FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



           (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2002
                                               ---------------

                                       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
                    D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
                   ------------------------------------------
             (Exact name of registrant as specified in its charter)


  MASSACHUSETTS                                         04-3480443
  ---------------                                      ------------
(State or other jurisdiction of                      (I.R.S. Employer
 incorporation or organization)                      Identification No.)


                 ONE BEACON STREET, BOSTON, MASSACHUSETTS 02108
                 -----------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                  617-742-8400
               --------------------------------------------------
              (Registrant's telephone number, including area code)


                                      None
               --------------------------------------------------
               Former name, former address and former fiscal year,
                          if changed since last report.


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

      Yes  X    No
          ---      ---

      Common stock of Registrant at the date of this report was 100 shares, all
      held by KeySpan New England, LLC.

      The Registrant meets the conditions set forth in General Instruction
      H(1)(a) and (b) of Form 10-Q and is filing this Form with the reduced
      disclosure format.

<PAGE>


                          PART I. FINANCIAL INFORMATION
                          -----------------------------

ITEM 1.  FINANCIAL STATEMENTS
-----------------------------

Company or group of companies for which report is filed:
<TABLE>

COLONIAL GAS COMPANY
Statements of Operations
------------------------
<CAPTION>
                                                                               (Unaudited)
                                                                             (In Thousands)
                                                                For the                               For the
                                                          Three Months Ended                     Six Months Ended
                                                          ------------------                     ----------------
                                                       June 30,           June 30,          June 30,          June 30,
                                                         2002               2001              2002              2001
                                                        -------            -------           -------           -------

<S>                                                     <C>                 <C>             <C>               <C>
OPERATING REVENUES                                       $32,434            $ 42,185         $117,241          $164,233
    Cost of gas sold                                      18,185              28,431           65,217           107,798
                                                         -------             -------           ------           -------
    Operating Margin                                      14,249              13,754           52,024            56,435
                                                         -------             -------           ------           -------
OPERATING EXPENSES:
    Operations and maintenance                             8,041               8,088           15,355            15,106
    Depreciation and amortization                          3,965               3,631            7,931             7,501
    Amortization of goodwill                                   -               2,334                -             4,668
    Operating taxes                                        1,082               1,018            2,144             2,481
                                                          ------             -------           ------            ------
    Total Operating Expenses                              13,088              15,071           25,430            29,756
                                                          ------             -------           ------            ------
OPERATING INCOME (LOSS)                                    1,161              (1,317)          26,594            26,679

OTHER INCOME (LOSS), NET                                      16                  21               (7)              (71)
                                                          ------               -----            ------           -------

INCOME (LOSS) BEFORE INTEREST EXPENSE
AND INCOME TAXES                                           1,177              (1,296)          26,587            26,608
                                                           -----              -------          ------            ------

INTEREST EXPENSE:
    Long-term debt                                         1,957               2,133            4,083             4,249
    Other, including Advance from KeySpan
           and Utility Pool Borrowings                     4,241               4,290            8,370             8,496
    Less - Interest during construction                     (452)                (46)            (493)              (67)
                                                           ------              -----           ------            -------
    Total Interest Expense                                 5,746               6,377           11,960            12,678
                                                           ------              -----           ------            -------

INCOME TAXES:
    Current                                               (1,526)             (2,531)           5,293             6,084
    Deferred                                                (317)                635              343             1,149
                                                            -----             -------           -----             -----
    Total Income Taxes (Benefit)                          (1,843)             (1,896)           5,636             7,233
                                                          -------             -------           -----             -----

NET INCOME (LOSS)                                        $(2,726)            $(5,777)          $8,991            $6,697
                                                          =======             =======           =====             =====
</TABLE>

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


<PAGE>


<TABLE>

Colonial Gas Company
--------------------
Balance Sheets
--------------
<CAPTION>


                                                                                      Unaudited
                                                                                    (In Thousands)

                                                                                 June 30,            December 31,
                                                                                   2002                  2001
                                                                                -----------          ------------
<S>                                                                                <C>                   <C>
ASSETS

     GAS PLANT, at cost                                                              $420,184             $418,099
     Construction work-in-progress                                                     20,400                9,763
     Less-Accumulated depreciation                                                   (140,688)            (133,127)
                                                                                     --------             --------
                                                                                      299,896              294,735
                                                                                     --------             --------

CURRENT ASSETS:

     Cash and cash equivalents                                                              -                  121
     Accounts receivable                                                               23,146               23,240
     Allowance for uncollectible accounts                                              (4,166)              (3,709)
     Accounts receivable - affiliates                                                  17,679               25,713
     Accrued utility revenue                                                            2,754               19,064
     Deferred gas costs                                                                 6,102               15,579
     Gas in Storage, at average cost                                                   10,834               16,832
     Materials and supplies, at average cost                                              743                  695
     Prepaid expenses                                                                      72                   72
                                                                                       ------              -------
                                                                                       57,164               97,607
                                                                                       ------              -------


OTHER ASSETS:

     Goodwill                                                                         377,652              377,652
     Deferred charges and other assets                                                  6,953                6,998
                                                                                     --------             --------
                                                                                      384,605              384,650
                                                                                     --------             --------

TOTAL ASSETS                                                                         $741,665              $776,992
                                                                                      ========             ========
</TABLE>


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


<PAGE>


<TABLE>
Colonial Gas Company
--------------------
Balance Sheets
--------------
<CAPTION>
                                                                                              Unaudited
                                                                                             (In Thousands)

                                                                                       June 30,         December 31,
                                                                                         2002               2001
                                                                                  -----------------   ----------------
<S>                                                                                       <C>                <C>
CAPITALIZATION AND LIABILITIES

CAPITALIZATION:
    Common stockholder's investment-
      Common stock, $1 par value-
      Authorized-200,000 shares;outstanding-100 shares                                    $      -           $      -
      Amounts in excess of par value                                                       269,430            269,430
    Retained earnings                                                                          263              5,272
    Accumulated comprehensive income                                                        (3,433)            (5,281)
                                                                                          --------            -------
      Total common stockholder's investment                                                266,260            269,421
    Long-term obligations, less current portion                                            105,621            120,205
    Advance from KeySpan Corporation                                                       214,000            200,000
                                                                                           -------            -------
      Total Capitalization                                                                 585,881            589,626
                                                                                          --------           --------

CURRENT LIABILITIES:
     Current portion of long-term obligations                                                  248                296
     Note payable utility pool                                                              58,845             68,517
     Note payable utility pool-gas inventory financing                                       9,238             21,958
     Accounts payable                                                                       11,685             12,538
     Accrued taxes                                                                             938                821
     Accrued interest                                                                        3,504              8,726
     Other                                                                                     604              1,194
                                                                                           -------            -------
                                                                                            85,062            114,050
                                                                                           -------            -------

OTHER LIABILITIES:
     Deferred income taxes                                                                  36,918             38,322
     Unamortized investment tax credits                                                      2,300              2,402
     Postretirement benefits obligation                                                      6,996              6,770
     Other                                                                                  24,508             25,822
                                                                                          --------            -------
                                                                                            70,722             73,316
                                                                                          --------            -------

TOTAL CAPITALIZATION AND LIABILITIES                                                      $741,665           $776,992
                                                                                          ========           ========
</TABLE>

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


<PAGE>


<TABLE>
   Colonial Gas Company
   --------------------
   Statement of Cash Flows
   -----------------------
<CAPTION>
                                                                                              Unaudited
                                                                                            (In Thousands)

                                                                                       For the Six Months Ended
                                                                                       ------------------------
                                                                                 June 30,      June 30,
                                                                                   2002                    2001
                                                                                ------------         ---------------
<S>                                                                                 <C>                  <C>
Cash flows from operating activities:
     Net income                                                                      $8,991                 $6,697
     Adjustments to reconcile net income to
         cash provided by operating activities:
         Depreciation and amortization                                                7,931                 12,169
         Deferred taxes                                                                 343                  1,149
         Other changes in assets and liabilities:
              Accounts receivable                                                       677                (10,872)
              Accounts receivable - affiliates                                        8,034                  8,883
              Accrued utility revenue                                                16,310                 18,852
              Deferred gas costs                                                      9,477                  5,376
              Gas in Storage                                                          5,950                 (1,377)
              Accounts payable                                                         (979)               (19,508)
              Accrued taxes                                                             117                  6,221
              Accrued interest                                                       (5,222)                12,324
              Other                                                                  (2,431)                 3,045
                                                                                    --------              --------
Cash provided by operating activities                                                49,198                 42,959
                                                                                    -------               --------

Cash flows from investing activities:
     Capital expenditures                                                           (12,343)               (10,269)
                                                                                  ---------              ---------
Cash used for investing activities                                                  (12,343)               (10,269)
                                                                                  ---------              ---------

Cash flows from financing activities:
     Repayment of long-term debt                                                    (15,000)                     -
     Repayments of note payable-utility pool                                         (9,256)               (26,005)
     Repayments of note payable
          -gas inventory financing                                                  (12,720)                (6,656)
     (Repayment) Advance from KeySpan                                                14,000                (50,000)
     Capital Contribution                                                                 -                 50,000
     Dividend paid to KeySpan                                                       (14,000)                     -
                                                                                   --------                -------
Cash used for financing activities                                                  (36,976)               (32,661)
                                                                                   --------               --------

Increase (decrease) in cash and cash equivalents                                       (121)                    29

Cash and cash equivalents at beginning of period                                        121                    124
                                                                                   --------                -------

Cash and cash equivalents at end of period                                         $      -                $   153
                                                                                   ========                =======
</TABLE>



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



<PAGE>



                              COLONIAL GAS COMPANY
                              --------------------

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------

                                    UNAUDITED
                                    ---------

                                  June 30, 2002
                                  -------------


1.   ACCOUNTING POLICIES AND OTHER INFORMATION
     -----------------------------------------


     Colonial  Gas Company  d/b/a  KeySpan  Energy  Delivery  New  England  (the
     "Company") is a gas distribution  company engaged in the transportation and
     sale of natural gas to  residential,  commercial and industrial  customers.
     The  Company's  service  territory   includes  24  municipalities   located
     northwest  of  Boston  and on  Cape  Cod.  The  Company  is a  wholly-owned
     subsidiary  of  KeySpan  New  England,  LLC  ("KNE  LLC")  and an  indirect
     wholly-owned  subsidiary of KeySpan Corporation  ("KeySpan"),  a registered
     holding  company under the Public Utility  Holding  Company Act of 1935, as
     amended.

     It is the  Company's  opinion that the  accompanying  financial  statements
     contain all adjustments  necessary to present fairly its financial position
     as of June 30, 2002,  and the results of its  operations  for the three and
     six months ended June 30, 2002 and June 30, 2001, as well as cash flows for
     the six  months  ended June 30,  2002 and June 30,  2001.  Results  for the
     periods are not  necessarily  indicative  of results to be expected for the
     year, due to the seasonal nature of the Company's operations. Other than as
     noted,  adjustments  were  of a  normal  recurring  nature  and  accounting
     policies have been applied in a manner consistent with prior periods.

     The  preparation  of financial  statements  in  conformity  with  generally
     accepted  accounting  principles  requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities, the
     disclosure  of  contingent  assets  and  liabilities  at  the  date  of the
     financial  statements  and the  reported  amounts of revenues  and expenses
     during  the  reporting  period.  Actual  results  could  differ  from those
     estimates.

     Certain information and footnote disclosures normally included in financial
     statements  prepared  in  accordance  with  generally  accepted  accounting
     principles  have been  condensed  or omitted  in this Form 10-Q.  Therefore
     these interim  financial  statements should be read in conjunction with the
     Company's  2001 Annual  Report filed on Form 10-K with the  Securities  and
     Exchange Commission.  The December 31, 2001 financial statement information
     has been derived from the audited financial statements.

2.   Seasonal Aspect
     ---------------

     The gas distribution business is influenced by seasonal weather conditions.
     Annual  revenues  are  principally   realized  during  the  heating  season
     (November  1, to April 30) as a result of the large  proportion  of heating
     sales  in  these  months.  Accordingly,  results  of  operations  are  most
     favorable in the first  quarter of the Company's  fiscal year,  followed by
     the fourth quarter.  Losses are generally  incurred in the second and third
     quarters.

3.   Accounting for the Effects of Rate Regulation
     ---------------------------------------------

     In 1999, the Massachusetts Department of Telecommunications and Energy (the
     "Department")  approved a rate plan resulting in a ten-year  freeze of base
     rates at current  levels.  Due to the length of the base rate  freeze,  the
     Company  was  required to  discontinue  its  application  of  Statement  of
     Financial  Accounting Standards ("SFAS") No. 71 "Accounting for the Effects
     of Certain Types of Regulation".

<PAGE>

4.   Recent Accounting Pronouncements
     --------------------------------

     On January 1, 2002, the Company adopted SFAS 141, "Business  Combinations",
     and SFAS 142 "Goodwill and Other Intangible Assets".  The key concepts from
     the two  interrelated  Statements  include  mandatory  use of the  purchase
     method  when  accounting  for  business  combinations,   discontinuance  of
     goodwill amortization,  a revised framework for testing goodwill impairment
     at a "reporting  unit" level, and new criteria for the  identification  and
     potential  amortization  of  other  intangible  assets.  Other  changes  to
     existing accounting  standards involve the amount of goodwill to be used in
     determining  the gain or loss on the disposal of assets,  and a requirement
     to test goodwill for impairment at least annually.

     SFAS 142 allows for various valuation methodologies to test for impairment,
     including a  discounted  cash flow method,  as compared to an  undiscounted
     cash  flow  method,   which  was  utilized  under  the  previous  standard.
     Impairment is deemed to exist when the carrying amount of goodwill  exceeds
     its implied fair value.  Upon  adoption of SFAS 142,  any amounts  impaired
     initially will be recorded as a cumulative  effect of an accounting  change
     in the statement of income and any impairment  thereafter  will be recorded
     as an operating  expense.  The  discounted  cash flow model  requires broad
     assumptions  and  significant  judgement by management  including,  but not
     limited to, projections of revenues, working capital, capital expenditures,
     taxes and cost of capital.

     The Company has  completed  its  impairment  tests and  determined  that no
     impairment  exists.  Fair value was determined using a discounted cash flow
     methodology.  These  impairment  tests are  required to be  performed  upon
     adoption of SFAS 142 and at least annually thereafter.  On an ongoing basis
     (absent  any  impairment  indicators),   the  Company  expects  to  perform
     impairment tests during the fourth quarter.

     As  discussed  above,   amortization  of  goodwill  has  been  discontinued
     effective  January  1, 2002.  For the three and six  months  ended June 30,
     2001,  goodwill  amortization was $2.3 and $4.7 million,  respectively.  As
     required by SFAS 142, below is a reconciliation  of reported net income for
     the three and six months ended June 30, 2001 and pro-forma net income,  for
     the same periods, adjusted for the discontinuance of goodwill amortization.

<TABLE>
<CAPTION>
     ---------------------------------- ------------------------ ------------------- -------------------- --------------------

                                        Three Months             Three Months        Six Months           Six Months
                                           Ended                    Ended              Ended                Ended
                                        June 30, 2002            June 30, 2001       June 30, 2002        June 30, 2001
     ---------------------------------- ------------------------ ------------------- -------------------- --------------------
    <S>                                <C>                       <C>                <C>                  <C>
     Net Income                         $(2,726)                 $ (5,777)           $8,991               $6,697

     Add back: goodwill amortization
                                              -                     2,334                 -                4,668
     ---------------------------------- ------------------------ ------------------- -------------------- --------------------

     Adjusted Net Income                $(2,726)                 $ (3,443)           $8,991               $11,365
     ---------------------------------- ------------------------ ------------------- -------------------- --------------------
</TABLE>

<PAGE>


     In July of 2001, the Financial  Accounting  Standards Board ("FASB") issued
     SFAS No. 143, "Accounting for Asset Retirement  Obligations".  The Standard
     requires  entities  to record  the fair value of a  liability  for an asset
     retirement  obligation  in the  period  in which it is  incurred.  When the
     liability  is  initially  recorded,  the entity will  capitalize  a cost by
     increasing the carrying amount of the related  long-lived asset. Over time,
     the liability is accreted to its then present  value,  and the  capitalized
     cost is  depreciated  over  the  useful  life of the  related  asset.  Upon
     settlement of the  liability,  an entity either  settles the obligation for
     its recorded amount or incurs a gain or loss upon settlement.  The standard
     is effective for fiscal years  beginning  after June 15, 2002, with earlier
     application encouraged.  The Company is currently evaluating the impact, if
     any,  that  this  Statement  may  have on its  results  of  operations  and
     financial position.

     SFAS No. 144,  "Accounting  for the  Impairment  or Disposal of  Long-Lived
     Assets,"  was  effective  January 1, 2002,  and  addresses  accounting  and
     reporting for the impairment or disposal of long-lived assets. SFAS No. 144
     supersedes  SFAS No. 121,  "Accounting  for the  Impairment  of  Long-Lived
     Assets and for Long-Lived Assets to Be Disposed Of" and APB Opinion No. 30,
     "Reporting the Results of Operations-Reporting the Effects of Disposal of a
     Segment of a Business." SFAS No. 144 retains the fundamental  provisions of
     SFAS No. 121 and  expands  the  reporting  of  discontinued  operations  to
     include  all  components  of  an  entity  with   operations   that  can  be
     distinguished  from the rest of the entity and that will be eliminated from
     the  ongoing  operations  of the  entity  in a  disposal  transaction.  The
     implementation  of this Statement,  effective January 1, 2002, did not have
     an impact on the Company's results of operations and financial position.

5.   Environmental Matters
     ---------------------

     The  Company,  like many other  companies in the natural gas  industry,  is
     party to  governmental  proceedings  requiring  investigation  and possible
     remediation of former manufactured gas plant ("MGP") and related sites. The
     Company may have or share  responsibility  under  applicable  environmental
     laws for the remediation of one former MGP site and nine related  satellite
     disposal sites, as well as one non-MGP site and a federal superfund site.

     As of June 30,  2002,  the  Company  estimates  the  remaining  cost of its
     MGP-related  environmental  cleanup  activities to be $2.7  million,  which
     amount has been accrued by the Company as a reasonable estimate of probable
     cost for known sites.  Expenditures  incurred to date with respect to these
     MGP-related activities total $13.2 million.

     By a rate  order  issued on May 25,  1990,  the  Department  approved,  for
     ratemaking  purposes,  recovery  of all  prudently  incurred  environmental
     response costs  associated  with former MGP related sites over a seven-year
     period without carrying charges.

     The Company has received and responded to Requests for Information from the
     U.S. Environmental Protection Agency ("EPA") pursuant to Section 104 of the
     Comprehensive  Environmental  Response,   Compensation  and  Liability  Act
     ("CERCLA"),  regarding one federal superfund site that the EPA is currently
     investigating.  The Company cannot determine the amount of its liability at
     this time.

6.   Related Party Transactions
     --------------------------

     The Company,  and all utility  subsidiaries  of KeySpan,  participate  in a
     utility money pool  established  by KeySpan.  KeySpan  Corporate  Services,
     LLC("KCS"), a subsidiary service company of KeySpan,  administers the money
     pool and  provides  financing  to the Company  for working  capital and gas
     inventory.  The money pool is funded, in part, through surplus funds in the
     treasuries  of money  pool  participants.  Interest  income or  expense  is
     recorded  by the Company  for net funds  advanced  to or borrowed  from the
     money pool at an interest  rate  generally  equal to KeySpan  Corporation's
     short-term  borrowing rate. Interest incurred on gas inventory financing is
     recovered through the cost of gas adjustment clause.

<PAGE>

7.   Long-Term Debt
     --------------

     On May 20, 2002,  pursuant to a put option  exercised  by the holders,  the
     Company  repaid $15 million for the 6.81% Series A First  Mortgage  Secured
     Medium Term Notes,  dated May 19, 1997 that had a maturity  date of May 19,
     2027.  The  Notes  were  repaid  at par  and  there  was no  gain  or  loss
     recognized.  The Company  borrowed the amount  needed to redeem these Notes
     through the utility money pool.

8.   Regulation
     ----------

     On  November  1,  2001,  the  Department  issued  an  order  requiring  all
     Massachusetts  electric and gas utilities to develop  service quality plans
     effective  January 1, 2002.  On April 17, 2002,  the  Department  issued an
     order approving the Company's  service quality plan that was filed with the
     Department on March 1, 2002.  Service  quality will be tracked and measured
     against historical benchmarks.  The Department may assess a penalty against
     a company that fails to meet its service  quality  benchmarks.  The penalty
     amount  can  be up  to 2% of  the  company's  distribution  revenues.  Each
     measurement  period will be a calendar year. The first  measurement  period
     began on January 1, 2002.

9.   Derivatives
     -----------

     On April 1, 2002 the Company adopted  Implementation  Issue C16 of SFAS No.
     133,  "Accounting  for Derivative  Instruments  and Hedging  Activities" as
     amended  and  interpreted  incorporating  SFAS  137  and  138  and  certain
     implementation  issues (collectively "SFAS 133"). Issue C16 establishes new
     criteria  that must be  satisfied  in order for  contracts  that  combine a
     forward  contract and a purchased  option contract to be exempted as normal
     purchases and sales.

     Based upon a review of our physical gas purchase commodity  contracts,  the
     Company  determined  that  certain  contracts  can no longer be exempted as
     normal  purchases  from the  requirements  of SFAS 133.  As a  result,  and
     effective  April 1, 2002, such contracts are required to be recorded on the
     Balance Sheet at fair value and had a calculated fair value at that date of
     $0.1 million.  At June 30, 2002, the fair value of these contracts was $0.1
     million.  All gas and related  transportation costs are currently recovered
     from customers through the gas adjustment clause. Therefore, changes in the
     market value of these contracts will be recorded as an accounts  receivable
     or accounts payable on the Balance Sheet.




<PAGE>


     ITEM 2  MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION  AND
     RESULTS OF OPERATIONS:
     ---------------------------------------------------------------------------


     RESULTS OF OPERATIONS


     Net Income for the six months  ended  June 30,  2002 was $9.0  million,  an
     increase of $2.3 million over the  corresponding  period in the prior year.
     This  increase  is  primarily  due  to  the   discontinuance   of  goodwill
     amortization  offset,  in part, by a decline in operating margin and income
     taxes.

     Operating  revenues for the  six-month  period ended June 30, 2002 declined
     $47  million,  or 28.6%,  from the six month  period  ended June 30,  2001.
     Approximately 91% of this decline was due to a significant  decrease in the
     cost  of gas  sold to  customers.  Cost of gas  sold to  customers  for the
     six-month  period ended June 30, 2002 decreased  $42.6  million,  or 39.5%,
     from 2001. This decline was due to both a decrease in throughput of 16% and
     a  decline  in  the  average  commodity  price  of gas  of  26%.  Decreased
     throughput was due to significantly warmer weather (10.7%).

     Variations  in gas costs have little or no impact on  operating  results as
     the current gas rate structure includes a gas adjustment  clause,  pursuant
     to which any  difference  between  actual gas costs  incurred and gas costs
     billed  to  customers  are  deferred  and  refunded  to or  collected  from
     customers in a subsequent period.

     Operating  margin (revenues less cost of gas sold) for the six-month period
     ended June 30, 2002  decreased  $4.4 million,  or 7.8%,  from the six-month
     period ended June 30, 2001. The decline was primarily ($5.4 million) driven
     by warmer  weather,  offset,  in part,  by an  increase  of $1  million  in
     increased sales due to customer growth.

     In  accordance  with SFAS 142,  as of January 1,  2002,  the  Company is no
     longer amortizing  goodwill.  For the six-month period ended June 30, 2001,
     amortization of goodwill was $4.7 million.

     Income tax expense for the six-month  period ended June 30, 2002  decreased
     approximately  $1.6 million,  or 22%, from 2001.  The decrease is primarily
     attributable  to  lower  pre-tax  earnings  before  goodwill   amortization
     expense.


     LIQUIDITY AND CAPITAL RESOURCES

     The  Company  believes  that  projected  cash  flow  from  operations,   in
     combination  with  currently  available  resources  (i.e.  borrowings  from
     KeySpan), is sufficient to meet 2002 capital expenditures,  working capital
     requirements and normal debt repayments.

     On March 31,  2002,  the  Company  received  an  additional  advance of $14
     million  from  KeySpan.  The  Company  paid a  dividend  to  KeySpan of $14
     million.

     On May 20,  2002,  the Company  repaid $15  million for the 6.81%  Series A
     First  Mortgage  Secured  Medium Term  Notes.  The  Company  financed  this
     repayment by borrowing from the money pool. For further details, see Note 7
     to the Financial Statements "Long-Term Debt".

<PAGE>

     The Company expects capital  expenditures for 2002 to be approximately  $31
     million.  Actual capital  expenditures for the six-month period ending June
     30, 2002 were $12.3 million.  Capital  expenditures  are largely for system
     expansion   associated  with  customer  growth  and   improvements  to  the
     distribution infrastructure.


     FORWARD-LOOKING INFORMATION

     Certain  statements  contained in this Form 10-Q  concerning  expectations,
     beliefs, plans, objectives, goals, strategies, future events or performance
     and  underlying  assumptions  and  other  statements  that are  other  than
     statements of historical facts, are "forward-looking statements" within the
     meaning of Section 21E of the Securities  Exchange Act of 1934, as amended.
     Without  limiting  the  foregoing,  all  statements  relating to our future
     outlook,   anticipated   capital   expenditures,   future  cash  flows  and
     borrowings,  pursuit of  potential  future  acquisition  opportunities  and
     sources of funding,  are forward-looking  statements.  Such forward-looking
     statements  reflect numerous  assumptions and involve a number of risks and
     uncertainties and actual results may differ materially from those discussed
     in such  statements.  Among the factors that could cause actual  results to
     differ   materially  are:  general  economic   conditions,   especially  in
     Massachusetts;  available  sources  and cost of  fuel;  federal  and  state
     regulatory  initiatives  that  increase  competition,   threaten  cost  and
     investment recovery, and impact rate structures; the ability of the Company
     to successfully reduce its cost structure; inflationary trends and interest
     rates;  and other  risks  detailed  from time to time in other  reports and
     other  documents  filed  by the  Company  with  the  SEC.  For any of these
     statements,  the  Company  claims  the  protection  of the safe  harbor for
     forward-looking  information contained in the Private Securities Litigation
     Reform Act of 1995, as amended.



<PAGE>



                           PART II. OTHER INFORMATION
                           --------------------------


ITEM 1.  LEGAL PROCEEDINGS
--------------------------

None


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

(a)      List of Exhibits

     99.1*  Certification  pursuant to 18 U.S.C.  1350,  as adopted  pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002.

     99.2*  Certification  pursuant to 18 U.S.C.  1350,  as adopted  pursuant to
     Section 906 of the Sarbanes-Oxley Act of 2002.

     *Filed Herewith

(b)      Reports on Form 8-K

     In our Report on Form 8-K,  dated April 5, 2002, we disclosed that on March
     29,  2002,  our  Board  of  Directors,  upon  recommendation  of the  Audit
     Committee, determined not to renew the engagement of Arthur Andersen LLP as
     independent  public  accountants and appointed Deloitte & Touche LLP as our
     independent public accountants.





<PAGE>



                                   SIGNATURES



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











                              Colonial Gas Company
                    D/B/A KEYSPAN ENERGY DELIVERY NEW ENGLAND
   --------------------------------------------------------------------------
                                  (Registrant)




                                    /s/Joseph F. Bodanza
                                  ----------------------------------------------
                                    J.F. Bodanza, Senior Vice President
                                    Finance, Accounting and Regulatory Affairs
                                    (Principal Financial and Accounting Officer)





Dated: August 14, 2002