SECURITIES AND EXCHANGE COMMISSION
                   Washington, D.C.  20549
                              
                          FORM 10-Q


x     Quarterly Report Pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934

      For the quarterly period ended March 31, 1997

                             OR

      Transition Report Pursuant to Section 13 or 15(d) of
      the Securities Exchange Act of 1934

      For the transition period from               to

      COMMISSION FILE NUMBER  0-10007


                    COLONIAL GAS COMPANY
      (Exact name of registrant as specified in its charter)

         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)


Registrant's telephone number, including area code: (508) 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 May 1, 1997 was 8,568,245.


                    COLONIAL GAS COMPANY

                           INDEX


                                                    PAGE NO.

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

  Consolidated Condensed Statements of Income -
      Three Months Ended March 31, 1997 and 1996       3
      Twelve Months Ended March 31, 1997 and 1996      4

  Consolidated Condensed Balance Sheets -
      March 31, 1997, December 31, 1996 and
      March 31, 1996                                 5-6

  Consolidated Condensed Statements of Cash Flows -
      Three Months Ended March 31, 1997 and 1996       7
      Twelve Months Ended March 31, 1997 and 1996

  Notes to Consolidated Condensed Financial 
  Statements 					       9

Item 2. Management's Discussion and Analysis of 
        Results of Operations and Financial 
        Condition                                  10-11


PART II - OTHER INFORMATION

Item 5. Other Information                             12

Item 6. Exhibits and Reports on Form 8-K              12
               


                PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

            COLONIAL GAS COMPANY AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                         (UNAUDITED)
                                         Three Months Ended
                                             March 31,
                                          1997       1996
                                        (In Thousands Except
                                         Per Share Amounts)

Operating Revenues                       $83,324    $77,578
  Cost of gas sold                        43,717     37,995
      Operating Margin                    39,607     39,583

Operating Expenses:
  Operations                               7,727      9,117
  Maintenance                              1,146      1,118
  Depreciation and Amortization            2,973      2,895
  Taxes, other than income                 1,382      1,395
      Total Operating Expenses            13,228     14,525

Income Taxes                               9,432      8,845

Utility Operating Income                  16,947     16,213

Other Operating Income:
  Truck transportation revenues            1,339      3,577
  Truck transportation expenses, 
      including income taxes and interest  1,258      2,661
      Truck transportation net income         81        916
  Other, net of income taxes                  49         55

Total Other Operating Income                 130        971

Non-Operating Income, Net                    121        177

Income Before Interest and Debt Expense   17,198     17,361

Interest and Debt Expense                  1,905      2,133

Net Income                               $15,293    $15,228

Average Common Shares Outstanding          8,543      8,377

Income per Average Common Share          $  1.79     $ 1.82

Dividends Paid per Common Share          $  .325     $ .320

       (See accompanying notes to consolidated condensed
                     financial statements)
            
             COLONIAL GAS COMPANY AND SUBSIDIARIES
         CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                         (UNAUDITED)

                                         Twelve Months Ended
                                             March 31,
                                           1997       1996
                                         (In Thousands Except
                                          Per Share Amounts)

Operating Revenues                       $176,674  $171,874
  Cost of gas sold                         92,909    86,766
      Operating Margin                     83,765    85,108

Operating Expenses:
  Operations                               29,993    32,175
  Maintenance                               4,505     4,304
  Depreciation and Amortization            11,307    10,597
  Taxes, other than income                  5,357     5,189
      Total Operating Expenses             51,162    52,265

Income Taxes                                9,675     9,524

Utility Operating Income                   22,928    23,319

Other Operating Income:
  Truck transportation revenues             8,794     9,390
  Truck transportation expenses, 
      including income taxes and interest   7,602     7,994
      Truck transportation net income       1,192     1,396
  Other, net of income taxes                  203        92
Total Other Operating Income                1,395     1,488

Non-Operating Income, Net                     701       898

Income Before Interest and Debt Expense    25,024    25,705

Interest and Debt Expense                   8,481     9,163

Net Income                                $16,543   $16,542

Average Common Shares Outstanding           8,470     8,327

Income per Average Common Share           $  1.95   $  1.99

Dividends Paid per Common Share           $  1.30   $  1.28

 (See accompanying notes to consolidated condensed financial
                         statements)


            COLONIAL GAS COMPANY AND SUBSIDIARIES
            CONSOLIDATED CONDENSED BALANCE SHEETS
                           ASSETS

                              March 31,  December 31,  March 31,
                                1997       1996          1996
                             (Unaudited)              (Unaudited)
                                        (In Thousands)

Utility Property:
At original cost               $338,174    $333,319    $312,507
  Accumulated depreciation      (85,433)    (82,336)    (75,629)
      Net utility property      252,741     250,983     236,878

Non-Utility Property - Net        5,879       5,925       5,372

      Net property              258,620     256,908     242,250

Capital Leases - Net              2,487       1,811       1,995

Current Assets:
  Cash and cash equivalents       3,406       3,541       7,844
  Accounts receivable            32,102      17,719      32,276
      Allowance for doubtful 
        accounts                 (3,445)     (2,715)     (3,093)
  Accrued utility revenues        5,869       6,333       6,448
  Unbilled gas costs             12,296      19,238       5,816
  Fuel and other inventories      8,785      11,958       7,511
  Prepayments and other current 
    assets                        5,778      11,484       4,838

      Total current assets       64,791      67,558      61,640

Deferred Charges and Other Assets:
  Unrecovered deferred income 
    taxes                         9,580       9,774      10,368
  Unrecovered demand side 
    management costs              7,983       7,075       4,791
  Unrecovered environmental 
    expenses - incurred           4,130       4,011       4,836
  Unrecovered environmental 
    expenses - accrued            1,063       1,183       2,225
  Unrecovered transition 
    costs - accrued               4,500       4,500       3,600
  Other                          11,499      11,592      12,287
      Total deferred charges
        and other assets         38,755      38,135      38,107

Total Assets                   $364,653    $364,412    $343,992

 (See accompanying notes to consolidated condensed financial
                         statements)


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

                               March 31,  December 31,  March 31,
                                 1997        1996         1996
                              (Unaudited)              (Unaudited)
                                         (In Thousands)
Capitalization:
  Common equity:
   Common Stock - par value $3.33 per share
     Authorized - 15,000 shares
     Issued and outstanding - 
       8,561, 8,518 and 8,398 
       shares                   $28,508     $28,366     $27,966
   Premium on common stock       54,985      54,221      52,024
   Retained earnings             43,838      31,319      38,307
     Total Common equity        127,331     113,906     118,297
   Long-term debt                85,226      95,266      80,381

      Total capitalization      212,557     209,172     198,678

Capital Lease Obligations         1,538         930       1,155

Current Liabilities:
  Current maturities of
    long-term debt               15,155       5,152      11,144
  Current capital lease 
    obligations                     949         881         839
  Notes payable                  40,100      50,400      40,000
  Gas inventory purchase 
    obligations                   7,412      13,039       6,040
  Accounts payable                8,556      14,544      12,812
  Other                          17,733      10,153      13,820

      Total current liabilities  89,905      94,169      84,655

Deferred Credits and Reserves:
  Deferred income taxes-funded   37,023      35,886      33,346
  Deferred income taxes-unfunded  9,580       9,774      10,368
  Accrued environmental expenses  1,063       1,183       2,225
  Accrued transition costs        4,500       4,500       3,600
  Other                           8,487       8,798       9,965

      Total deferred credits 
        and reserves             60,653      60,141      59,504

Total Capitalization and 
  Liabilities                  $364,653    $364,412    $343,992

 (See accompanying notes to consolidated condensed financial
                         statements)


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


                                            Three Months Ended
                                                March 31,
                                             1997       1996
                                              (In Thousands)

Cash Flows From Operating Activities:
  Net income                                $15,293     $15,228
  Adjustments to reconcile net income 
    to net cash                               2,540       4,603
  Changes in current assets and liabilities   6,173       4,734

      Net cash provided by operating 
        activities                           24,006      24,565

Cash Flows From Investing Activities:
  Capital expenditures                       (4,934)     (4,746)
  Change in deferred accounts                (1,376)        733

      Net cash used in investing 
        activities                           (6,310)     (4,013)

Cash Flows From Financing Activities:
  Dividends paid on Common Stock             (2,774)     (2,680)
  Issuance of Common Stock                      907         680
  Issuance of long-term debt, net of 
    issuance costs                                0       9,920
  Retirement of long-term debt, 
    including premiums                          (37)        (34)
  Change in notes payable                   (10,300)    (21,835)
  Change in gas inventory purchase 
    obligations                              (5,627)     (6,300)
      Net cash used in financing 
        activities                          (17,831)    (20,249)

Net (decrease) increase in cash and 
  cash equivalents                             (135)        303
Cash and cash equivalents at beginning 
  of period                                   3,541       7,541

Cash and cash equivalents at end of
  period                                     $3,406      $7,844

Supplemental Disclosures of Cash Flow Information:
    Cash paid during the period for:
      Interest - net of amount capitalized   $2,812      $2,167

      Income and franchise taxes             $  529      $  454

 (See accompanying notes to consolidated condensed financial
                         statements)


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


                                           Twelve Months Ended
                                                March 31,
                                             1997       1996
                                              (In Thousands)

Cash Flows From Operating Activities:
  Net income                                $16,543     $16,542
  Adjustments to reconcile net income 
    to net cash                              20,456      14,681
  Changes in current assets and 
    liabilities                             (12,430)     (5,640)

      Net cash provided by operating 
        activities                           24,569      25,583

Cash Flows From Investing Activities:
  Capital expenditures                      (28,626)    (26,795)
  Change in deferred accounts                (2,924)       (169)

      Net cash used in investing activities (31,550)    (26,964)

Cash Flows From Financing Activities:
  Dividends paid on Common Stock            (11,013)    (10,657)
  Issuance of Common Stock                    3,503       2,596
  Issuance of long-term debt, net of 
    issuance costs                           19,867      26,941
  Retirement of long-term debt, including 
    premiums                                (11,286)    (24,815)
  Change in notes payable                       100       7,000
  Change in gas inventory purchase 
    obligations                               1,371      (2,000)
      Net cash (used in) provided by 
        financing activities                  2,542        (935)

Net (decrease) increase in cash and 
  cash equivalents                           (4,439)     (2,316)
Cash and cash equivalents at beginning 
  of period                                   7,845      10,160

Cash and cash equivalents at end of period   $3,406      $7,844

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period for:
      Interest - net of amount capitalized   $9,795      $9,804

      Income and franchise taxes             $6,817      $3,684

 (See accompanying notes to consolidated condensed financial
                         statements)


            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 March 31, 1997 and 1996 and results of
    operations for the three and twelve month periods ended
    March 31, 1997 and 1996 and cash flows for the three and
    twelve month periods ended March 31, 1997 and 1996.

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 periods ending March 31,
    1997 and 1996 are not necessarily indicative of the
    results to be expected for the full year.

3.  During the three months ended March 31, 1997, the Company
    issued 43,000 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 $142,000 and
    Premium on Common Stock increased $764,000.

4.  Contingencies

    Reference is made to Note I/Contingencies of the Notes to
    Consolidated Financial Statements contained within the
    Company's 1996 Annual Report to Stockholders.

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


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

Results of Operations

         Three Months Ended March 31, 1997 and 1996

Net  income  for  the  three months ending  March  31,  1997
increased $65,000 to $15,293,000 compared to $15,228,000 for
the same period last year. Weather for the first quarter was
7.9%  warmer than the prior year, however, operating  margin
remained  about the same, principally due to  3.7%  customer
growth.   Operating income for Colonial's utility  operation
increased $734,000 or 4.5%, primarily caused by a $1,390,000
or  15%  decrease in operations expenses -- including  lower
bad   debts,  expiration  of  the  amortization  of  certain
deferred expenses and decreased insurance expense.

Income  taxes  increased $587,000 or 6.6% due  to  a  higher
level of utility income subject to tax.

Other  operating  income  (net of  income  taxes)  decreased
$841,000  over  the comparable 1996 period  primarily  as  a
result of a $835,000 decrease in Transgas' net income  which
is attributable to the warmer weather. Compared to the first
quarter of 1996, Transgas hauls of LNG decreased 65%.

Interest  expense  decreased  $228,000  or  10.7%.  Interest
expense  is  less than the same period last year principally
due  to  greater  interest  income  on  higher  balances  of
regulatory  assets (unrecovered gas cost fuel &  unrecovered
demand   side  management  cost)  which  is  offset  against
interest expense.


         Twelve Months Ended March 31, 1997 and 1996

Net  income  was  $16,543,000 for the twelve  months  ending
March  31,  1997 compared to $16,542,000 for the  comparable
1996 period.

Net  income  for the twelve month period remained  the  same
despite  weather  that was 7.8% warmer  than  the  preceding
twelve  months.  The warmer weather caused operating  margin
to  decrease  $1,343,000, which was offset by  a  $1,103,000
decrease  in  operating expenses and a $682,000 decrease  in
interest and debt expense.

Operations  expenses were down $2,182,000  or  6.8%  due  to
lower  bad debts, expiration of the amortization of  certain
deferred  charges  and  decreased  insurance  expense.  This
decrease was partially offset by increased depreciation.

Other operating income (net of income taxes) decreased
$93,000 over the comparable 1996 period. The net income of
Transgas for the twelve months ending March 31, 1997
decreased $204,000 or 15% due to the warm winter of 1996-
1997, which resulted in decreased demand for energy trucking
services.  The decrease in Transgas net income was partially
offset by increased merchandise and jobbing net income of
$111,000.

Interest  and  debt  expense  decreased  $682,000  or  7.4%.
Interest  expense has decreased principally due  to  greater
interest  income  on  higher balances of  regulatory  assets
(unrecovered  gas  costs  fuel  &  unrecovered  demand  side
management costs) which is offset against interest expense.


Liquidity and Capital Resources
 
  No issuance of long term debt occurred in the first
  quarter of 1997.
 
  On April 16, 1997, the quarterly dividend on the Company's
common stock was increased to $.335 per share or an
annualized dividend rate of $1.34 per share. This is the
61st consecutive year that the Company has paid a dividend
to common shareholders and the 18th consecutive year that it
has increased its per share dividend payment.
 

                 PART II - OTHER INFORMATION

Item 5. Other Information

On January 13, 1997,  the Company entered into joint venture
agreements with Cabot LNG Corporation ("Cabot LNG").  The
joint venture agreements are subject to certain regulatory
approvals which remain pending.  It is anticipated that the
regulatory decisions will be issued during the second or
third quarter of 1997.   If the necessary approvals are
obtained:  (1) the Company will sell a 50% interest in
Transgas to Cabot LNG; and (2) the Company will lease its
LNG facility in Tewksbury, Massachusetts to a joint venture
entity owned 50/50 by the Company and Cabot LNG. The
purchase price for the 50% interest in Transgas is
$7,000,000. The Company will recognize a one-time gain of
approximately $.35 per share at the time of the Transgas
sale and after such sale, will recognize 50% of the net
income of Transgas on an equity basis.  In connection with
the lease of the Tewksbury LNG facility, Cabot LNG"s
marketing subsidiary, Distrigas of Massachusetts
Corporation, will market and sell vaporized LNG from the
Tewksbury LNG facility above the Company's requirements,
with the joint venture entity sharing in the net revenues
from such sales.

Item 6. Exhibits and Reports on Form 8-K

a.  Exhibits

    None

b.  Reports on Form 8-K

    None


                         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: May 12, 1997              s/F.L. Putnam,III
                                F.L. Putnam, III
                                President and Chief 
                                Executive Officer


Date: May 12, 1997              s/Nickolas Stavropoulos
                                Nickolas Stavropoulos
                                Executive Vice President 
                                - Finance, Marketing and Chief
                                Financial Officer

        [END OF FORM 10-Q FOR PERIOD ENDING MARCH 31, 1997]