UNITED STATES
SECURITIES AND EXCHANGE COMMISSION


Washington, D.C.
20549


________________




Form 10-Q


(Mark
One)




R
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934For
      the quarterly period ended September 30, 2008OR£
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF
              THE
      SECURITIES EXCHANGE ACT OF 1934For the
      transition period
      from                                                                         to





Commission
File Number 1-4101


________________




Tennessee
Gas Pipeline Company


(Exact
Name of Registrant as Specified in Its Charter)





Delaware
            74-1056569(State
      or Other Jurisdiction
              of  Incorporation
      or Organization)
            (I.R.S.
      Employer
              Identification No.)El Paso Building1001
      Louisiana Street
              Houston,
      Texas
            77002(Address
      of Principal Executive Offices)
            (Zip
      Code)





Telephone
Number: (713) 420-2600





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or     15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past
90 days.  Yes þ No o





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large accelerated
      filer o
            Accelerated
      filer o
            Non-accelerated filer þ
            Smaller
      reporting company o(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes o No þ





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.





Common
stock, par value $5 per share. Shares outstanding on November 7, 2008:
208





TENNESSEE GAS
PIPELINE COMPANY MEETS THECONDITIONS
OF GENERAL INSTRUCTION
H(1)(a) AND (b) TO FORM 10-Q AND IS THEREFORE FILING THIS REPORT WITH A
REDUCED DISCLOSURE FORMAT AS PERMITTED BY SUCH
INSTRUCTION.

















TENNESSEE
GAS PIPELINE COMPANY





TABLE
OF CONTENTS





Caption
            
            PagePART
      I — Financial InformationItem  1.
            Financial  Statements
            
            1Item  2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            
            9Item  3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            
            *Item  4T.
            Controls
      and Procedures
            
            12PART
      II — Other InformationItem  1.
            Legal
      Proceedings
            
            13Item  1A.
            Risk
      Factors
            
            13Item  2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            
            *Item  3.
            Defaults
      Upon Senior Securities
            
            *Item  4.
            Submission
      of Matters to a Vote of Security Holders
            
            *Item  5.
            Other
      Information
            
            13Item  6.
            Exhibits
            
            13Signatures
            
            14


____________





*
      We have not included a response to this item in this document since no
      response is required pursuant to the  reduced disclosure format
      permitted by General Instruction H to
  Form 10-Q.





Below is
a list of terms that are common to our industry and used throughout this
document:





/d
            = per
      day
            Dth = dekathermBBtu
            = billion
      British thermal units





When
      we refer to cubic feet measurements, all measurements are at a pressure of
      14.73 pounds per square inch.




When
      we refer to “us”, “we”, “our”, or “ours”, we are describing Tennessee Gas
      Pipeline Company and/or our
subsidiaries.





i


PART
I — FINANCIAL INFORMATION





Item 1.  Financial
Statements





TENNESSEE
GAS PIPELINE COMPANY





CONDENSED
CONSOLIDATED STATEMENTS OF INCOME


(In
millions)


(Unaudited)





Quarter
      Ended
            
            Nine
      Months EndedSeptember
      30,
            
            September
      30,2008
            
            2007
            
            
            2008
            
            2007Operating
      revenues
            
            $
            209
            
            
            $
            193
            
            
            $
            671
            
            
            $
            639Operating
      expensesOperation
      and maintenance
            
            
            106
            
            
            
            91
            
            
            
            278
            
            
            
            243Depreciation
      and amortization
            
            
            46
            
            
            
            42
            
            
            
            136
            
            
            
            126(Gain)/loss
      on long-lived assets
            
            
            —
            
            
            
            —
            
            
            
            24
            
            
            
            (7
            )Taxes,
      other than income taxes
            
            
            8
            
            
            
            13
            
            
            
            40
            
            
            
            44160
            
            
            
            146
            
            
            
            478
            
            
            
            406Operating
      income
            
            
            49
            
            
            
            47
            
            
            
            193
            
            
            
            233Earnings
      from unconsolidated affiliate
            
            
            2
            
            
            
            3
            
            
            
            10
            
            
            
            11Other
      income, net
            
            
            2
            
            
            
            6
            
            
            
            8
            
            
            
            15Interest
      and debt expense
            
            
            (33
            )
            
            
            (32
            )
            
            
            (101
            )
            
            
            (97
            )Affiliated
      interest income, net
            
            
            7
            
            
            
            12
            
            
            
            24
            
            
            
            34Income
      before income taxes
            
            
            27
            
            
            
            36
            
            
            
            134
            
            
            
            196Income
      taxes
            
            
            11
            
            
            
            14
            
            
            
            53
            
            
            
            76Net
      income
            
            $
            16
            
            
            $
            22
            
            
            $
            81
            
            
            $
            120





See
accompanying notes.





1


TENNESSEE
GAS PIPELINE COMPANY





CONDENSED
CONSOLIDATED BALANCE SHEETS


(In millions,
except for share amounts)


(Unaudited)





September
      30,
            
            
            December 31,2008
            
            
            2007ASSETSCurrent
      assetsCash
      and cash equivalents
            
            $
            —
            
            
            $
            —Accounts
      and notes receivableCustomer
            
            
            29
            
            
            
            14Affiliates
            
            
            151
            
            
            
            71Other
            
            
            7
            
            
            
            27Materials
      and supplies
            
            
            37
            
            
            
            34Deferred
      income taxes
            
            
            17
            
            
            
            10Other
            
            
            16
            
            
            
            9Total
      current assets
            
            
            257
            
            
            
            165Property,
      plant and equipment, at cost
            
            
            4,202
            
            
            
            4,048Less
      accumulated depreciation and amortization
            
            
            811
            
            
            
            7403,391
            
            
            
            3,308Additional
      acquisition cost assigned to utility plant, net
            
            
            2,012
            
            
            
            2,040Total
      property, plant and equipment, net
            
            
            5,403
            
            
            
            5,348Other
      assetsNotes
      receivable from affiliates
            
            
            1,090
            
            
            
            1,034Investment
      in unconsolidated affiliate
            
            
            81
            
            
            
            84Other
            
            
            57
            
            
            
            521,228
            
            
            
            1,170Total
      assets
            
            $
            6,888
            
            
            $
            6,683LIABILITIES
      AND STOCKHOLDER’S EQUITYCurrent
      liabilitiesAccounts
      payableTrade
            
            $
            45
            
            
            $
            66Affiliates
            
            
            30
            
            
            
            23Other
            
            
            56
            
            
            
            56Taxes
      payable
            
            
            79
            
            
            
            31Contractual
      deposits
            
            
            49
            
            
            
            32Accrued
      interest
            
            
            44
            
            
            
            24Other
            
            
            53
            
            
            
            17Total
      current liabilities
            
            
            356
            
            
            
            249Long-term
      debt
            
            
            1,605
            
            
            
            1,603Other
      liabilitiesDeferred
      income taxes
            
            
            1,319
            
            
            
            1,302Regulatory
      liabilities
            
            
            187
            
            
            
            178Other
            
            
            46
            
            
            
            571,552
            
            
            
            1,537Commitments
      and contingencies (Note 4)Stockholder’s
      equityCommon
      stock, par value $5 per share; 300 shares authorized;
      208 shares issued and outstanding
            
            
            —
            
            
            
            —Additional
      paid-in capital
            
            
            2,209
            
            
            
            2,209Retained
      earnings
            
            
            1,166
            
            
            
            1,085Total
      stockholder’s equity
            
            
            3,375
            
            
            
            3,294Total
      liabilities and stockholder’s equity
            
            $
            6,888
            
            
            $
            6,683








See
accompanying notes.


2


TENNESSEE
GAS PIPELINE COMPANY





CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions)


(Unaudited)





Nine
      Months EndedSeptember 30,2008
            
            
            2007Cash
      flows from operating activitiesNet
      income
            
            $
            81
            
            
            $
            120Adjustments
      to reconcile net income to net cash from operating
    activitiesDepreciation
      and amortization
            
            
            136
            
            
            
            126(Gain)/loss on long-lived
      assets
            
            
            24
            
            
            
            (7
            )Earnings
      from unconsolidated affiliate, adjusted for cash
    distributions
            
            
            3
            
            
            
            16Deferred
      income taxes
            
            
            10
            
            
            
            51Other
      non-cash income items
            
            
            (3
            )
            
            
            (8
            )Asset
      and liability changes
            
            
            103
            
            
            
            (73
            )Net
      cash provided by operating activities
            
            
            354
            
            
            
            225Cash
      flows from investing activitiesAdditions
      to property, plant and equipment
            
            
            (203
            )
            
            
            (257
            )Net
      change in notes receivable from affiliates
            
            
            (158
            )
            
            
            (6
            )Proceeds
      from the sale of asset
            
            
            —
            
            
            
            35Other
            
            
            7
            
            
            
            3Net
      cash used in investing activities
            
            
            (354
            )
            
            
            (225
            )Net
      change in cash and cash equivalents
            
            
            —
            
            
            
            —Cash
      and cash equivalentsBeginning
      of period
            
            
            —
            
            
            
            —End
      of period
            
            $
            —
            
            
            $
            —





See
accompanying notes.





3


TENNESSEE
GAS PIPELINE COMPANY





NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)





1. Basis
of Presentation and Significant Accounting Policies





Basis of
Presentation





We are an
indirect wholly owned subsidiary of El Paso Corporation
(El Paso).  We prepared this Quarterly Report on Form 10-Q
under the rules and regulations of the United States Securities and
Exchange Commission (SEC). Because this is an interim period filing presented
using a condensed format, it does not include all of the disclosures required by
U.S. generally accepted accounting principles. You should read this Quarterly
Report on Form 10-Q along with our 2007 Annual Report on Form 10-K,
which includes a summary of our significant accounting policies and other
disclosures. The financial statements as of September 30, 2008, and for the
quarters and nine months ended September 30, 2008 and 2007, are unaudited. We
derived the condensed consolidated balance sheet as of
December 31, 2007, from the audited balance sheet filed in our 2007
Annual Report on Form 10-K. In our opinion, we have made all adjustments,
which are of a normal recurring nature, to fairly present our interim period
results. Due to the seasonal nature of our business, information for interim
periods may not be indicative of our operating results for the entire
year.





Significant
Accounting Policies





The
information below provides an update of our significant accounting policies and
accounting pronouncements issued but not yet adopted as discussed in our 2007
Annual Report on Form 10-K.




Fair Value
Measurements. On January 1, 2008, we adopted the provisions of Statement
of Financial Accounting Standards (SFAS) No. 157,Fair Value Measurements, for
our financial assets and liabilities. The adoption of the standard did not have
an impact on our financial statements. We elected to defer the adoption of SFAS
No. 157 for our non-financial assets and liabilities until January 1, 2009. We
do not anticipate the adoption of  the deferred provisions of this
standard to have a material impact on our financial statements.





Measurement Date of Postretirement
Benefits. Effective January 1, 2008, we adopted the measurement date
provisions of SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans — an Amendment of FASB Statements No. 87, 88, 106, and
132(R)and changed the measurement date of our postretirement benefit
plan from September 30 to December 31. The adoption of the measurement date
provisions of this standard did not have a material impact on our financial
statements.





2.
Property, Plant, and Equipment





Gain/Loss on Long-Lived Assets.During 2008, we recorded impairments of $24 million, including an
impairment related to our Essex-Middlesex Lateral project due to its prolonged
permitting process. In February 2007, we completed the sale of a pipeline
lateral for approximately $35 million and recorded a $7 million pretax gain on
the sale.





Asset Retirement Obligations.During the third quarter of 2008, we increased our asset retirement
liabilities by approximately $21 million resulting from the impacts of
Hurricanes Ike and Gustav on our facilities. Our asset retirement obligations
are included in other current liabilities on our balance sheets.





3.
Debt





In July
2008, we obtained the required consent necessary for certain amendments to the
indenture governing our 6% debenture due 2011. These amendments permit us to
convert from a corporation to a non-corporate legal entity such as a general
partnership, limited partnership or limited liability company.





4








4. Commitments
and Contingencies





Legal
Proceedings





Gas Measurement Cases. We and
a number of our affiliates were named defendants in actions that generally
allege mismeasurement of natural gas volumes and/or heating content resulting in
the underpayment of royalties. The first set of cases was filed in 1997 by an
individual under the False Claims Act and have been consolidated for pretrial
purposes (Inre: Natural Gas
Royalties Qui Tam Litigation,U.S. District Court for the District of
Wyoming). These complaints allege an industry-wide conspiracy to underreport the
heating value as well as the volumes of the natural gas produced from federal
and Native American lands.  In October 2006, a U.S. District
Judge issued an order dismissing all claims against all
defendants.  An appeal has been filed.





Similar
allegations were filed in a second set of actions initiated in 1999 inWill Price, et al. v. Gas Pipelines
and Their Predecessors, et al.,in the District Court of Stevens County,
Kansas. The plaintiffs currently seek certification of a class of royalty owners
in wells on non-federal and non-Native American lands in Kansas, Wyoming and
Colorado.  Motions for class certification have been briefed and
argued in the proceedings and the parties are awaiting the court’s ruling. The
plaintiff seeks an unspecified amount of monetary damages in the form of
additional royalty payments (along with interest, expenses and punitive damages)
and injunctive relief with regard to future gas measurement practices. Our costs
and legal exposure related to these lawsuits and claims are not currently
determinable.





In
addition to the above proceedings, we and our subsidiaries and affiliates are
named defendants in numerous lawsuits and governmental proceedings that arise in
the ordinary course of our business. For each of these matters, we evaluate the
merits of the case, our exposure to the matter, possible legal or settlement
strategies and the likelihood of an unfavorable outcome. If we determine that an
unfavorable outcome is probable and can be estimated, we establish the necessary
accruals. While the outcome of these matters, including those discussed above,
cannot be predicted with certainty, and there are still uncertainties related to
the costs we may incur, based upon our evaluation and experience to date, we had
no accruals for our outstanding legal matters at September 30, 2008. It is
possible, however, that new information or future developments could require us
to reassess our potential exposure related to these matters and establish
accruals accordingly.





Environmental
Matters





We are
subject to federal, state and local laws and regulations governing environmental
quality and pollution control. These laws and regulations require us to remove
or remedy the effect on the environment of the disposal or release of specified
substances at current and former operating sites. At September 30, 2008, we had
accrued approximately $8 million for expected remediation costs and associated
onsite, offsite and groundwater technical studies and for related environmental
legal costs.





Our
accrual represents a combination of two estimation methodologies. First, where
the most likely outcome can be reasonably estimated, that cost has been accrued.
Second, where the most likely outcome cannot be estimated, a range of costs is
established and if no one amount in that range is more likely than any other,
the lower end of the expected range has been accrued. Our environmental
remediation projects are in various stages of completion. Our recorded
liabilities reflect our current estimates of amounts we will expend to remediate
these sites. However, depending on the stage of completion or assessment, the
ultimate extent of contamination or remediation required may not be known. As
additional assessments occur or remediation efforts continue, we may incur
additional liabilities.





Below is
a reconciliation of our accrued liability from January 1, 2008 to September
30, 2008 (in millions):





Balance
      at January 1, 2008
            
            $
            10Adjustments
      for remediation activities
            
            
            (1
            )Payments
      for remediation activities
            
            
            (1
            )Balance
      at September 30, 2008
            
            $
            8





5


For the
remainder of 2008, we estimate that our total remediation expenditures will be
approximately $1 million, which will be expended under government directed
clean-up plans.





Polychlorinated Biphenyls (PCB) Cost
Recoveries.Pursuant to a consent order executed with the U.S.
Environmental Protection Agency (EPA) in May 1994, we have been conducting
remediation activities at certain of our compressor stations associated with the
presence of PCBs and other hazardous materials. In July 2008, we received
approval from the EPA on our final program report for the consent order.
Long-term monitoring and state required activities are continuing. We have
recovered a substantial portion of the environmental costs identified in our PCB
remediation project through a surcharge to our customers. A settlement with our
customers, approved by the Federal Energy Regulatory Commission (FERC) in
November 1995, established the surcharge mechanism. In May 2008, the FERC
accepted our filing to extend the surcharge collection period through June 2010.
As of September 30, 2008, we had pre-collected PCB costs of approximately $157
million, which includes interest. This pre-collected amount will be reduced by
future eligible costs incurred for the remainder of the remediation project. To
the extent actual eligible expenditures are less than the amounts pre-collected,
we will refund to our customers the difference, plus carrying charges incurred
up to the date of the refunds. At September 30, 2008, our regulatory liability
for estimated future refund obligations to our customers was approximately $153
million.  In compliance with the FERC’s order on our May 2008 filing,
we have been engaged in discussions with our customers to ascertain the
feasibility of amending the settlement to provide for an earlier refund of
amounts collected in excess of estimated future eligible costs than would
otherwise be required by the settlement while safeguarding our ability to
recover costs of future remediation activities. The amount and timing of any
refund is subject to further agreement between our customers and us, and to
date, no consensus has been reached by the parties.





Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) Matters. We have received
notice that we could be designated, or have been asked for information to
determine whether we could be designated, as a Potentially Responsible Party
(PRP) with respect to four active sites under the CERCLA or state
equivalents.  We have sought to resolve our liability as a PRP at
these sites through indemnification by third parties and settlements which
provide for payment of our allocable share of remediation costs.  As
of September 30, 2008, we have estimated our share of the remediation costs at
these sites to be between $1 million and $2 million. Because the clean-up
costs are estimates and are subject to revision as more information becomes
available about the extent of remediation required, and in some cases we have
asserted a defense to any liability, our estimates could change. Moreover,
liability under the federal CERCLA statute is joint and several, meaning that we
could be required to pay in excess of our pro rata share of remediation costs.
Our understanding of the financial strength of other PRPs has been considered,
where appropriate, in estimating our liabilities. Accruals for these matters are
included in the environmental reserves discussed above.





It is
possible that new information or future developments could require us to
reassess our potential exposure related to environmental matters. We may incur
significant costs and liabilities in order to comply with existing environmental
laws and regulations. It is also possible that other developments, such as
increasingly strict environmental laws, regulations and orders of regulatory
agencies, as well as claims for damages to property and the environment or
injuries to employees and other persons resulting from our current or past
operations, could result in substantial costs and liabilities in the future. As
this information becomes available, or other relevant developments occur, we
will adjust our accrual amounts accordingly. While there are still uncertainties
related to the ultimate costs we may incur, based upon our evaluation and
experience to date, we believe our reserves are adequate.




6


Regulatory
Matters





Notice of Inquiry on Pipeline Fuel
Retention Policies.In September 2007, the FERC issued a Notice of
Inquiry regarding its policy about the in-kind recovery of fuel and lost and
unaccounted for gas by natural gas pipeline companies. Under current policy,
pipeline companies have options for recovering these costs. For some companies,
the tariff states the recovery of a fixed percentage as a non-negotiable
fee-in-kind retained from the volumes tendered for shipment by each shipper.
There is also a tracker approach, where the pipeline company’s tariff provides
for prospective adjustments to the fuel retention rates from time-to-time, but
does not include a mechanism to allow the company to reconcile past over or
under-recoveries of fuel. Finally, some pipeline companies’ tariffs provide for
a tracker with a true-up approach, where provisions in the companies’ tariff
allow for periodic adjustments to the fuel retention rates, and also provide for
a true-up of past over and under-recoveries of fuel and lost and unaccounted for
gas. In this proceeding, the FERC is seeking comments on whether it should
change its current policy and prescribe a uniform method for all pipeline
companies to use in recovering these costs. Our tariff currently provides for a
fixed percentage recovery of fuel and lost and unaccounted for gas. At this
time, we do not know what impact, if any, this proceeding may ultimately have on
us.





Notice of Proposed
Rulemaking. In October 2007, the Minerals Management Service (MMS) issued
a Notice of Proposed Rulemaking for Oil and Gas and Sulphur Operations in the
Outer Continental Shelf (OCS) — Pipelines and Pipeline Rights-of-Way. If
adopted, the proposed rules would substantially revise MMS OCS pipeline and
rights-of-way regulations. The proposed rules would have the effect of: (1)
increasing the financial obligations of entities, like us, which have pipelines
and pipeline rights-of-way in the OCS; (2) increasing the regulatory
requirements imposed on the operation and maintenance of existing pipelines and
rights of way in the OCS; and (3) increasing the requirements and preconditions
for obtaining new rights-of-way in the OCS.





Greenhouse Gas
Emissions.  Currently, various legislative and regulatory
measures to address greenhouse gas (GHG) emissions are in various phases of
discussion or implementation. Various federal legislative proposals have been
made over the last several years.  The EPA is considering a rulemaking
regarding potential regulation of GHG emissions from stationary and mobile
sources under the Clean Air Act.  Legislation and regulation are also
in various stages of proposal, enactment, and implementation in many of the
states throughout the United States.  If enacted as proposed, the
federal and state legislative and regulatory proposals would impact our
operations and financial results.  However, until enacted, it is not
possible to determine the exact impact that these future measures might have on
our operations and financial results.  Additionally, various
governmental entities and environmental groups have filed lawsuits seeking to
force the federal government to regulate GHG emissions and individual companies
to reduce GHG emissions from their operations.  These and other
lawsuits may result in decisions by state courts, federal agencies, and other
governing bodies that could impact our operations and ability to obtain
certifications and permits to construct future projects.





Purchase
Obligation





We have
entered into contracts to purchase approximately $90 million of pipe for our 300
Line expansion project.





5. Investment
in Unconsolidated Affiliate and Transactions with Affiliates





Investment
in Unconsolidated Affiliate





We have a
50 percent ownership interest in Bear Creek Storage Company and received $13
million and  $27 million in dividends for the nine months ended September
30, 2008 and 2007. Summarized income statement information of our proportionate
share of the income of this investment for the periods ended September 30 is as
follows:





Quarter
      Ended
            
            
            Nine
      Months EndedSeptember 30,
            
            
            September 30,2008
            
            2007
            
            
            2008
            
            
            2007(In
      millions)Operating
      results data:Operating
      revenues
            
            $
            4
            
            
            $
            5
            
            
            $
            15
            
            
            $
            15Operating
      expenses
            
            
            2
            
            
            
            1
            
            
            
            6
            
            
            
            5Income
      from continuing operations and net income
            
            
            2
            
            
            
            3
            
            
            
            10
            
            
            
            11




7




Transactions
with Affiliates





Cash Management Program and Other
Notes Receivable.We participate in El Paso’s cash management program
which matches short-term cash surpluses and needs of participating affiliates,
thus minimizing total borrowings from outside sources. El Paso uses the cash
management program to settle intercompany transactions between participating
affiliates. We have historically advanced cash to El Paso in exchange for an
affiliated note receivable that is due upon demand. At September 30, 2008 and
December 31, 2007, we had notes receivable from El Paso and other affiliates of
$858 million and $582 million. We classified $102 million of these receivables
as current on our balance sheet at September 30, 2008, based on the net amount
we anticipate using in the next twelve months considering available cash sources
and needs.  In January 2008, El Paso repaid a separate variable
interest rate note receivable of $118 million. The interest rate on these notes
at September 30, 2008 and December 31, 2007 was 3.7% and 6.5%.





At
September 30, 2008 and December 31, 2007, we also had non-interest bearing notes
receivable of $334 million from an El Paso affiliate. We do not intend to
settle any of these notes within twelve months and have therefore classified
them a non-current on our balance sheets.





Income Taxes.El Paso files
consolidated U.S. federal and certain state tax returns which include our
taxable income. In certain states, we file and pay taxes directly to the state
taxing authorities. At September 30, 2008 and December 31, 2007, we had
federal and state income taxes payable of $54 million and $13 million. The
majority of these balances, as well as deferred income taxes and amounts
associated with the resolution of unrecognized tax benefits, will become payable
to El Paso. During 2007, we settled $77 million with El Paso through its cash
management program for certain tax attributes previously reflected as deferred
income taxes in our financial statements. These settlements were reflected as
operating activities in our statement of cash flows.





Accounts Receivable Sales Program.We sell certain accounts receivable to a qualifying special purpose
entity (QSPE) and reflect our subordinated interest in these receivables as
accounts receivable — affiliate on our balance sheets. We earn a fee for
servicing the receivables and performing all administrative duties for the QSPE.
At September 30, 2008 and December 31, 2007, our subordinated beneficial
interest in the receivables sold was $27 million and $61 million. The fair
value of the fees earned was immaterial to our financial statements for the
quarters and nine months ended September 30, 2008 and 2007.





Other Affiliate Balances. At
September 30, 2008 and December 31, 2007, we had contractual deposits from our
affiliates of $9 million and $8 million.




Affiliate Revenues and
Expenses. We enter into transactions with our affiliates within the
ordinary course of business. For a further discussion of our affiliated
transactions, see our 2007 Annual Report on Form 10-K. The following table shows
revenues and charges from our affiliates for the periods ended September
30:





Quarter
      Ended
              
              
              Nine
      Months EndedSeptember 30,
              
              
              September 30,2008
              
              
              2007
              
              
              2008
              
              
              2007(In
      millions)Revenues
      from affiliates
              
              $
              5
              
              
              $
              6
              
              
              $
              15
              
              
              $
              16Operation
      and maintenance expenses from affiliates
              
              
              16
              
              
              
              16
              
              
              
              47
              
              
              
              45Reimbursements
      of operating expenses charged to affiliates
              
              
              12
              
              
              
              11
              
              
              
              35
              
              
              
              34





8


Item 2. Management’s Discussion and Analysis of
Financial Condition
and Results of
Operations





The
information required by this Item is presented in a reduced disclosure format
pursuant to General Instruction H to Form 10-Q.  In
addition, this Item updates, and should be read in conjunction with the
information disclosed in our 2007 Annual Report on Form 10-K, and our
condensed consolidated financial statements and the accompanying footnotes
presented in Item 1 of this Quarterly Report on
Form 10-Q.





Results
of Operations





Our
management uses earnings before interest expense and income taxes (EBIT) as a
measure to assess the operating results and effectiveness of our business, which
consists of consolidated operations as well as an investment in an
unconsolidated affiliate. We believe EBIT is useful to investors because it
allows them to evaluate more effectively our operating performance using the
same performance measure analyzed internally by our management. We define EBIT
as net income adjusted for (i) items that do not impact our income from
continuing operations, (ii) income taxes, (iii) interest and debt expense and
(iv) affiliated interest income. We exclude interest and debt expense from this
measure so that investors may evaluate our operating results without regard to
our financing methods. EBIT may not be comparable to measurements used by other
companies. Additionally, EBIT should be considered in conjunction with net
income and other performance measures such as operating income and operating
cash flows.  Below is a reconciliation of our EBIT to net income, our
throughput volumes and an analysis and discussion of our results for the nine
months ended September 30, 2008 compared to the same period in
2007.





Operating
Results:


2008
              
              
              2007(In
      millions,
                except
      for volumes)Operating
      revenues
              
              $
              671
              
              
              $
              639Operating
      expenses
              
              
              (478
              )
              
              
              (406
              )Operating
      income
              
              
              193
              
              
              
              233Earnings
      from unconsolidated affiliate
              
              
              10
              
              
              
              11Other
      income, net
              
              
              8
              
              
              
              15EBIT
              
              
              211
              
              
              
              259Interest
      and debt expense
              
              
              (101
              )
              
              
              (97
              )Affiliated
      interest income, net
              
              
              24
              
              
              
              34Income
      taxes
              
              
              (53
              )
              
              
              (76
              )Net
      income
              
              $
              81
              
              
              $
              120Throughput
      volumes (BBtu/d)
              
              
              4,875
              
              
              
              4,766







EBIT
Analysis:


Revenue
            
            
            Expense
            
            
            Other
            
            
            EBIT
              ImpactFavorable/(Unfavorable)(In
      millions)Expansions
            
            $
            24
            
            
            $
            (8
            )
            
            $
            (3
            )
            
            $
            13Gas
      not used in operations and other natural gas sales
            
            
            26
            
            
            
            —
            
            
            
            —
            
            
            
            26Services
      revenues
            
            
            3
            
            
            
            —
            
            
            
            —
            
            
            
            3Hurricanes
            
            
            (7
            )
            
            
            (5
            )
            
            
            —
            
            
            
            (12
            )Contract
      settlement
            
            
            (10
            )
            
            
            —
            
            
            
            —
            
            
            
            (10
            )Gain/loss
      on long-lived assets
            
            
            —
            
            
            
            (31
            )
            
            
            —
            
            
            
            (31
            )Other
      operating and general and administrative costs
            
            
            —
            
            
            
            (28
            )
            
            
            —
            
            
            
            (28
            )Other(1)
            
            
            (4
            )
            
            
            —
            
            
            
            (5
            )
            
            
            (9
            )Total
      impact on EBIT
            
            $
            32
            
            
            $
            (72
            )
            
            $
            (8
            )
            
            $
            (48
            )


_______________


(1)
      Consists of a favorable property tax settlement during the third quarter
      of 2008 and other individually insignificant
  items.





Expansions.During 2007, the
Northeast ConneXion–New England expansion and the Louisiana Deepwater Link
projects were placed into service. This increase in revenues was partially
offset by depreciation and operating and maintenance expenses of the new
facilities.







9




In July
2008, we completed the acquisition of certain offshore assets from a third
party. Our total cost to acquire these assets and to reconfigure the system
(referred to as the Blue Water project) is approximately $25 million. The
estimated in-service date of this project is December 2008. In August 2008, we
announced our 300 Line expansion project which is designed to transport 300,000
Dth/day of production located in northeast Kentucky to key pipeline
interconnects in northern New Jersey and New York. The estimated total capital
cost for this expansion project is approximately $750 million with anticipated
in-service dates in the fourth quarter of 2010 for Phase I and in the fourth
quarter of 2011 for Phase II. In addition, we have entered into contracts to
purchase approximately $90 million of pipe for this expansion which is expected
to be paid in 2009.





We have
several other expansion projects in various stages of development. For a further
discussion of these projects, see our 2007 Annual Report on Form
10-K.





Gas
Not Used in Operations and Other Natural Gas Sales. Gas not used for
operations results in revenues to us, which we recognize when the volumes are
retained. During the ninemonths endedSeptember30, 2008, our EBIT
was favorably impacted by higher volumes of gas not used in our operations
compared to the same period in 2007. For a further discussion of gas not used in
operations and other natural gas sales, see our 2007 Annual Report on Form
10-K.





Services
Revenues.During the nine months ended September 30, 2008, we
sold additional capacity in the northern and southern regions of our system
compared to the same period in 2007. This increase in revenue was partially
offset by lower surcharges from certain firm customers in 2008.





Hurricanes.During
the third quarter of 2008, we incurred damage to sections of our Gulf Coast
and offshore pipeline facilities due to Hurricanes Ike and Gustav.  Our
EBIT was unfavorably impacted by these hurricanes due to gas loss from various
damaged pipelines, lower volume of gas not used in operations, lower usage
revenue, and repair costs that will not be recovered from
insurance.  See Liquidity and Capital Resources for a further
discussion of the hurricanes.





Contract
Settlement.In the second quarter of 2007, we received $10
million to settle our bankruptcy claim against USGen New England,
Inc.





Gain/Loss on Long-lived
Assets. During 2008, we recorded impairments of $24 million, including an
impairment related to our Essex-Middlesex Lateral project due to its prolonged
permitting process. In February 2007, we recorded a $7 million pretax gain on
the sale of a pipeline lateral.





Other
Operating and General and Administrative Costs.During thenine
months ended September 30, 2008,our operating and
general and administrative expenses were higher than the same period in 2007
primarily due to increased labor costs to support growth and customer activities
and additional maintenance work required on our pipeline system.





Affiliated
Interest Income, Net





Affiliated
interest income, net for the nine months ended September 30, 2008, was $10
million lower than the same period in 2007 due to lower average short-term
interest rates, partially offset by higher average advances to El Paso
under the cash management program. The average short-term interest rate for the
nine months decreased from 6.1% in 2007 to 4.5% for the same period in 2008. The
average advances due from El Paso increased from $749 million for the nine
months of 2007 to $751 million for the same period in 2008.





Income
Taxes





Our
effective tax rates of 40 percent and 39 percent for the nine months ended
September 30, 2008 and 2007 were higher than the statutory rate of 35 percent
due to the effect of state income taxes.





10


Liquidity
and Capital Expenditures





Liquidity Overview. Our
primary sources of liquidity are cash flows from operating activities and El
Paso’s cash management program. Our primary uses of cash are for working capital
and capital expenditures. We have historically advanced cash to El Paso, which
we reflect in investing activities in our statement of cash flows.
At  September 30, 2008, we had notes receivable from El Paso and other
affiliates of approximately $1.2 billion of which approximately $102 million was
classified as current based on the net amount we anticipate using in the next
twelve months considering available cash sources and needs. See Item 1,
Financial Statements, Note 5, for a further discussion of El Paso’s cash
management program and our other affiliate notes receivable. We believe that
cash flows from operating activities combined with amounts available to us under
El Paso’s cash management program will be adequate to meet our capital
requirements and our existing operating needs, including any refunds to our
customers associated with the PCB remediation project.





In
addition to the cash management program, we are eligible to borrow amounts
available under El Paso’s $1.5 billion credit agreement and are only liable
for amounts we directly borrow. As of September 30, 2008, El Paso had
approximately $0.6 billion of capacity remaining under this credit agreement,
none of which was used by us. For a further discussion of this credit agreement,
see our 2007 Annual Report on Form 10-K.





Current
global financial markets are extremely volatile.  The U.S. and foreign
governments have recently enacted emergency financial packages that are designed
to restore confidence and liquidity in the global credit markets.  However,
it is uncertain whether such measures will be successful and, if successful,
when the positive effects will be achieved in the financial markets. 
Although we do not anticipate having a need to directly access the financial
markets in 2009 for any of our operating activities or expansion capital needs,
we do rely upon amounts available to us under El Paso’s cash management program
to meet our capital requirements and operating needs.  As of September 30,
2008, El Paso had approximately $1.2 billion of cash and approximately $0.7
billion of capacity available to it under various committed credit
facilities.  Additionally, in response to the volatility in the financial
markets, El Paso has also announced certain actions that are designed to reduce
its need to access such financial markets, including reductions in the capital
programs of certain of its operating subsidiaries and the sale of several
non-core assets.




In
addition to the liquidity sources and actions discussed above, we also have the
ability to pursue financial market transactions to supplement our operating cash
flows to fund our capital expenditure programs, meet operating needs and repay
debt maturities.  However, there is a risk that the financial markets could
remain volatile and we or El Paso are not able to access these markets, which
could impact our liquidity in the future. For a more detailed discussion of our
operations and risk factors related to our relationship with El Paso, refer to
our 2007 Annual Report on Form 10-K.





Debt. In July 2008, we
obtained the required consent necessary for certain amendments to the indenture
governing our 6% debenture due 2011. These amendments permit us to convert from
a corporation to a  non-corporate legal entity such as a general
partnership, limited partnership or limited liability company.





11


Capital
Expenditures.  Our cash capital expenditures for the nine
months ended September 30, 2008, and our estimates of capital expenditures for
the remainder of this year to expand and maintain our system are listed below.
We expect to fund these capital expenditures through internally generated
funds.





Nine
      Months Ended
            
            
            2008September
      30, 2008
            
            
            Remaining
            
            
            Total(In
      millions)Maintenance
            
            $
            133
            
            
            $
            88
            
            
            $
            221Expansion
            
            
            55
            
            
            
            48
            
            
            
            103Other
      (1)
            
            
            15
            
            
            
            29
            
            
            
            44$
            203
            
            
            $
            165
            
            
            $
            368


_______________


(1) Relates
      to building renovations at  our corporate
      facilities.





Hurricanes.During the third
quarter of 2008, our pipeline and certain of our facilities were damaged by
Hurricanes Ike and Gustav.  We continue to assess the damages
resulting from these hurricanes and the corresponding impact on estimated costs
to repair and abandon impacted facilities. Although our estimates may change in
the future, we currently estimate total repair and abandonment
costs between approximately $80 million and $120 million, a majority
of which we expect will be capital expenditures.  We expect to
spend these amounts in 2008 and 2009, none of which are recoverable from
insurance.





Commitments
and Contingencies





See
Item 1, Financial Statements, Note 4, which is incorporated herein by
reference.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





Omitted
from this report pursuant to the reduced disclosure format permitted by General
Instruction H to Form 10-Q.





Item  4T. Controls
and Procedures





Evaluation
of Disclosure Controls and Procedures





As of
September 30, 2008, we carried out an evaluation under the supervision and with
the participation of our management, including our President and our Chief
Financial Officer, as to the effectiveness, design and operation of our
disclosure controls and procedures, as defined by the Securities Exchange Act of
1934, as amended. This evaluation considered the various processes carried out
under the direction of our disclosure committee in an effort to ensure that
information required to be disclosed in the SEC reports we file or submit under
the Exchange Act is accurate, complete and timely. Our management, including our
President and our Chief Financial Officer, does not expect that our disclosure
controls and procedures or our internal controls will prevent and/or detect all
errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within a company have been detected. Based on the results of our
evaluation, our President and our Chief Financial Officer concluded that our
disclosure controls and procedures are effective at a reasonable level of
assurance at September 30, 2008.





Changes
in Internal Control Over Financial Reporting





There
were no changes in our internal control over financial reporting that have
materially affected or are reasonably likely to materially affect our internal
control over financial reporting during the third quarter
of 2008.


12


PART
II — OTHER INFORMATION





Item 1. Legal
Proceedings





See Part
I, Item 1, Financial Statements, Note 4, which is incorporated herein
by reference.





Item 1A. Risk
Factors





CAUTIONARY
STATEMENTS FOR PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF


THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995





This
report contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based on assumptions or beliefs that we believe to be reasonable; however,
assumed facts almost always vary from actual results, and differences between
assumed facts and actual results can be material, depending upon the
circumstances. Where, based on assumptions, we or our management express an
expectation or belief as to future results, that expectation or belief is
expressed in good faith and is believed to have a reasonable basis. We cannot
assure you, however, that the stated expectation or belief will occur, be
achieved or accomplished. The words “believe,” “expect,” “estimate,”
“anticipate,” and similar expressions will generally identify forward-looking
statements. All of our forward-looking statements, whether written or oral, are
expressly qualified by these cautionary statements and any other cautionary
statements that may accompany such forward-looking statements. In addition, we
disclaim any obligation to update any forward-looking statements to reflect
events or circumstances after the date of this report.





Important
factors, such as limited access to the capital markets, could cause actual
results to differ materially from estimates or projections contained in
forward-looking statements are described in our 2007 Annual Report on
Form 10-K under Part I, item 1A, Risk Factors. There have been no material
changes in these risk factors since that report, except as discussed in
Liquidity and Capital Expenditures in Part I, Item 2, Management’s Discussion
and Analysis of Financial Condition and Results of Operations.





Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds





Omitted
from this report pursuant to the reduced disclosure format permitted by General
Instruction H to Form 10-Q.





Item 3. Defaults
Upon Senior Securities





Omitted
from this report pursuant to the reduced disclosure format permitted by General
Instruction H to Form 10-Q.





Item 4. Submission
of Matters to a Vote of Security Holders





Omitted
from this report pursuant to the reduced disclosure format permitted by General
Instruction H to Form 10-Q.





Item 5. Other
Information





None.





Item 6. Exhibits





The
Exhibit Index is hereby incorporated herein by reference and sets forth a
list of those exhibits filed herewith.





13


SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, Tennessee Gas
Pipeline Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




TENNESSEE GAS PIPELINE
      COMPANYDate: 
      November 7, 2008
              By:
              /s/ James
      C. YardleyJames
      C. YardleyChairman of the Board and
      President(Principal
      Executive Officer)Date: 
      November 7, 2008
              By:
              /s/
      John R. SultJohn
      R. SultSenior Vice
      PresidentChief
      Financial Officer and Controller(Principal
      Accounting and Financial Officer)


,





14


TENNESSEE
GAS PIPELINE COMPANY





EXHIBIT
INDEX





Each
exhibit identified below is a part of this report.   Exhibits
filed this report are designated by “*”.  All other exhibits not so
designated are incorporated herein by reference to a prior filing as
indicated.





Exhibit
              Number
            
            Description4.A
            
            Third
      Supplemental Indenture dated July 23, 2008 by and between Tennessee Gas
      Pipeline Company and Wilmington TrustCompany,
      as trustee, to Indenture dated as of December 15, 1981 (incorporated by
      reference to Exhibit 4.A to our Current Report on Form 8-K filed with the
      SEC on July 29, 2008).*10.A
            
            Amendment
      No. 3, dated as of August 27, 2008, to the Receivables Purchase
      Agreement dated as of August 31, 2006 among TGPfunding
      Company, L.L.C., Tennessee Gas Pipeline Company, as initial Servicer,
      Starbird Funding Corporation and the other fundingentities
      from time to time party hereto as Investors, BNP Paribas, New York Branch,
      and the other financial institutions from time totime
      party hereto as Managing Agents, and BNP Paribas, New York Branch, as
      Program Agent.*31.A
            
            Certification
      of Principal Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.*31.B
            
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*32.A
            
            Certification
      of Principal Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.*32.B
            
            Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.