                                                                           | **$975** | $995 |
|     Nonregulated:                                                     |                                                                                                             |                                                                                                           |   |   |
|          External                customers   | **256**                                                                                                          | 239                                                                                                            | **874** | 654 |
|          Affiliated                customers | **100**                                                                                                          | 206                                                                                                            | **293** | 458 |
| Nonregulated                electric sales                                                | **78**                                                                                                           | 77                                                                                                             | **177** | 154 |
| Other                energy-related commodity sales                                       | **279**                                                                                                          | 134                                                                                                            | **596** | 278 |
| Gas                transportation and storage                                             | **203**                                                                                                          | 189                                                                                                            | **491** | 469 |
| Gas                and oil production                                                     | **428**                                                                                                          | 355                                                                                                            | **906** | 711 |
| Other                                                                                     | **29**                                                                                                           | 160                                                                                                            | **61** | 234 |
|      Total                operating revenue                      | **$1,548**                                                                                                       | $1,577                                                                                                         | **$4,373** | $3,953 |

----

**Note      7.     Income Taxes **

|                                                                                                       | **Six                Months****    Ended                June 30,    ** |
|------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                       | **2006**                                                                                                       | 2005 |
|                                                                                                       |                                                                                                           |   |
| U.S.                statutory rate                                                                         | **35.0%**                                                                                                      | 35.0% |
|                                                                                                       |                                                                                                           |   |
| Increases                (decreases) resulting from:                                                       |                                                                                                           |   |
|     Amortization                of investment tax credits                              | **(0.1)**                                                                                                      | --  |
|     Employee                pension and other benefits                                 | **(0.6)**                                                                                                      | (0.7) |
|     State                taxes, net of federal benefit                                 | **3.6 **                                                                                                  | 2.1  |
|     Changes                in valuation allowances                                     | **(3.4)**                                                                                                      | --  |
|     Recognition                of deferred taxes - stock of subsidiaries held for sale | **13.7 **                                                                                                 | --  |
|     Other,                net                                                          | **1.3 **                                                                                                  | (0.2) |
| Effective                tax rate                                                                          | **49.5%**                                                                                                      | 36.2% |

*.      *

**Note      8.  Comprehensive Income**

|                                                                                                                                                                                                                                                                                               | **Three                Months****    Ended                June 30,    ** | **Six                Months****    Ended                June 30,    ** |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                               | **                 2006**                                                                                   |                  2005                                                                                     | **                  2006** |                    2005 |
| (millions)                                                                                                                                                                                                                                                                                         |                                                                                                             |
|                                                                                                                                                                                                                                                                                               |                                                                                                             |                                                                                                           |   |   |
| Net                income                                                                                                                                                                                                                                                                          | **$150**                                                                                                         | $251                                                                                                      | **$351** | $538  |
| Other                comprehensive income (loss):                                                                                                                                                                                                                                                  |                                                                                                             |                                                                                                           |   |   |
|   Net                other comprehensive income (loss) associated with effective portion                of  changes in fair value of derivative cash                  flow hedges, net of taxes and                  amounts reclassified to earnings | **210**(1)                                                                                                       | (13)                                                                                                           | **566**(1) | (675)(2) |
| Total                comprehensive income (loss)                                                                                                                                                                                                                                                   | **$360**                                                                                                         | $238                                                                                                      | **$917** | $(137) |

----

**Note      9.  Hedge Accounting Activities**

*Accounting      for Derivative Instruments and Hedging Activities*

|                                                                                                                                                   | **Three                Months****    Ended                June 30,    ** | **Six                Months****    Ended                June 30,    ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                   | **2006**                                                                                                         | 2005                                                                                                           | **2006** | 2005 |
| (millions)                                                                                                                                             |                                                                                                             |                                                                                                           |   |   |
| Portion                of gains (losses) on hedging instruments determined to be ineffective                and                included in net income: |                                                                                                             |                                                                                                           |   |   |
|       Fair                value hedges                                                                                   | **$ (1)**                                                                                                   | $ --                                                                                                 | **$  (2)** | $  1  |
|       Cash                flow hedges(1)                                                                                 | **4 **                                                                                                      | (7)                                                                                                            | **20 ** | (12) |
| Net                ineffectiveness                                                                                                                     | **$  3 **                                                                                         | $ (7)                                                                                                     | **$ 18 ** | $(11) |

| (1) | Represents                hedge ineffectiveness, primarily due to changes in the fair value                differential between the delivery location and commodity specifications                of                derivatives held by our E&P operations and the delivery location and                commodity specifications of CNG’s forecasted gas and oil                sales. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                      | AOCI                After-Tax | Portion                Expected to be Reclassified to Earnings During the Next 12 Months                After-Tax | Maximum                Term |
|-------------------------------------------|-------------------------------|-------------------------------------------------------------------------------------------------------------------|-----------------------------|
| (millions)                                |                          |                                                                                                              |
|                                      |                          |                                                                                                              |                        |
| Commodities:                              |                          |                                                                                                              |                        |
|      Gas         | $  (641)            | $(415)                                                                                                            | 57                months    |
|      Oil         | (553)                         | (343)                                                                                                             | 30                months    |
|      Electricity | (3)                           | (3)                                                                                                               | 6                months     |
|      Other       | (6)                           | (6)                                                                                                               | 4                months     |
| Interest                Rate              | (1)                           | --                                                                                                           | 101                months   |
| Total                                     | $(1,204)                      | $(767)                                                                                                            |                        |

**Note      10.  Ceiling Test **

----

**Note      11.  Variable Interest Entities**

*Consolidation      of Variable Interest Entities,*

**Note      12.  Significant Financing Transactions**

***Joint      Credit Facilities***

***Other      Credit Facilities***

| **Facility                  Limit** |   | **Outstanding****Letters                  of Credit** | **Facility                  Capacity Remaining** | **Facility****Inception                  Date** | **Facility****Maturity                  Date** |
|-------------------------------------|--------|-------------------------------------------------------|--------------------------------------------------|-------------------------------------------------|------------------------------------------------|
| (millions)                          |   |                                                  |                                             |                                            |                                           |
| $100                                |   | $100                                                  | $---                                             | June                  2004                      | June                  2007                     |
| 100                                 |   |                       5           |                    95                       | August                  2004                    | August                  2009                   |
|    200(1)            |   | ---                                                   | 200                                              | December                  2005                  | December                  2010                 |
| $400                                |   | $105                                                  | $295                                             |                                            |                                           |

----

**Note      13.  Commitments and Contingencies **

***Insurance      for E&P Operations***

***Guarantees***

|                                            | **      Stated****      Limit** | **       Value****(1)** |
|-------------------------------------------------|---------------------------------------------------------------------------------------------|------------------------------------------------------------|
| (millions)                                      |                                                                                        |                                                       |
| Subsidiary                debt(2)               | $   201                                             | $   201            |
| Offshore                drilling commitments(3) | ---                                                                | 493                               |
| Commodity                transactions(4)        | 1,111                                                              | 536                               |
| Other                                           | 347                                                                | 249                               |
| Total                subsidiary obligations     | $1,659                                                             | $1,479                            |

| (1) | Represents                  the estimated portion of the guarantees’ stated limit that is utilized as                  of June 30, 2006 based upon prevailing economic conditions and                  fact                  patterns specific to each guarantee arrangement. For those guarantees                  related to obligations that are recorded as liabilities by our                  subsidiaries, the value includes the recorded                  amount. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Guarantees                  of debt of Dominion Oklahoma Texas Exploration and Production Inc.                  (DOTEPI). In the event of default by this subsidiary, we would                  be                  obligated to repay such amounts. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Performance                  and payment guarantees related to an offshore day work drilling                  contract,                  rig share agreements and related services for certain subsidiaries.                  There                  are no stated limits for these                  guarantees. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Guarantees                  of contract payments for certain subsidiaries involved in natural                  gas and                  oil production, natural gas delivery and energy marketing activities.                  These guarantees were provided to counterparties in order to facilitate                  physical and financial transactions in gas, pipeline capacity,                  transportation, oil, electricity and related commodities and services.                  If                  any of these subsidiaries fail to perform or pay under the contracts                  and                  the counterparties seek performance or payment, we would be obligated                  to satisfy such obligation. We and our subsidiaries receive similar                  guarantees as collateral for credit extended to others. The value                  provided                  includes certain guarantees that do not have stated                  limits. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

***Surety      Bonds and Letters of Credit***

**Note      14.  Credit Risk **

**Note      15.    Related Party Transactions**

***Transactions      with Affiliates***

|                                                            | **Three                Months****    Ended                June 30,    ** | **Six                Months****    Ended                June 30,    ** |
|-----------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                            | ** 2006**                                                                                                   |  2005                                                                                                     | ** 2006** |  2005 |
| (millions)                                                      |                                                                                                             |
|                                                            |                                                                                                             |                                                                                                           |   |   |
| Sales                of natural gas                             | **$100**                                                                                                         | $206                                                                                                           | **$293** | $458 |
| Gas                transportation and storage services provided | **4**                                                                                                            | 3                                                                                                              | **9** | 9 |
| Sales                of electricity                             | **4**                                                                                                            | 7                                                                                                              | **8** | 9 |
| Loss                on other energy-related commodity contracts | **3**                                                                                                            | --                                                                                                             | **3** | -- |
| Purchases                of natural gas                         | **187**                                                                                                          | 163                                                                                                            | **359** | 296 |
| Purchases                of electric fuel and energy            | **29**                                                                                                           | 43                                                                                                             | **63** | 88 |

----

***Transactions      with Dominion***

**Note      16.  Employee Benefit Plans **

|                                                                                   | **Pension                Benefits** | **Other                Postretirement Benefits** |
|----------------------------------------------------------------------------------------|-------------------------------------|--------------------------------------------------|
| (millions)                                                                             | **2006 **                      | 2005                                        | **2006** | 2005 |
| **Three                Months Ended June 30,**                                         |                                |
|   Service                cost                                                | **$ 3 **                  | $ 3                                    | **$ 3 ** | $ 3  |
|   Interest                cost                                               | **8 **                         | 7                                           | **6 ** | 6  |
|   Expected                return on plan assets                              | **(27)**                            | (25)                                             | **(4)** | (4) |
|   Amortization                of transition obligation                       | **- **                         | -                                           | **1 ** | 2  |
|   Amortization                of prior service cost                          | **- **                         | 1                                           | **- ** | -  |
|   Amortization                of net loss                                    | **   - **       |    -                         | **2 ** | 2  |
|   Net                periodic benefit cost (credit)                          | **$(16)**                           | $(14)                                            | **$8 ** | $9  |
|    Company’s                net periodic benefit cost (credit)(2) |  **$(27)**                     |  $(26)                                      |  **$11 ** |  $12  |
|                                                                                   |                                |                                             |   |   |
| **Six                Months Ended June 30,**                                           |                                |                                             |   |   |
|   Service                cost                                                | **$ 6 **                  | $ 6                                    | **$ 7 ** | $ 7  |
|   Interest                cost                                               | **16 **                        | 15                                          | **13 ** | 12  |
|   Expected                return on plan assets                              | **(53)**                            | (51)                                             | **(9)** | (8) |
|   Curtailment                loss(1)                                         | **- **                         | -                                           | **3 ** | -  |
|   Amortization                of transition obligation                       | **- **                         | -                                           | **2 ** | 3  |
|   Amortization                of prior service cost (credit)                 | **- **                         | 1                                           | **(1)** | -  |
|   Amortization                of net loss                                    | **   - **       |    -                         | **5 ** | 3  |
|   Net                periodic benefit cost (credit)                          | **$(31)**                           | $(29)                                            | **$20 ** | $17  |
|    Company’s                net periodic benefit cost (credit)(2) |  **$(54)**                     |  $(51)                                      |  **$30 ** |  $24  |

| (1) | Relates                to the pending sale of Peoples and Hope discussed in Note                5. |
|-----|----------------------------------------------------------------------------------------------------|

| (2) | Amounts                represent all benefit plans in which we participate, including benefit                plans covering multiple Dominion                subsidiaries. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Employer      Contributions**

**Note      17.  Condensed Consolidating Financial Information**

**Condensed      Consolidating Statement of Income Information**

| Three                Months Ended June 30, 2006   | CNG                (Parent Company) | DOTEPI              | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated         |
|---------------------------------------------------|-------------------------------------|---------------------|-----------------------------------|-----------------------------------------------|----------------------|
| (millions)                                        |                                |
|                                              |                                |                |                              |                                          |                 |
| Operating                revenue                  | **$   -- **     | **$191**            | **$1,501**                        | **$(144)**                                    | **$1,548**           |
| Operating                expense                  | **2 **                         | **122**             | **1,259**                         | **(141)**                                     | **1,242**            |
| Income                (loss) from operations      | **(2)**                             | **69**              | **242**                           | **(3)**                                       | **306**              |
| Other                income                       | **61 **                        | **--**              | **16**                            | **(66)**                                      | **11**               |
| Interest                and related charges       | **54 **                        | **22**              | **65**                            | **(65)**                                      | **76**               |
| Income                before income taxes         | **5 **                         | **47**              | **193**                           | **(4)**                                       | **241**              |
| Income                tax expense (benefit)       | **(10)**                            | **27**              | **73**                            | **1 **                                   | **91**               |
| Equity                in earnings of subsidiaries | **135 **                       | **--**              | **--**                            | **(135)**                                     | **--**               |
| Net                income                         | **$150 **                      | **$  20** | **$ ** **120**          | **$(140)**                                    | **$  150** |

| Six                Months Ended June 30, 2006     | CNG                (Parent Company) | DOTEPI              | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated               |
|---------------------------------------------------|-------------------------------------|---------------------|-----------------------------------|-----------------------------------------------|----------------------------|
| (millions)                                        |                                |
|                                              |                                |                |                              |                                          |                       |
| Operating                revenue                  | **$   -- **     | **$372**            | **$4,316**                        | **$(315)**                                    | **$4,373**                 |
| Operating                expense                  | **3 **                         | **258**             | **3,586**                         | **(298)**                                     | **3,549**                  |
| Income                (loss) from operations      | **(3)**                             | **114**             | **730**                           | **(17)**                                      | **824**                    |
| Other                income                       | **121 **                       | **--**              | **21**                            | **(126)**                                     | **16**                     |
| Interest                and related charges       | **107 **                       | **36**              | **127**                           | **(126)**                                     | **144**                    |
| Income                before income taxes         | **11 **                        | **78**              | **624**                           | **(17)**                                      | **696**                    |
| Income                tax expense                 | **99 **                        | **43**              | **208**                           | **(5)**                                       | **345**                    |
| Equity                in earnings of subsidiaries | **439 **                       | **--**              | **--**                            | **(439)**                                     | **--**                     |
| Net                income                         | **$351 **                      | **$  35** | **$  416**              | **$(451)**                                    | **$   351** |

----

| Three                Months Ended June 30, 2005   | CNG                (Parent Company) | DOTEPI          | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated     |
|---------------------------------------------------|-------------------------------------|-----------------|-----------------------------------|-----------------------------------------------|------------------|
| (millions)                                        |                                |
|                                              |                                |            |                              |                                          |             |
| Operating                revenue                  | $    -     | $186            | $1,508                            | $(117)                                        | $1,577           |
| Operating                expense                  | 1                              | 101             | 1,150                             | (111)                                         | 1,141            |
| Income                (loss) from operations      | (1)                                 | 85              | 358                               | (6)                                           | 436              |
| Other                income                       | 50                             | -               | 11                                | (52)                                          | 9                |
| Interest                and related charges       | 48                             | 16              | 40                                | (51)                                          | 53               |
| Income                before income taxes         | 1                              | 69              | 329                               | (7)                                           | 392              |
| Income                tax expense                 | -                              | 23              | 120                               | (2)                                           | 141              |
| Equity                in earnings of subsidiaries | 250                            | -               | -                                 | (250)                                         | -                |
| Net                income                         | $251                           | $  46 | $  209                  | $(255)                                        | $  251 |

| Six                Months Ended June 30, 2005     | CNG                (Parent Company)    | DOTEPI          | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated           |
|---------------------------------------------------|----------------------------------------|-----------------|-----------------------------------|-----------------------------------------------|------------------------|
| (millions)                                        |                                   |
|                                              |                                   |            |                              |                                          |                   |
| Operating                revenue                  | $   -    | $362            | $3,842                            | $(251)                                        | $3,953                 |
| Operating                expense                  | 1                                 | 203             | 3,055                             | (243)                                         | 3,016                  |
| Income                (loss) from operations      | (1)                                    | 159             | 787                               | (8)                                           | 937                    |
| Other                income                       | 99                                | -               | 14                                | (101)                                         | 12                     |
| Interest                and related charges       | 100                               | 31              | 75                                | (101)                                         | 105                    |
| Income                (loss) before income taxes  | (2)                                    | 128             | 726                               | (8)                                           | 844                    |
| Income                tax expense (benefit)       | (2)                                    | 43              | 268                               | (3)                                           | 306                    |
| Equity                in earnings of subsidiaries | 538                               | -               | -                                 | (538)                                         | -                      |
| Net                income                         | $538                              | $  85 | $  458                  | $(543)                                        | $   538 |

**Condensed      Consolidating Balance Sheet Information**

| At                June 30, 2006                                                               | CNG                (Parent Company) | DOTEPI                     | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated     |
|-----------------------------------------------------------------------------------------------|-------------------------------------|----------------------------|-----------------------------------|-----------------------------------------------|------------------|
| (millions)                                                                                    |                                |
|                                                                                          |                                |
| **Assets**                                                                                    |                                |                       |                              |                                          |             |
| Current                assets                                                                 | **$2,041**                          | **$   430** | **$ 4,430**                  | **$(2,238)**                                  | **$ 4,663** |
| Investment                in affiliates                                                       | **4,411**                           | **-- **               | **153**                           | **(4,350)**                                   | **214**          |
| Loans                to affiliates                                                            | **2,188**                           | **-- **               | **-- **                      | **(2,188)**                                   | **-- **     |
| Property,                plant and equipment, net                                             | **--  **                  | **4,494**                  | **8,888**                         | **(825)**                                     | **12,557**       |
| Deferred                charges and other assets                                              | **217**                             | **561**                    | **2,655**                         | **(363)**                                     | **3,070**        |
|      Total                assets                                     | **$8,857**                          | **$5,485**                 | **$16,126**                       | **$(9,964)**                                  | **$20,504**      |
|                                                                                          |                                |                       |                              |                                          |             |
| **Liabilities                & Shareholder’s Equity**                               |                                |                       |                              |                                          |             |
| Current                liabilities                                                            | **$1,124**                          | **$2,663**                 | **$ 8,067**                  | **$(3,918)**                                  | **$ 7,936** |
| Long-term                debt                                                                 | **2,505**                           | **198**                    | **-- **                      | **-- **                                  | **2,703**        |
| Notes                payable to affiliates                                                    | **206**                             | **-- **               | **1,099**                         | **(1,099)**                                   | **206**          |
| Deferred                credits and other liabilities                                         | **104**                             | **1,204**                  | **3,972**                         | **(539)**                                     | **4,741**        |
| Common                shareholder’s equity                                              | **4,918**                           | **1,420**                  | **2,988**                         | **(4,408)**                                   | **4,918**        |
|      Total                liabilities and shareholder’s equity | **$8,857**                          | **$5,485**                 | **$16,126**                       | **$(9,964)**                                  | **$20,504**      |

----

| At                December 31, 2005                                                           | CNG                (Parent Company) | DOTEPI                 | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated   |
|-----------------------------------------------------------------------------------------------|-------------------------------------|------------------------|-----------------------------------|-----------------------------------------------|----------------|
| (millions)                                                                                    |                                |
|                                                                                          |                                |
| **Assets**                                                                                    |                                |                   |                              |                                          |           |
| Current                assets                                                                 | $2,019                              | $   539 | $6,529                            | $(3,659)                                      | $5,428         |
| Investment                in affiliates                                                       | 3,697                               | --           | 147                               | (3,634)                                       | 210            |
| Loans                to affiliates                                                            | 2,188                               | --           | --                      | (2,188)                                       | --   |
| Property,                plant and equipment, net                                             | --                             | 4,079                  | 8,370                             | (103)                                         | 12,346         |
| Deferred                charges and other assets                                              | 373                                 | 555                    | 3,621                             | (631)                                         | 3,918          |
|      Total                assets                                     | $8,277                              | $5,173                 | $18,667                           | $(10,215)                                     | $21,902        |
|                                                                                          |                                |                   |                              |                                          |           |
| **Liabilities                & Shareholder’s Equity**                               |                                |                   |                              |                                          |           |
| Current                liabilities                                                            | $ 1,026                        | $2,646                 | $ 9,976                      | $ (4,746)                                | $ 8,902   |
| Long-term                debt                                                                 | 2,508                               | 200                    | --                           | --                                       | 2,708          |
| Notes                payable to affiliates                                                    | 206                                 | --                | 1,099                             | (1,099)                                       | 206            |
| Deferred                credits and other liabilities                                         | 246                                 | 1,231                  | 5,004                             | (686)                                         | 5,795          |
| Common                shareholder’s equity                                              | 4,291                               | 1,096                  | 2,588                             | (3,684)                                       | 4,291          |
|      Total                liabilities and shareholder’s equity | $8,277                              | $5,173                 | $18,667                           | $(10,215)                                     | $21,902        |

**Condensed      Consolidating Statement of Cash Flow Information**

| Six                Months Ended June 30, 2006                      | CNG                (Parent Company) | DOTEPI          | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated     |
|--------------------------------------------------------------------|-------------------------------------|-----------------|-----------------------------------|-----------------------------------------------|------------------|
| (millions)                                                         |                                |
|                                                               |                                |
| Net                cash provided by (used in) operating activities | **$295 **                      | **$ (92)** | **$1,256 **                  | **$(288)**                                    | **$1,171 ** |
| Net                cash used in investing activities               | **(30)**                            | **(492)**       | **(815)**                         | **124 **                                 | **(1,213)**      |
| Net                cash provided by (used in) financing activities | **(265)**                           | **580 **   | **(459)**                         | **164 **                                 | **20 **     |

| Six                Months Ended June 30, 2005                      | CNG                (Parent Company) | DOTEPI          | Other                Subsidiaries | Adjustments                & Eliminations | Consolidated |
|--------------------------------------------------------------------|-------------------------------------|-----------------|-----------------------------------|-----------------------------------------------|--------------|
| (millions)                                                         |                                |
|                                                               |                                |
| Net                cash provided by operating activities           | $331                           | $ 67  | $593                         | $(389)                                        | $602    |
| Net                cash provided by (used in) investing activities | 144                            | (272)           | (577)                             | (128)                                         | (833)        |
| Net                cash provided by (used in) financing activities | (474)                               | 201        | (18)                              | 516                                      | 225     |

**Note      18.  Operating Segments**

***Delivery***
** **
*Accounting      for the Effects of Certain Types of Regulation. *

***Energy***
** **

----

***E&P***

***Corporate***
* *
*** ***

|                                                     | Delivery     | Energy    | E&P    | Corporate           | Adjustments                &Eliminations | Consolidated                Total |
|----------------------------------------------------------|--------------|-----------|------------|---------------------|----------------------------------------------|-----------------------------------|
| (millions)                                               |         |
|                                                     |         |
| **Three                Months ended June 30, 2006**      |         |      |       |                |                                         |                              |
| Operating                revenue:                        |         |      |       |                |                                         |                              |
|    External                customers      | **$452**     | **$282**  | **$708**   | **$ --**       | **$ -- **                          | **$1,442**                        |
|    Affiliated                customers    | **-- ** | **99**    | **2**      | **5**               | **-- **                                 | **106**                           |
|    Intersegment                           | **1**        | **65**    | **42**     | **--**              | **(108)**                                    | **--**                            |
|    Total                operating revenue | **453**      | **446**   | **752**    | **5**               | **(108)**                                    | **1,548**                         |
| Net                income                                | **15**       | **52**    | **82**     | **1**               | **-- **                                 | **150**                           |
|                                                     |         |      |       |                |                                         |                              |
| Three                Months ended June 30, 2005          |         |      |       |                |                                         |                              |
| Operating                revenue:                        |         |      |       |                |                                         |                              |
|    External                customers      | $437         | $266      | $658       | $ --           | $ --                               | $1,361                            |
|    Affiliated                customers    | --      | 209       | 2          | 5                   | --                                      | 216                               |
|    Intersegment                           | 7            | 55        | 38         | --                  | (100)                                        | --                                |
|    Total                operating revenue | 444          | 530       | 698        | 5                   | (100)                                        | 1,577                             |
| Net                income                                | 17           | 49        | 185        | --                  | --                                      | 251                               |
|                                                     |         |      |       |                |                                         |                              |
| **Six                Months Ended June 30, 2006**        |         |      |       |                |                                         |                              |
| Operating                revenue:                        |         |      |       |                |                                         |                              |
|    External                customers      | **$1,837**   | **$710**  | **$1,518** | **$ -- ** | **$ -- **                          | **$4,065**                        |
|    Affiliated                customers    | **-- ** | **294**   | **5**      | **9 **         | **-- **                                 | **308**                           |
|    Intersegment                           | **2**        | **155**   | **95**     | **-- **        | **(252)**                                    | **--**                            |
|    Total                operating revenue | **1,839**    | **1,159** | **1,618**  | **9 **         | **(252)**                                    | **4,373**                         |
| Net                income (loss)                         | **100**      | **140**   | **295**    | **(184)**           | --                                      | **351**                           |
|                                                     |         |      |       |                |                                         |                              |
| Six                Months Ended June 30, 2005            |         |      |       |                |                                         |                              |
| Operating                revenue:                        |         |      |       |                |                                         |                              |
|    External                customers      | $1,671       | $582      | $1,223     | $ --           | $ --                               | $3,476                            |
|    Affiliated                customers    | --      | 456       | 11         | 10                  | --                                      | 477                               |
|    Intersegment                           | 23           | 115       | 72         | --                  | (210)                                        | --                                |
|    Total                operating revenue | 1,694        | 1,153     | 1,306      | 10                  | (210)                                        | 3,953                             |
| Net                income                                | 120          | 129       | 289        | --                  | --                                      | 538                               |

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF**

**RESULTS      OF OPERATIONS**

**Contents      of MD&A **

**Forward-Looking      Statements **

----

**Accounting      Matters **

**Critical      Accounting Policies and Estimates **

**Other**

***FIN      48***

*Accounting      for Uncertainty in Income Taxes*

***Accounting      for Pensions and Other Postretirement Benefits***

*Employer’s      Accounting for Defined Benefit Pension and Other Postretirement Plans, an      amendment of FASB Statements No. 87, 88, 106 and 132(R)*

**Results      of Operations**

|                                             | **2006** | 2005   | $                Change |
|--------------------------------------------------|----------|--------|-------------------------|
| **Second                Quarter**                |     |
|   Net                income (millions) | **$150** | $251   | $(101)                  |
| **Year-To-Date**                                 |     |   |                    |
|   Net                income (millions) | **$351** | $538   | $(187)                  |

**Overview      **

***Second      Quarter 2006 vs. 2005***

----

***Year-To-Date      2006 vs. 2005***

**Analysis      of Consolidated Operations **

|                                                    | **Second                Quarter** | **Year-To-Date** |
|---------------------------------------------------------|-----------------------------------|------------------|
|                                                    | **2006**                          | 2005             | $                Change | **2006** | 2005 | $                Change |
| (millions)                                              |                              |             |   |   |   |   |
| Operating                Revenue                        | **$1,548**                        | $1,577           | $(29) | **$4,373** | $3,953 | $420  |
| Operating                Expenses:                      |                              |             |   |   |   |   |
| Purchased                gas                            | **428**                           | 548              | (120) | **1,778** | 1,723 | 55  |
| Electric                fuel and energy purchases       | **56**                            | 67               | (11) | **121** | 139 | (18) |
| Other                energy-related commodity purchases | **186**                           | 79               | 107  | **412** | 168 | 244  |
| Other                operations and maintenance         | **288**                           | 218              | 70  | **637** | 501 | 136  |
| Depreciation,                depletion and amortization | **225**                           | 169              | 56  | **443** | 335 | 108  |
| Other                taxes                              | **59**                            | 60               | (1) | **158** | 150 | 8  |
| Other                income                             | **11**                            | 9                | 2  | **16** | 12 | 4  |
| Interest                and related charges             | **76**                            | 53               | 23  | **144** | 105 | 39  |
| Income                tax expense                       | **91**                            | 141              | (50) | **345** | 306 | 39  |

**Second      Quarter 2006 vs. 2005**

**Operating      Revenue **

| · | The                absence of $135 million of Hurricane Ivan business interruption insurance                proceeds received in 2005;                                                                                                                                                                                                                                                                                                                                     |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | A                $112 million decrease from gas aggregation activities primarily due                to                lower volumes;                                                                                                                                                                                                                                                                                                                                       |
| · | A                $42 million decrease from regulated gas distribution operations due                to the                loss of customers related to Energy Choice programs ($35 million)                and a                decline associated with milder weather and changes in customer usage                and                other factors ($27 million), partially offset by the recovery of                higher                gas prices ($20 million); and |
| · | A                $21 million decrease in revenue from sales of gas purchased by E&P                operations to facilitate gas transportation and other contracts;                partially                offset by                                                                                                                                                                                                                                                  |
| · | A                $108 million increase in sales of purchased oil under buy/sell                arrangements by E&P operations due to higher oil prices ($47 million)                and increased sales volumes ($61 million);                                                                                                                                                                                                                                         |
| · | A                $73 million increase in sales of oil production due to higher volumes                ($64                million) and increased prices ($9 million);                                                                                                                                                                                                                                                                                                      |
| · | A                $44 million increase in gas sales by nonregulated retail energy marketing                activities primarily due to higher volumes; and                                                                                                                                                                                                                                                                                                                  |
| · | A                $37 million increase in sales of extracted products, primarily due                to                increased prices and a contractual change for a portion of our gas                production processed by third parties. We now take title to and market                the                extracted products from this gas.                                                                                                                          |

**Operating      Expenses and Other Items **

***Purchased      gas expense***
* *
*Operating      Revenue.*

***Electric      fuel and energy purchases expense***

***Other      energy-related commodity purchases expense***
*Operating      Revenue*

----

***Other      operations and maintenance expense***

| · | A                $26 million increase attributable to higher production handling,                transportation and operating costs related to E&P operations;                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | An                $11 million increase in insurance costs for E&P operations due                primarily to higher insurance premiums incurred following the 2005                hurricanes;                                                                                                                                       |
| · | A                $10 million increase resulting from higher wages and incentive-based                compensation;                                                                                                                                                                                                                      |
| · | A                $10 million increase in bad debt expense primarily reflecting expenses                for                regulated gas operations related to low income home energy assistance                programs. These expenditures are recovered through rates and do not                impact                our net income; |
| · | $6                million of incremental expenses associated with Hurricanes Katrina                and                Rita;                                                                                                                                                                                                            |
| · | A                $5 million increase related to accounting, legal and certain                administrative and technical services provided by Dominion Services;                and                                                                                                                                                    |
| · | A                $3 million charge from the write-off of certain assets related to                the                pending sale of Peoples and Hope; partially offset by                                                                                                                                                              |
| · | A                $20 million benefit resulting from favorable price changes in the                fair                value of certain gas and oil derivatives de-designated as cash flow                hedges                following the 2005 hurricanes.                                                                           |

***Depreciation,      depletion and amortization expense***

***Interest      and related charges***

**Year-To-Date      2006 vs. 2005**

**Operating      Revenue **

| · | A                $246 million increase in sales of purchased oil under buy/sell                arrangements by E&P operations due to higher oil prices ($95 million)                and increased sales volumes ($151 million);                                                                                                                                   |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | A                $195 million increase in sales of gas and oil production due to higher                volumes ($156 million) and increased prices ($39                million);                                                                                                                                                                                      |
| · | A                $146 million increase in gas sales by nonregulated retail energy                marketing                activities, reflecting higher prices ($80 million) and increased                volumes                ($66 million); and                                                                                                                   |
| · | A                $72 million increase in sales of extracted products, primarily due                to                increased prices and a contractual change for a portion of our gas                production processed by third parties. We now take title to and market                the                extracted products from this gas; partially offset by |
| · | The                absence of $179 million of Hurricane Ivan business interruption insurance                proceeds received in 2005;                                                                                                                                                                                                                                |
| · | A                $59 million decrease in gas aggregation activities, due to lower                volumes                ($213 million) partially offset by higher prices ($154 million);                and                                                                                                                                                           |
| · | A                $28 million decrease in revenue from sales of gas purchased by E&P                operations to facilitate gas transportation and other                contracts.                                                                                                                                                                                |

**Operating      Expenses and Other Items **

***Purchased      gas expense***
* *
*Operating      Revenue.*

***Electric      fuel and energy purchases expense***

***Other      energy-related commodity purchases expense***
*Operating      Revenue*

----

***Other      operations and maintenance expense***

| · | A                $162 million charge from the write-off of certain regulatory assets                related to the pending sale of Peoples and Hope;                                                                                                                               |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | A                $53 million increase attributable to higher production handling,                transportation and operating costs related to E&P operations;                                                                                                                 |
| · | A                $33 million increase in expenses for regulated gas operations related                to                low income home energy assistance programs. These expenditures are                recovered through rates and do not impact our net                income; |
| · | A                $26 million increase in insurance costs for E&P operations due                primarily to higher insurance premiums incurred following the 2005                hurricanes;                                                                                   |
| · | A                $12 million increase resulting from higher wages, benefits and                incentive-based compensation; and                                                                                                                                                   |
| · | A                $6 million curtailment loss associated with the pending sale of Peoples                and Hope; partially offset by                                                                                                                                              |
| · | A                $138 million benefit resulting from favorable price changes in the                fair                value of certain gas and oil derivatives that were de-designated                as hedges                following the 2005 hurricanes.                     |

***Depreciation,      depletion and amortization expense***

***Other      taxes***

***Interest      and related charges***

***Income      tax expense***

**Segment      Results of Operations **

| **Second                  Quarter**       | **2006**            | **2005**        | **$                Change** |
|-------------------------------------------|---------------------|-----------------|-----------------------------|
| (millions)                                |                |            |                        |
|                                      |                |            |                        |
| Delivery                                  | **$ 15 ** | $ 17  | $(2)                        |
| Energy                                    | **52 **        | 49         | 3                      |
| E&P                                   | **82 **        | 185        | (103)                       |
| Primary                operating segments | **149 **       | 251        | (102)                       |
| Corporate                                 | **1 **         | --         | 1                      |
|     Consolidated      | **$150 **      | $251       | $(101)                      |
|                                      |                |            |                        |
| **Year-To-Date**                          |                |            |                        |
| (millions)                                |                |            |                        |
|                                      |                |            |                        |
| Delivery                                  | **$100 **      | $120       | $(20)                       |
| Energy                                    | **140 **       | 129        | 11                     |
| E&P                                   | **295 **       | 289        | 6                      |
| Primary                operating segments | **535 **       | 538        | (3)                         |
| Corporate                                 | **(184)**           | --         | (184)                       |
|     Consolidated      | **$351 **      | $538       | $(187)                      |

----

**Delivery      **

|                                                                    | **Second                Quarter** | **Year-To-Date** |
|-------------------------------------------------------------------------|-----------------------------------|------------------|
|                                                                    | **2006**                          | 2005             | %                Change | **2006** | 2005 | %                Change |
|                                                                    |                              |             |   |   |   |   |
| Gas                throughput (bcf):                                    |                              |             |   |   |   |   |
|     Gas                sales                        | **12**                            | 20               | (40)% | **62** | 83 | (25)% |
|     Gas                transportation               | **43**                            | 44               | (2)   | **130** | 136 | (4)   |
| Heating                degree days (gas service area)(1)                | **656**                           | 748              | (12)   | **3,236** | 3,770 | (14)   |
| Gas                delivery customer accounts(2):                       |                              |             |   |   |   |   |
|     Gas                sales                        | **789**                           | 1,002            | (21)   | **789** | 1,002 | (21)   |
|     Gas                transportation               | **892**                           | 677              | 32    | **892** | 677 | 32    |
| Unregulated                retail energy marketing customer accounts(2) | **1,392**                         | 1,149            | 21    | **1,392** | 1,149 | 21    |

|                                                              | **Second                Quarter****2006                vs. 2005****Increase                (Decrease)** | **Year-To-Date****2006                vs. 2005****Increase                (Decrease)** |
|-------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|
| (millions)                                                        |                                                                                                    |
|                                                              |                                                                                                    |                                                                                   |
| Interest                expense                                   | **$ (6)**                                                                                          | **$ (11)**                                                                        |
| Other                margins(1)                              | **(3)**                                                                                                 | **(12)**                                                                               |
| Weather                                                           | **(2)**                                                                                                 | **(15)**                                                                               |
| Depreciation,                depletion and amortization expense   | **4 **                                                                                             | **4 **                                                                            |
| Nonregulated                retail energy marketing operations(2) | **3 **                                                                                             | **9 **                                                                            |
| Other                                                             | **2 **                                                                                             | **5 **                                                                            |
| Change                in net income contribution                  | **$ (2)**                                                                                          | **$ (20)**                                                                        |

**Energy      **

|                                    | **Second                Quarter** | **Year-To-Date** |
|-----------------------------------------|-----------------------------------|------------------|
|                                    | **2006**                          | 2005             | %                Change | **2006** | 2005 | %                Change |
|                                    |                              |             |   |   |   |   |
| Gas                transportation (bcf) | **122**                           | 133              | (8)% | **356** | 434 | (18)% |

----

|                                                      | **Second                Quarter****2006                vs. 2005****Increase                (Decrease)** | **Year-To-Date2006                vs. 2005****Increase                (Decrease)** |
|-----------------------------------------------------------|---------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|
| (millions)                                                |                                                                                                    |
| Gas                transmission:                          |                                                                                                    |                                                                               |
|    Other                margins(1)         | **$15 **                                                                                           | **$20 **                                                                      |
|    Rate                settlement(2)  | **(5)**                                                                                                 | **(13)**                                                                           |
| Producer                services(3)                (4)    | **(4)**                                                                                                 | **11 **                                                                       |
| Other                                                     | **(3)**                                                                                                 | **(7)**                                                                            |
| Change                in net income contribution          | **$  3 **                                                                                | **$11 **                                                                      |

**E&P**

|                                                            | **Second                Quarter** | **Year-To-Date** |
|-----------------------------------------------------------------|-----------------------------------|------------------|
|                                                            | **2006**                          | 2005             | %                Change | **2006** | 2005 | %                Change |
|                                                            |                              |             |   |   |   |   |
| Gas                production (bcf)                             | **67.5**                          | 58.9             | 15% | **128.4** | 119.0 | 8% |
| Oil                production (million bbls)                    | **6.0**                           | 4.0              | 50  | **11.8** | 7.5 | 57  |
| Average                realized prices without hedging results: |                              |             |   |   |   |   |
|      Gas                (per mcf)(1)   | **$6.42**                         | $6.89            | (7) | **$7.21** | $6.57 | 10  |
|      Oil                (per bbl)      | **$59.37**                        | $47.23           | 26  | **$56.70** | $46.39 | 22  |
| Average                realized prices with hedging results:    |                              |             |   |   |   |   |
|      Gas                (per mcf)(1)   | **$4.23**                         | $4.46            | (5) | **$4.80** | $4.38 | 10  |
|      Oil                (per bbl)      | **$34.75**                        | $26.31           | 32  | **$36.61** | $27.32 | 34  |
| DD&A                (unit of production rate per mcfe)      | **$1.73**                         | $1.47            | 18  | **$1.74** | $1.47 | 18  |
|                                                            |

| (1) | Excludes                  $39 million and $58 million of revenue recognized in the second                  quarter of                  2006 and 2005, respectively, and $88 million and $125 million of                  revenue                  recognized in the year-to-date period of 2006 and 2005, respectively,                  under the volumetric production payment agreements described in                  Note 10 to                  the Consolidated Financial Statements in our Annual Report on Form                  10-K                  for the year ended December 31, 2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                    | **Second                Quarter****2006                vs. 2005****Increase                (Decrease)** | **Year-To-Date2006                vs. 2005****Increase                (Decrease)** |
|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|
| (millions)                                                              |                                                                                                    |
| Business                interruption insurance                          | **$ (86)**                                                                                         | **$(116)**                                                                         |
| Depreciation,                depletion and amortization expense         | **(39)**                                                                                                | **(73)**                                                                           |
| Operations                and maintenance expense(1)                (2) | **(26)**                                                                                                | **57 **                                                                       |
| Interest                expense                                         | **(13)**                                                                                                | **(25)**                                                                           |
| Gas                and oil—prices                                 | **(13)**                                                                                                | **48 **                                                                       |
| Income                tax expense(3)                                    | **(12)**                                                                                                | **(26)**                                                                           |
| Gas                and oil—production(4)                          | **84 **                                                                                            | **132 **                                                                      |
| Other                                                                   | **2 **                                                                                             | **9 **                                                                        |
| Change                in net income contribution                        | **$(103)**                                                                                              | **$   6 **                                                     |

| (1) | Higher                  operations and maintenance expenses for the quarter, primarily                  reflecting                  increased production handling costs and insurance costs, partially                  offset                  by the impact of favorable changes in the fair value of certain                  gas and                  oil derivatives that were de-designated as hedges following the                  2005                  hurricanes. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Lower                  operations and maintenance expenses year-to-date, primarily reflecting                  the                  impact of favorable changes in the fair value of certain gas and                  oil                  derivatives that were de-designated as hedges following the 2005                  hurricanes. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Primarily                  due to the effect of revisions to the Texas franchise tax enacted                  in May                  2006 and a revision to estimated state income tax apportionment                  percentages on accumulated deferred income taxes during the first                  quarter                  of 2006. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Represents                  an increase in gas and oil production primarily resulting from                  deepwater                  Gulf of Mexico locations. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **Natural                Gas**    | **Oil**                                                               |
|--------|-----------------------------------|-----------------------------------------------------------------------|
| Year   | **Hedged****production****(bcf)** | **Average****hedge                price****(per                mcf)** | **Hedged****production****(million bbls)** | **Average****hedge                price****(per                bbl)** |
| 2006   |   97.2                  | $4.66                                                                 |  7.0 | $25.02 |
| 2007   | 195.5                             |  5.91                                                            | 10.0 |  33.41 |
| 2008   | 149.3                             |  8.25                                                            |  5.0 |  49.36 |

**Corporate      **

|                                                             | **Second                Quarter**        | **Year-To-Date**                                                                           |
|------------------------------------------------------------------|------------------------------------------|--------------------------------------------------------------------------------------------|
|                                                             | **2006**                                 | 2005                                                                                       | $                Change | **2006** | 2005 | $                Change |
| (millions)                                                       |                                     |                                                                                       |   |   |   |   |
| Specific                items attributable to operating segments | **$(10)**                                | $ --                                                                             | $ (10) | **$(115)** | $ --  | $(115) |
| Other                corporate operations                        | **11 **                             |                            --  | 11  | **(69)** |                            --  | (69) |
| Total                net income (expense)                        | **$                  1 ** | $ --                                                                             | $   1  | **$(184)** | $ --  | $(184) |

----

***Specific      Items Attributable to Operating Segments***

***Other      Corporate Operations***

*.      *

**Credit      Risk**

|                                                                            | **Gross                Credit Exposure** |
|---------------------------------------------------------------------------------|------------------------------------------|
| (millions)                                                                      |                                     |
| Investment                grade(1)                                              | $361                                     |
| Non-investment                grade(2)                                          | 26                                       |
| No                external ratings:                                             |                                     |
|    Internally                rated—investment grade(3)     | 34                                       |
|    Internally                rated—non-investment grade(4) | 130                                      |
|       Total                                       | $551                                     |

| (1) | Designations                  as investment grade are based on minimum credit ratings assigned                  by                  Moody’s Investors Service (Moody’s) and Standard & Poor’s Rating                  Services, (Standard & Poor’s). The five largest counterparty                  exposures, combined, for this category represented approximately                  31% of                  the total gross credit exposure. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The                  five largest counterparty exposures, combined, for this category                  represented approximately 3% of the total gross credit                  exposure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The                  five largest counterparty exposures, combined, for this category                  represented approximately 4% of the total gross credit                  exposure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The                  five largest counterparty exposures, combined, for this category                  represented approximately 4% of the total gross credit                  exposure. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Future      Issues and Other Matters**

**Minimum      Service Standards**

**Ohio      Energy Choice Pilot Program**

**Cove      Point Expansion**

**Potential      Future Divestiture**

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**ITEM      4. **
**CONTROLS      AND PROCEDURES**

**PART      II. OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

*Other      Matters*

----

**CONSOLIDATED      NATURAL GAS COMPANY**

**PART      II. OTHER INFORMATION**

**ITEM      1A. **
**RISK      FACTORS**

*Forward-Looking      Statements*

**Our      exploration and production business is dependent on factors that cannot be      predicted or controlled and that could**
**damage      facilities, disrupt production or reduce the book value of our      assets.**

----

**CONSOLIDATED      NATURAL GAS**
**COMPANY**

**PART      II. OTHER INFORMATION**

**I**
**TEM      6. **
**EXHIBITS** 

| **(a)                Exhibits:** |
|----------------------------------|
|                             |
|                             | 3.1 |   | Certificate                of Incorporation of Consolidated Natural Gas Company (Exhibit (3A)(i)                to                Form 10-K for the fiscal year ended December 31, 1999, File No. 1-3196,                incorporated by reference). |
|                             | 3.2 |   | Certificate                of Amendment of Certificate of Incorporation, dated January 28, 2000                (Exhibit (3A)(ii) to Form 10-K for the fiscal year ended December                31,                1999, File No. 1-3196, incorporated by reference). |
|                             | 3.3 |   | Bylaws                as in effect on December 15, 2000 (Exhibit 3B to Form 10-K for the                fiscal                year ended December 31, 2000, File No. 1-3196, incorporated by                reference). |
|                             | 4 |   | Consolidated                Natural Gas Company agrees to furnish to the Securities and Exchange                Commission upon request any other instrument with respect to long-term                debt as to which the total amount of securities authorized does not                exceed                10% of its total consolidated assets. |
|                             | 12 |   | Ratio                of earnings to fixed charges (filed herewith). |
|                             | 31.1 |   | Certification                by Registrant’s Chief Executive Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002 (filed herewith). |
|                             | 31.2 |   | Certification                by Registrant’s Chief Financial Officer pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002 (filed herewith). |
|                             | 32 |   | Certification                to the Securities and Exchange Commission by Registrant’s Chief Executive                Officer and Chief Financial Officer, as required by Section 906 of                the                Sarbanes-Oxley Act of 2002 (filed herewith). |
|                             | 99 |   | Condensed                consolidated earnings statements (unaudited) (filed                herewith). |

----

|                          | **CONSOLIDATED                NATURAL GAS COMPANY**Registrant                                                                                                                                                                                                                                            |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                                                                                                                                                                                                                                                                     |
| August                3, 2006 |                   /s/                Steven A.                Rogers                        |
|                          | Steven                A. RogersSenior                Vice President and Controller(Principal                Accounting Officer)                                                                                                                                                                          |
|                          |                                                                                                                                                                                                                                                                                                     |