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

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                                    FORM 10-Q
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|X|   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934
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      For the quarterly period ended September 30, 1998
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                                       OR
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|_|   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934
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      For the transition period from                to

      COMMISSION FILE NUMBER  0-10007


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                              COLONIAL GAS COMPANY
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            (Exact name of registrant as specified in its charter)
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                Massachusetts                                04-1558100
           (State or other jurisdiction of               (I.R.S. Employer
           incorporation or organization)             Identification Number)

     40 Market Street, Lowell, Massachusetts                   01852
     (Address of principal executive offices)               (Zip Code)

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Registrant's telephone number, including area code:  (978) 322-3000


Former  name,  former  address and former  fiscal year,  if changed  since last
   report:  Not applicable

      Indicate by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                     Yes  |X|  No   |_|


      The number of shares of the  registrant's  common stock,  $3.33 par value,
outstanding as of November 1, 1998 was 8,853,349.





<PAGE>


                              COLONIAL GAS COMPANY

                                      INDEX


                                                    

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

   Consolidated Condensed Statements of Income -
        Three Months Ended September 30, 1998 and 1997  
        Nine Months Ended September 30, 1998 and 1997   

   Consolidated Condensed Balance Sheets - 
        September 30, 1998, December 31, 1997
        and September 30, 1997

   Consolidated Condensed Statements of Cash Flows -
        Nine Months Ended September 30, 1998 and 1997   

   Notes to Consolidated Condensed Financial Statements

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


PART II - OTHER INFORMATION

Item 5. Other Information                              

Item 6. Exhibits and Reports on Form 8-K               



<PAGE>

                     PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                      COLONIAL GAS COMPANY AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                           Three Months Ended
                                              September 30,
                                                1998 1997
                                          (In Thousands Except
                                           Per Share Amounts)

Operating Revenues                       $ 12,347     $ 14,877
   Cost of gas sold                         6,197        8,587
                                         -----------  -----------
        Operating Margin                    6,150        6,290
                                         -----------  -----------

Operating Expenses:
   Operations                               6,717        7,055
   Maintenance                              1,187        1,078
   Depreciation and Amortization            3,524        2,976
   Taxes, other than income                 1,218        1,253
                                         -----------  -----------
        Total Operating Expenses           12,646       12,362
                                         -----------  -----------

Income Taxes (Credit)                      (3,250)      (3,029)
                                         -----------  -----------

Utility Operating Loss                     (3,246)      (3,043)
Other Operating Income (Loss):
   Energy Trucking revenues                   373        2,470
   Energy Trucking expenses, including
         income taxes and interest            414        2,018

                                         -----------  -----------
        Energy Trucking Net Income (Loss)     (41)         452

   Other, net of income taxes                  66           66
                                         -----------  -----------
Total Other Operating Loss                     25          518

Non-Operating Income, Net                     204           52
                                         -----------  -----------

Income (Loss) Before Interest and Debt     (3,017)      (2,473)
    Expense
Interest and Debt Expense                   2,196        2,093
                                         -----------  -----------

Net Loss                                 $ (5,213)    $ (4,566)
                                         ===========  ===========

Average Common Shares Outstanding           8,806        8,620
                                         ===========  ===========
                                         ===========  ===========

Loss per Average Common Share            $  (0.59)    $  (0.53)
                                         ===========  ===========
                                         ===========  ===========

Dividends Paid per Common Share           $  .345      $  .335
                                         ===========  ===========
    (See accompanying notes to consolidated condensed financial statements)



<PAGE>

                      COLONIAL GAS COMPANY AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                   (UNAUDITED)

                                            Nine Months Ended
                                              September 30,
                                                1998 1997
                                          (In Thousands Except
                                           Per Share Amounts)

Operating Revenues                     $115,854       $124,866
   Cost of gas sold                      60,777         68,621
                                        ----------  -------------
        Operating Margin                 55,077         56,245
                                        ----------  -------------
Operating Expenses:
   Operations                            20,326         21,608
   Maintenance                            3,390          3,338
   Depreciation and Amortization          9,937          8,921
   Taxes, other than income               3,966          4,029
                                        ----------  -------------
        Total Operating Expenses         37,619         37,896
                                        ----------  -------------

Income Taxes                              4,374          4,974
                                        ----------  -------------

Utility Operating Income                 13,084         13,375
Other Operating Income:
   Energy Trucking revenues               1,395          4,260
   Energy Trucking expenses, including
        income taxes and interest         1,600          3,949
        
                                        ----------  -------------
        Energy Trucking Net Income         (205)           311
          (Loss)
        Other, net of income taxes          224            172
                                        ----------  -------------
Total Other Operating Income                 19            483
Non-Operating Income, Net                   640            299
                                        ----------  -------------
Income Before Interest and Debt Expense  13,743         14,157
Interest and Debt Expense                 6,517          5,931
                                        ----------  -------------

Net Income                              $ 7,226      $   8,226

                                        ==========  =============
                                        ==========  =============

Average Common Shares Outstanding         8,750          8,576
                                        ==========  =============
                                        ==========  =============

Income per Average Common Share         $  0.83       $   0.96
                                        ==========  =============
                                        ==========  =============

Dividends Paid per Common Share         $ 1.025      $   1.005

                                        ==========  =============



    (See accompanying notes to consolidated condensed financial statements)


<PAGE>


                      COLONIAL GAS COMPANY AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                     ASSETS
                                   September     December      September
                                      30,           31,           30,
                                     1998          1997          1997
                                  ------------  ------------  ------------
                                  (Unaudited)                 (Unaudited)
                                               (In Thousands)


Utility Property:
At original cost                   $387,950      $362,742      $356,141
   Accumulated depreciation         (98,443)      (88,210)      (91,233)
                                  ------------  ------------  ------------
        Net utility property        289,507       274,532       264,908

Non-Utility Property - Net            7,293         7,312         6,701
                                  ------------  ------------  ------------

        Net property                296,800       281,844       271,609
                                  ------------  ------------  ------------

Capital Leases - Net                  1,680         2,630         2,392
                                  ------------  ------------  ------------

Current Assets:
   Cash and cash equivalents          1,139           259         1,563
   Accounts receivable - net          4,728        18,585         4,599
   Accrued utility revenues             710         7,417           723
   Unbilled gas costs                14,582        19,266        13,694
   Fuel and other inventories        15,990        12,959        14,495
   Prepayments and other current     12,214         9,481         9,487
      assets
                                  ------------  ------------  ------------

        Total current assets         49,363        67,967        44,561
                                  ------------  ------------  ------------

Deferred Charges and Other
Assets:
   Unrecovered deferred income        8,432         9,014         9,192
       taxes
   Unrecovered environmental
       expenses -  incurred           3,622         3,833         3,641
   Unrecovered environmental
       expenses - accrued               307           707           656
   Unrecovered transition costs       2,800         2,800         4,500
       - accrued
   Other                             20,482        20,196        19,871
                                  ------------  ------------  ------------
        Total deferred charges
           and other assets          35,643        36,550        37,860
                                  ============  ============  ============

Total Assets                       $383,486      $388,991      $356,422
                                  ============  ============  ============

    (See accompanying notes to consolidated condensed financial statements)

<PAGE>


                      COLONIAL GAS COMPANY AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                         LIABILITIES AND CAPITALIZATION

                                    September    December      September
                                       30,          31,           30,
                                      1998         1997          1997
                                   ------------ ------------  ------------
                                   (Unaudited)                (Unaudited)
                                               (In Thousands)

Capitalization:
   Common equity:
        Common Stock - part value $ 3.33 
           per share Authorized - 
           15,000 shares
           Issued and outstanding - 
           8,845, 8,688, 8,647       $29,455      $28,931       $28,794
        Premium on common stock       61,162       57,277        56,517
        Retained earnings             34,178       35,924        31,011
                                   ------------ ------------  ------------
           Total Common equity       124,795      122,132       116,322
   Long-term debt                    110,000      100,102       100,144
                                   ------------ ------------  ------------

           Total capitalization      234,795      222,234       216,466
                                   ------------ ------------  ------------

Capital Lease Obligations              1,041        1,617         1,471
                                   ------------ ------------  ------------

Current Liabilities:
   Current maturities of 
       long-term debt                    144       10,164        10,161
   Current capital lease                 639        1,013           921
       obligations              
     Notes payable                    51,300       49,400        34,600
   Gas inventory purchase             11,860       14,895         9,934
       obligations                    
   Accounts payable                    8,522       15,674         9,390
   Other                              11,293       11,362        11,767 

           Total current              83,758      102,508        76,773
              liabilities
                                   ------------ ------------  ------------

Deferred Credits and Reserves:
   Deferred income taxes-funded       44,339       41,443        39,126
   Deferred income taxes-unfunded      8,432        9,014         9,192
   Accrued environmental expenses        307          707           656
   Accrued transition costs            2,800        2,800         4,500
   Other                               8,014        8,668         8,238
                                   ------------  ------------  ------------


      Total deferred credits and      63,892       62,632        61,712
         reserves
                                   ============ ============  ============

Total Capitalization and            $383,486     $388,991      $356,422
Liabilities
                                   ============ ============  ============

    (See accompanying notes to consolidated condensed financial statements)


<PAGE>


                      COLONIAL GAS COMPANY AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

                                            Nine Months Ended
                                              September 30,
                                                1998 1997
                                             (In Thousands)


Cash Flows From Operating Activities:
   Net income                                            $  7,226      $  8,226
   Adjustments to reconcile net income to                  15,291        14,158
       net cash        
   Changes in current assets and liabilities               10,321        16,283

                                                         --------      --------

        Net cash provided by operating                     32,838        38,667
             activities
                                                         --------      --------

Cash Flows From Investing Activities:
   Capital expenditures                                   (24,977)      (23,084)
   Non-utility capital expenditures                          (369)       (1,142)
   Change in deferred accounts                                447        (1,460)
                                                         --------      --------

        Net cash used in investing                        (24,899)      (25,686)
            activities
                                                         --------      --------

Cash Flows From Financing Activities:
   Dividends paid on Common Stock                          (8,973)       (8,535)
   Issuance of Common Stock                                 4,409         2,724
   Issuance of long-term debt, net of issuance cost        29,166        14,870
   Retirement of long-term debt, including premiums       (30,526)       (5,113)
   Change in notes payable                                  1,900       (15,800)
   Change in gas inventory purchase                        (3,035)       (3,105)
     obligations
                                                         --------      --------
        Net cash used in financing                         (7,059)      (14,959)
           activities
                                                         --------      --------

Net increase (decrease) in cash and cash                      880        (1,978)
    equivalents           
Cash and cash equivalents at beginning of                     259         3,541
    period
                                                         --------      --------

Cash and cash equivalents at end of period               $  1,139         1,563

                                                         ========      ========

Supplemental Disclosures of Cash Flow
Information:
   Cash paid during the period for:                      
        Interest - net of amount capitalized             $  8,154      $  7,480
                                                         ========      ========
                                                         ========      ========

        Income and franchise taxes                       $  3,555      $  6,109

                                                         ========      ========
    (See accompanying notes to consolidated condensed financial statements)


<PAGE>


                      COLONIAL GAS COMPANY AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)


1. In the  opinion  of the  Company,  the  accompanying  unaudited  consolidated
   condensed  financial  statements contain all adjustments  (consisting of only
   normal recurring accruals) necessary to present fairly the financial position
   as of September 30, 1998 and 1997 and results of operations for the three and
   nine month periods  ended  September 30, 1998 and 1997 and cash flows for the
   nine month period ended September 30, 1998 and 1997.

2. Due to the  significant  impact  of gas used for  space  heating  during  the
   heating season  (November-April)  and the Company's  seasonal rate structure,
   the results of operations  for the three month and nine month periods  ending
   September 30, 1998 and 1997 are not necessarily  indicative of the results to
   be expected for the full year.

3. During the nine months ended  September 30, 1998,  the Company issued 157,000
   shares of Common Stock,  $3.33 par value,  under a Dividend  Reinvestment and
   Common Stock  Purchase Plan and under an Employee  Savings Plan. As a result,
   Common Stock, $3.33 par value, increased $524,000 and Premium on Common Stock
   increased $3,885,000.

4. Contingencies

   Reference  is made to  Note  I/Contingencies  of the  Notes  to  Consolidated
   Financial  Statements  contained  within the Company's  1997 Annual Report to
   Stockholders.

5. Reclassifications  are  made  periodically  to  previously  issued  financial
   statements to conform to the current year presentation.

6. On October 17, 1998,  the Company and Eastern  Enterprises,  a  Massachusetts
   business   trust   ("Eastern"),   entered  into  an  Agreement  and  Plan  of
   Reorganization  which  provides for the merger of the Company with and into a
   subsidiary  of  Eastern,  as a result of which  the  Company  would  become a
   wholly-owned  subsidiary of Eastern.  Eastern's other subsidiaries  presently
   include two other Massachusetts  natural gas distribution  companies,  Boston
   Gas  Company  and  Essex  County  Gas  Company.  Under  the  Agreement,   the
   outstanding  shares of the Company's common stock will convert into the right
   to  receive  cash and  Eastern  common  stock as set forth in the  Agreement.
   Completion of the merger is subject to approval of the Company's stockholders
   and,  if  required,   Eastern's  shareholders  and  receipt  of  satisfactory
   regulatory approvals,  including approval of the Massachusetts  Department of
   Telecommunications  and Energy and the Securities and Exchange Commission and
   antitrust clearance.




<PAGE>


7. Financial  results for the nine month  period ended  September  30, 1998 were
   affected by the implementation of an improved customer billing system in May,
   1998 that  enables the Company to bill  customers  using  pro-rated  seasonal
   rates.  As a result,  bills sent during May,  1998 for gas consumed in April,
   1998 reflected the Company's higher winter rates, increasing operating margin
   by $1,121,000 or $0.08 per share,  for the nine month period ended  September
   30, 1998. Because November,  1998 bills for October,  1998 usage will reflect
   the  Company's  lower summer  rates,  this billing  refinement  will have the
   opposite  impact in the fourth  quarter of 1998,  and therefore  have minimal
   effect on calendar year  earnings.  The  financial  results of the nine month
   period ended September 30, 1997 have not been restated.



<PAGE>


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

Results of Operations

                Three Months Ended September 30, 1998 and 1997

  The  Company's  net loss for the three  months  ended  September  30, 1998 was
$5,213,000,  or $.59 per share, which is $647,000, or 14%, more than the loss of
$4,566,000,  or $.53 per share,  reported  for the same  period  last year.  The
Company  typically  incurs  losses  for the  second  and  third  quarters  while
reporting   profits  for  the  first  and  fourth  quarters.   This  is  due  to
significantly  higher  natural gas sales  throughout  the colder  months to meet
customers'  heating  needs.  Approximately  90%  of  the  Company's  residential
customers are heating accounts.

  The Company's operating margin decreased $140,000,  or 2.2%, during the period
due to a 1.5% decrease in total gas sold and transported caused by weather which
was 25% warmer than last year and 42% warmer than normal.

  Total operating  expenses increased by $284,000,  or 2.3%,  primarily due to a
$548,000, or 18%, increase in depreciation and amortization expense caused by an
increase  in  utility  plant  and  the  installation  of new  software  systems.
Operations and maintenance  expenses,  decreased by $229,000, or 2.8%, primarily
due to savings in bad debt expenses and insurance expenses.

  Total other operating income  decreased  $493,000 for the period primarily due
to the financial performance of Transgas Inc. ("Transgas"), the Company's energy
trucking  subsidiary.  Transgas  recorded a loss of $41,000  for the three month
period  ended  September  30,  1998  compared  to a profit of  $452,000  for the
three-month period ended September 30, 1997. Warmer weather during the winter of
1997-98 led to a 77% decrease in the demand for hauls of  liquefied  natural gas
("LNG") -- the principal hauling commodity of Transgas.

  Interest and debt expense increased by $103,000,  or 4.9%, primarily due to an
increase in short-term interest expense.

                  Nine Months Ended September 30, 1998 and 1997

  Net income for the nine months ended  September  30, 1998 was  $7,226,000,  or
$0.83 per share, compared to $8,226,000,  or $0.96, per share for the comparable
1997 period.

  The Company's  operating  margin  decreased  $1,168,000,  or 2.1%,  during the
period  due to a 9.2%  decrease  in total  gas sold and  transported  caused  by
weather  which  was 12%  warmer  than  last  year and 13%  warmer  than  normal.
Effective in the second quarter of 1998, with the  implementation of an improved
customer  billing  system,  bills sent during May for gas consumed in April were
refined to reflect the Company's  higher winter rates.  This billing  refinement
resulted in an increase to  operating  margin of  $1,121,000  or $0.08 per share
during the period.  It will have the  opposite  impact in the fourth  quarter of
1998 because  November  bills for October  usage will now reflect the  Company's
lower summer rates.  Overall,  therefore,  the billing refinement is expected to
have a minimal effect on calendar year earnings.

  Operations and maintenance expenses decreased  $1,230,000,  or 4.9% during the
period,  due primarily to decreased  insurance  expenses and bad debt  expenses.
Depreciation and amortization expense increased $1,016,000,  or 11%, caused by a
$29,000,000,  or 8.8%, increase in utility property.  The decrease in operations
and maintenance  expense offset the increase in depreciation  and  amortization,
resulting in the $277,000, or 0.7%, decrease in total operations expense.

  Income  taxes  decreased  $600,000,  or 12%,  due to a lower  level of utility
income subject to tax.

  Total other operating income decreased $464,000,  or 96%, due to the financial
results of Transgas. A 55% decrease in Transgas' LNG hauls during the first nine
months of 1998 led to a $516,000  decrease in energy  trucking  net income.  The
decreased LNG hauls were  primarily due to the warmer than normal weather during
the winter of 1997-98.

  Interest and debt expense increased by $586,000, or 9.9% due to an increase in
short-term interest expense.


Liquidity and Capital Resources 

  On October 7, 1998,  the Company  issued  $10,000,000 of 5-year First Mortgage
Bonds under its Medium Term Note Program  (Series B), with an effective  rate of
5.50%.




<PAGE>




Year 2000

                               State of Readiness

     The  Company  has  identified  information  technology  ("IT")  systems and
embedded chip systems which are "mission critical",  i.e. those which would have
a significant  adverse impact on the operation of its core business and the core
business  of its  subsidiary,  Transgas,  in the  event of a Year  2000  ("Y2K")
problem.  Using its own specialized IT Department  personnel,  the Company is in
the process of finalizing  procedures for checking  mission  critical IT systems
for Y2K  compliance  and expects those  procedures to be finalized by the end of
1998. It is anticipated that any necessary  testing,  upgrading,  replacement or
other remediation of mission critical IT systems will be completed by the end of
the second  quarter of 1999.  Other  "less than  critical"  IT systems  are also
scheduled to be checked and tested and/or upgraded,  as required,  by the end of
the second quarter of 1999.

     With respect to embedded chip systems,  the Company expects to complete its
inventory, assessment and action plan in the last quarter of 1998. Any necessary
testing, upgrading, replacement or other remediation would then be scheduled for
completion by the end of the second quarter of 1999.

     The  Company is also in the  process of  identifying  material  third party
relationships for whom a detailed survey and assessment of Y2K readiness will be
undertaken and completed during the last quarter of 1998. Any necessary  testing
and  implementation  of risk  mitigation  strategies for high risk vendors would
then be  scheduled  for  completion  by the end of the  second  quarter of 1999.
Notwithstanding  the  Company's  efforts  with  third  parties,  there can be no
assurance that the systems of third parties on which the Company's  systems rely
will be timely  converted  or that any such  failure to convert by a third party
would not have an adverse effect on the Company's operations.

   The  Company's  merger with Eastern  Enterprises  is expected to be completed
mid-year  1999  and  in  connection  with  that  pending  merger,   the  Company
anticipates addressing certain Year 2000 issues through system integrations with
Boston Gas Company, Eastern's largest gas utility subsidiary.

                          Cost of Year 2000 Remediation

     Based on its  current  information,  without any system  integrations  with
Boston Gas Company, Colonial believes the cost of its Year 2000 compliance could
approximate  $1.5  million.  Substantially  all of this would be incurred in the
future.  System integrations with Boston Gas could  significantly  decrease this
amount.



<PAGE>


                Risks of Year 2000 Issues and Contingency Plans

     Based on its current information,  the Company anticipates that its mission
critical systems (including hardware, software and embedded chips) which may not
presently  be capable of  handling  Year 2000 data,  will be  upgraded  to be so
capable or replaced by systems that are so capable by mid-year 1999. The Company
believes  its  worst  case Y2K  scenario  would be if the  interstate  pipelines
transporting  natural gas to its distribution  system shut down or malfunctioned
in a way that seriously affected gas pressures or volumes. The Company is in the
process of  assessing  the Y2K  readiness of those  pipelines  and also plans to
develop a contingency  plan by mid-year  1999 to avoid  disruption of service to
its customers and those of its subsidiary, Transgas. Pending Merger into Eastern
Enterprises

   On October 17, 1998,  the Company and Eastern  Enterprises,  a  Massachusetts
business trust ("Eastern"), entered into an Agreement and Plan of Reorganization
which  provides  for the merger of the  Company  with and into a  subsidiary  of
Eastern, as a result of which the Company will become a wholly-owned  subsidiary
of  Eastern.   Eastern's  other   subsidiaries   presently   include  two  other
Massachusetts natural gas distribution  companies,  Boston Gas Company and Essex
County Gas Company. Under the Agreement, the outstanding shares of the Company's
common  stock will  convert  into the right to receive  cash and Eastern  common
stock as set forth in the  Agreement.  Completion  of the  merger is  subject to
approval of the Company's stockholders and, if required,  Eastern's shareholders
and receipt of  satisfactory  regulatory  approvals,  including  approval of the
Massachusetts Department of Telecommunications and Energy and the Securities and
Exchange Commission and antitrust clearance.

Forward-Looking Information

   This report and other Company reports and statements issued or made from time
to time contain  forward  looking  statements  which are subject to the inherent
uncertainties in predicting future results and conditions.  Certain factors that
could cause actual results to differ  materially  from those  projected in these
forward  looking  statements  include,  but are not  limited  to, the ability to
successfully  integrate  the  operations  of the  Company  with  Eastern and its
subsidiaries,  variations  in weather,  changes in the  regulatory  environment,
customer's preferences on energy sources, general economic conditions, increased
competition,  the ability of the Company to address Y2K non-compliant situations
and other uncertainties, all of which are difficult to predict and many of which
are beyond the control of the Company.





<PAGE>


PART II - OTHER INFORMATION

Item 5.  Other Information

      None

Item 6.  Exhibits and Reports on Form 8-K

a.   Exhibits
     10.1 Form of  Employment  Agreement*  dated as of October  13, 1998 by and
          between   Colonial  Gas  Company  and  its   executives   (individual
          agreements were executed by the Company with F. L. Putnam,  Jr., F L.
          Putnam,  III, C. W. Sawyer,  N.  Stavropoulos,  J. P.  Harrington and
          certain other officers).

     10.2 Employment  Agreement*  dated as of October  13,  1999 by and between
          Colonial Gas Company, Transgas Inc. and V. W. Baur.

     10.3 Colonial Gas Company Retention Bonus Plan* effective as of October 19,
          1998.

     27   Financial Rate Schedule.

*   Management Contracts

b.   Reports on Form 8-K
     As reported on the Form 8-K filed by the Company  with the  Securities  and
Exchange  Commission  on October 21, 1998,  the Company and Eastern  Enterprises
entered into an Agreement and Plan of  Reorganization  dated October 17, 1998, a
copy of which is filed as an Exhibit to Form 10-K.
<PAGE>


SIGNATURES




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

                                      COLONIAL GAS COMPANY
                                             (Registrant)


Date: November 10, 1998             s/F. L. Putnam, III             
                                   F. L. Putnam, III
                                   President and Chief Executive Officer


Date: November 10, 1998             s/Nickolas Stavropoulos    
                                   Nickolas Stavropoulos
                                   Executive Vice President - Finance,
                                   Marketing and Chief Financial Officer