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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q
(Mark One)
[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
                                                        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 1-7320



                              ANR PIPELINE COMPANY
             (Exact name of registrant as specified in its charter)



            Delaware                                    38-1281775
(State or other jurisdiction of
incorporation or organization)             (I.R.S. Employer Identification No.)



         500 Renaissance Center
            Detroit, Michigan                           48243-1902
(Address of principal executive offices)                (Zip Code)



       Registrant's telephone number, including area code: (313) 496-0200



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





     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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____

     As of October 30, 1998, there were outstanding 1,000 shares of common stock
of the Registrant, $100 par value per share, its only class of common stock.
None of the voting stock of the Registrant is held by nonaffiliates.



<PAGE>



                                     PART I

                              FINANCIAL INFORMATION

Item 1.     Financial Statements.

      The financial statements of ANR Pipeline Company and its subsidiaries (the
"Company" or "ANR Pipeline") are presented herein and are unaudited, except for
balances as of December 31, 1997, and therefore are subject to year-end
adjustments; however, all adjustments which are, in the opinion of management,
necessary for a fair statement of the results of operations for the periods
covered have been made. The adjustments which have been made are of a normal
recurring nature. Such results are not necessarily indicative of results to be
expected for the year due to seasonal variations and market conditions affecting
natural gas deliveries.



<TABLE>
                      ANR PIPELINE COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                              (Millions of Dollars)


<CAPTION>
                                                                                 September 30,      December 31,
                                     ASSETS                                         1998                1997     
                                                                               ---------------     --------------
                                                                                  (Unaudited)

Current Assets:
<S>                                                                               <C>                <C>        
   Cash and cash equivalents...............................................       $       3.6        $       5.2
   Notes receivable from related party.....................................             200.0              265.9
   Accounts receivable:
      Others...............................................................               6.7               35.9
      Related parties......................................................              13.0               14.7
   Materials and supplies, at average cost.................................              28.1               28.3
   Current deferred income taxes...........................................              17.4               77.3
                                                                                  -----------        -----------
                                                                                        268.8              427.3
                                                                                  -----------        -----------

Property, Plant and Equipment, at cost.....................................           3,422.4            3,372.9
   Less - Accumulated depreciation.........................................           2,152.0            2,125.6
                                                                                  -----------        -----------
                                                                                      1,270.4            1,247.3
                                                                                  -----------        -----------

Other Assets:
   Investment in related parties:
      Pipeline partnerships................................................              51.1               46.3
      Other................................................................              74.1               74.1
   Deferred charges and other..............................................              44.0               21.4
                                                                                  -----------        -----------
                                                                                        169.2              141.8
                                                                                  -----------        -----------

                                                                                  $   1,708.4        $   1,816.4
                                                                                  ===========        ===========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                     - 1 -

<PAGE>


<TABLE>

                      ANR PIPELINE COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                              (Millions of Dollars)


<CAPTION>
                                                                                 September 30,      December 31,
                      STOCKHOLDER'S EQUITY AND LIABILITIES                          1998                1997     
                                                                               ---------------     --------------
                                                                                  (Unaudited)
<S>                                                                               <C>                <C>        
Current Liabilities:
   Accounts payable:
      Others...............................................................       $      77.4        $      74.1
      Related parties......................................................               7.7                9.9
   Taxes on income.........................................................              25.9               37.2
   Other taxes.............................................................              25.4               24.1
   Provision for regulatory matters........................................                 -              180.6
   Other...................................................................              55.4               22.9
                                                                                  -----------        -----------
                                                                                        191.8              348.8
                                                                                  -----------        -----------

Long-Term Debt ............................................................             497.9              497.9
                                                                                  -----------        -----------

Deferred Credits and Other:
   Accumulated deferred income taxes.......................................             164.8              163.5
   Other deferred credits:
      Others...............................................................             110.2              119.2
      Related parties......................................................              24.9               27.0
                                                                                  -----------        -----------
                                                                                        299.9              309.7
                                                                                  -----------        -----------

Common Stock and Other Stockholder's Equity:
   Common stock, $100 par value, authorized, issued  and outstanding
      1,000 shares.........................................................                .1                 .1
   Additional paid-in capital..............................................             466.2              466.2
   Retained earnings.......................................................             252.5              193.7
                                                                                  -----------        -----------
                                                                                        718.8              660.0
                                                                                  -----------        -----------

                                                                                  $   1,708.4        $   1,816.4
                                                                                  ===========        ===========
</TABLE>





                 See Notes to Consolidated Financial Statements.


                                      - 2 -

<PAGE>


<TABLE>

                      ANR PIPELINE COMPANY AND SUBSIDIARIES
                       STATEMENT OF CONSOLIDATED EARNINGS
                              (Millions of Dollars)


<CAPTION>
                                                                     Three Months Ended        Nine Months Ended
                                                                        September 30,            September 30,   
                                                                   ----------------------   ---------------------
                                                                      1998        1997        1998         1997  
                                                                   ----------  ----------   ---------   ---------
                                                                         (Unaudited)              (Unaudited)

<S>                                                                <C>         <C>          <C>         <C>      
Revenues:
   Storage and transportation:
      Others....................................................   $    125.7  $    140.7   $   464.4   $   473.4
      Related parties...........................................           .6         1.4         4.5        10.4
   Other revenues:
      Others....................................................         38.9         6.0        87.5        15.5
      Related parties...........................................          7.5        15.0        23.6        49.4
                                                                   ----------  ----------   ---------   ---------
                                                                        172.7       163.1       580.0       548.7
                                                                   ----------  ----------   ---------   ---------

Costs and Expenses:
   Operation and maintenance:
      Others....................................................         68.5        71.5       219.4       210.1
      Related parties...........................................         17.8        16.1        52.2        61.1
   Depreciation and amortization................................          9.2        13.7        27.0        41.1
   Interest expense.............................................         11.6        15.7        35.1        47.3
   Taxes on income..............................................         24.5        17.3        77.5        70.3
                                                                   ----------  ----------   ---------   ---------
                                                                        131.6       134.3       411.2       429.9
                                                                   ----------  ----------   ---------   ---------

Net Earnings....................................................   $     41.1  $     28.8   $   168.8   $   118.8
                                                                   ==========  ==========   =========   =========
</TABLE>




                 See Notes to Consolidated Financial Statements.


                                      - 3 -

<PAGE>



<TABLE>
                      ANR PIPELINE COMPANY AND SUBSIDIARIES
                      STATEMENT OF CONSOLIDATED CASH FLOWS
                              (Millions of Dollars)


<CAPTION>
                                                                                        Nine Months Ended
                                                                                          September 30,     
                                                                                   -------------------------
                                                                                      1998            1997  
                                                                                   ---------        --------
                                                                                           (Unaudited)

<S>                                                                                <C>              <C>     
Cash Flows from Operating Activities:
   Net earnings................................................................    $   168.8        $  118.8
   Adjustments to reconcile net earnings to net cash provided by
      operating activities:
         Depreciation and amortization.........................................         27.2            43.2
         Net (increase) decrease in working capital:
           Others..............................................................    (   123.9)           50.9
           Related parties.....................................................    (      .5)       (    1.6)
         Net change in other assets/liabilities................................         24.0        (    9.6)
                                                                                   ---------        --------
           Total adjustments...................................................    (    73.2)           82.9
                                                                                   ---------        --------

         Net cash provided by operating activities.............................         95.6           201.7
                                                                                   ---------        --------

Cash Flows from Investing Activities:
   Decrease (increase) in note receivable from:
      Others...................................................................            -            18.5
      Related party............................................................         65.9        (  170.7)
   Capital expenditures........................................................    (    53.1)       (   80.3)
                                                                                   ---------        --------

         Net cash provided by (used in) investing activities...................         12.8        (  232.5)
                                                                                   ---------        --------

Cash Flows from Financing Activities:
   Dividend paid...............................................................    (   110.0)              -
                                                                                   ---------        --------

         Net cash used in financing activities.................................    (   110.0)              -
                                                                                   ---------        --------

Decrease in Cash and Cash Equivalents..........................................    (     1.6)       (   30.8)

Cash and Cash Equivalents at Beginning of Period...............................          5.2            34.2
                                                                                   ---------        --------

Cash and Cash Equivalents at End of Period.....................................    $     3.6        $    3.4
                                                                                   =========        ========
</TABLE>




                 See Notes to Consolidated Financial Statements.


                                      - 4 -

<PAGE>



                      ANR PIPELINE COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.    Summary of Significant Accounting Policies

      For additional information relative to operations and financial position,
reference is made to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1997. Certain reclassifications of prior period
statements have been made to conform with current reporting practices. The
effect of the reclassifications was not material to the Company's consolidated
financial position, results of operations or cash flows. Effective October 1,
1997, the depreciation rates associated with certain of the Company's assets
were revised, which had the effect of increasing net earnings by $3.7 million
and $11.1 million for the three- and nine-month periods ended September 30,
1998, respectively.

      The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income," in 1998. The application of the new standard
did not have a material effect on the Company's consolidated financial
statements as the Company currently does not have any material items of other
comprehensive income.

      The Company adopted Statement of Financial Accounting Standards No. 132,
"Employers' Disclosures about Pensions and Other Postretirement Benefits" ("FAS
132"), in 1998. FAS 132, which revises employer disclosures regarding pension
plans and other postretirement plans, is not expected to have a material effect
on the Company's consolidated financial statements.

      The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("FAS 133"), to be effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. FAS 133 requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The accounting for changes
in the fair value of a derivative will depend on the intended use of the
derivative and the resulting designation. The Company is currently evaluating
the impact, if any, of FAS 133.

      The Accounting Standards Executive Committee of the American Institute of
Certified Public Accountants ("AICPA") has issued Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use" ("SOP 98-1"), to be effective for periods beginning after December
15, 1998. The Company adopted SOP 98-1 in 1998. SOP 98-1 establishes standards
for the treatment of costs associated with software developed or obtained for
internal use. SOP 98-1 is not expected to have a material effect on the
Company's consolidated financial statements.

      The AICPA has issued Statement of Position 98-5, "Reporting on the Costs
of Start-Up Activities" ("SOP 98-5"), to be effective for periods beginning
after December 15, 1998. SOP 98-5 provides guidance on accounting for costs
incurred to open new facilities, conduct business in new territories or
otherwise commence some new operation. The application of SOP 98-5 is not
expected to have a material effect on the Company's consolidated financial
statements.

      Supplemental information relative to the Statement of Consolidated Cash
Flows includes the following: The Company made cash payments for interest, net
of interest capitalized, of $43.3 million and $31.3 million for the nine-month
periods ended September 30, 1998 and 1997, respectively. Cash payments for
income taxes amounted to $45.6 million and $75.2 million for the nine-month
periods ended September 30, 1998 and 1997, respectively.



                                      - 5 -

<PAGE>



2.    Income Taxes

      Provisions for income taxes were as follows (millions of dollars):

<TABLE>
<CAPTION>
                                                                    Three Months Ended       Nine Months Ended
                                                                       September 30,           September 30,   
                                                                   --------------------     -------------------
                                                                     1998         1997        1998        1997
                                                                   --------     -------     -------     -------
                                                                         (Unaudited)              (Unaudited)

<S>                                                                <C>          <C>         <C>         <C>    
      Federal Income Taxes:
         Currently payable....................................     $    7.5     $  13.9     $  28.1     $  64.5
         Deferred.............................................         15.0         1.6        40.4     (   1.0)
                                                                   --------     -------     -------     -------
                                                                       22.5        15.5        68.5        63.5
      State and City Income Taxes.............................          2.0         1.8         9.0         6.8
                                                                   --------     -------     -------     -------
                                                                   $   24.5     $  17.3     $  77.5     $  70.3
                                                                   ========     =======     =======     =======
</TABLE>

3.    Common Stock

      All of the issued and outstanding common stock of the Company is owned by
American Natural Resources Company, a wholly owned subsidiary of Coastal Natural
Gas Company. Coastal Natural Gas Company is a wholly owned subsidiary of The
Coastal Corporation ("Coastal"). Therefore, earnings and cash dividends per
common share have no significance and are not presented.

4.    Litigation, Environmental and Regulatory Matters

      Litigation Matters

      In October 1996, Coastal, along with certain of its affiliates, including
ANR Pipeline, was named as a defendant in a suit filed by several former and
current African American employees in the United States District Court, Southern
District of Texas. The suit alleges racially discriminatory employment policies
and practices and seeks damages in the amount of at least $100 million and
punitive damages of at least three times that amount. Plaintiffs' counsel are
seeking to have the suit certified as a class action. Coastal and its affiliates
vigorously deny these allegations and have filed responsive pleadings. In
January 1998, the plaintiffs amended their suit to exclude ANR Pipeline
employees from the potential class. A new suit was then filed in state court in
Wayne County, Michigan, seeking to have the Michigan suit certified as a class
action of African American employees of ANR Pipeline and seeking unspecified
damages as well as attorneys and expert fees. The Company has filed responsive
pleadings denying these allegations.

      In 1996, Jack Grynberg filed a claim under the False Claims Act on behalf
of the U.S. government in the U.S. District Court, District of Columbia, against
70 defendants, including ANR Pipeline and another subsidiary of Coastal. The
suit sought damages for the alleged underpayment of royalties due to the
purported improper measurement of gas. The 1996 suit was dismissed in March 1997
and the dismissal was affirmed by the D.C. Court of Appeals in October 1998. In
September 1997, Mr. Grynberg filed 77 separate, similar False Claims Act suits
against natural gas transmission companies and producers, gatherers, and
processors of natural gas, seeking unspecified damages. ANR Pipeline, Coastal
and several other Coastal subsidiaries have been included in two of the
September 1997 suits. The suits were filed in the U.S. District Court, District
of Colorado and the U.S. District Court, Eastern District of Michigan.

      Numerous other lawsuits and other proceedings which have arisen in the
ordinary course of business are pending or threatened against the Company or its
subsidiaries. Although no assurances can be given and no determination can be
made at this time as to the outcome of any particular lawsuit or proceeding, the
Company believes there are meritorious defenses to substantially all such claims
and that any liability which may finally be determined should not have a
material adverse effect on the Company's consolidated financial position or
results of operations.



                                      - 6 -

<PAGE>



      Environmental Matters

      The Company's operations are subject to extensive and evolving federal,
state and local environmental laws and regulations which may affect such
operations and costs as a result of their effect on the construction, operation
and maintenance of its pipeline facilities. The Company anticipates annual
capital expenditures of approximately $3 to $5 million per year over the next
several years aimed at maintaining compliance with such laws and regulations.
Additionally, appropriate governmental authorities may enforce the laws and
regulations with a variety of civil and criminal enforcement measures, including
monetary penalties and remediation requirements.

      The Comprehensive Environmental Response, Compensation and Liability Act,
also known as Superfund, as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company has been named as a potentially responsible party in
three Superfund waste disposal sites. At these sites, there is sufficient
information to estimate total cleanup costs of approximately $42 million and the
Company estimates its pro-rata exposure, to be paid over a period of several
years, is approximately $0.4 million.

      In Michigan, where the Company has extensive operations, the Environmental
Response Act requires individuals (including corporations) who have caused
contamination to remediate the contamination to regulatory standards. Owners or
operators of contaminated property who did not cause the contamination are not
required to remediate the contamination, but must exercise due care in their use
of the property so that the contamination is not exacerbated and the property
does not pose a threat to human health. ANR Pipeline estimates that its costs to
comply with the Michigan regulations will be approximately $12 million, which
will be expended over a period of two to ten years and for which appropriate
provisions have been made.

      Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several liability,
and believes that compliance with all applicable laws and regulations will not
have a material adverse impact on the Company's consolidated financial position
or results of operations.

      Regulatory Matters

      On July 29, 1998, the Federal Energy Regulatory Commission ("FERC") issued
a "Notice of Proposed Rulemaking," in which the FERC has proposed a number of
further significant changes to the industry, including, among other things,
removal of price caps in the short-term market (less than one year), capacity
auctions, changed reporting obligations, the ability to negotiate terms and
conditions of all service, elimination of the requirement of a matching term cap
on the renewal of existing contracts and a review of its policies for approving
capacity construction. On the same day, the FERC also issued a "Notice of
Inquiry" soliciting industry input on various matters affecting the pricing of
long-term service and certificate pricing in light of changing market
conditions. The due date for comments on both of these matters has been
rescheduled from November 9, 1998, to January 22, 1999.

      Certain regulatory issues remain unresolved among the Company, its
customers, its suppliers and the FERC. The Company has made provisions which
represent management's assessment of the ultimate resolution of these issues. As
a result, the Company anticipates that these regulatory matters will not have a
material adverse effect on its consolidated financial position or results of
operations. While the Company estimates the provisions to be adequate to cover
potential adverse rulings on these and other issues, it cannot estimate when
each of these issues will be resolved.



                                      - 7 -

<PAGE>



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

      This report, including Management's Discussion and Analysis of Financial
Condition and Results of Operations, includes certain forward-looking statements
reflecting the Company's expectations and objectives in the near future;
however, many factors which may affect the actual results, including natural gas
prices, market and economic conditions, industry competition and changing
regulations, are difficult to predict. Accordingly, there is no assurance that
the Company's expectations and objectives will be realized. The forward-looking
statements contained herein are intended to qualify for the safe harbor
provisions of Section 21E of the Securities Exchange Act of 1934.

      The Notes to Consolidated Financial Statements contain information that is
pertinent to the following analysis.

                         Liquidity and Capital Resources

      General. Management believes that the Company's stable financial position
and earnings ability will enable it to continue to generate and obtain capital
for financing needs in the foreseeable future.

      The Financial Accounting Standards Board has issued FAS 133, to be
effective for all fiscal quarters of fiscal years beginning after June 15, 1999.
FAS 133 requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative will
depend on the intended use of the derivative and the resulting designation. The
Company is currently evaluating the impact, if any, of FAS 133.

      The AICPA has issued SOP 98-5, to be effective for periods beginning after
December 15, 1998. SOP 98-5 provides guidance on accounting for costs incurred
to open new facilities, conduct business in new territories or otherwise
commence some new operation. The application of SOP 98-5 is not expected to have
a material effect on the Company's consolidated financial statements.

      Year 2000 Issue. ANR Pipeline, like most other companies, is addressing
the Year 2000 issue. This issue is the result of computer programs written with
two digits rather than four to define the applicable year. Computer programs
that have date-sensitive software using two digits to define the applicable year
may recognize a date using "00" as the year 1900 instead of the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.

      The Company's Year 2000 compliance project relates to both information
technology and embedded systems throughout the Company and focuses on all
technology hardware and software, external interfaces with customers and
suppliers, operations process control, automation and instrumentation systems.
Systems are being reviewed in an order of priority that includes an assessment
of the potential adverse effects of noncompliance as well as an assessment of
the complexity of the system. Assessment has been completed for all material
systems and is expected to be completed for all systems by the end of 1998. It
will be necessary to modify or replace certain noncompliant software and
hardware so that they will properly utilize dates beyond December 31, 1999. The
Company believes that with such remediation, the Year 2000 issue can be
mitigated. Necessary remediation and testing activities have begun and are
planned to be completed for all material systems by mid-1999. Remaining systems
modifications, replacement and testing are planned to be completed before the
end of 1999.

      The Company has also begun a formal communications process with outside
entities with which the Company conducts business to determine the extent to
which those companies are addressing their Year 2000 compliance. In connection
with this process, the Company has been sending letters and questionnaires to
these parties and is evaluating the responses as received and is following up
with those parties that have not responded. The Company does not expect any
single noncompliant third party to have a material effect on the Company as it
does not rely to a material extent on any single customer or supplier, including
telecommunications providers, utilities and banks. However, the Company does not
control these parties and there can be no assurance that third-party systems
will be timely converted, or that any failure to convert would not have an
adverse effect on the Company's systems. The Company will continue to cooperate
and communicate with these parties to mitigate potential adverse effects.



                                      - 8 -

<PAGE>



      The Company is currently preparing and will periodically update a Year
2000 contingency plan. The primary goals of the plan are to maintain continuity
of operations, timely resume any operations that have been interrupted, preserve
Company assets and protect the environment. The Company's geographical
distribution and customer base diversity are expected to naturally reduce the
risk of major disruptions to operations due to any Year 2000-related occurrence.
Similarly, the Company's distributed information systems and wide scope of
relationships with financial institutions, suppliers and vendors will most
likely aid in limiting and localizing any individual Year 2000 failure to
specific operations or facilities. Also, in recent years, the Company has
replaced or updated a significant portion of its computer hardware and software.
The plan will include possible manual intervention to operate noncompliant
facilities or systems until they can be modified or replaced. Notwithstanding
the foregoing, due to the nature of contingency planning, there can be no
assurance that such plans will acceptably mitigate the risk of material impact
to the Company's operations due to any Year 2000-related incident.

      The Company has been using both external and internal resources to
reprogram or replace its software and embedded systems for the Year 2000 issue.
While the Company has included the Year 2000 project in its overall information
systems planning process since 1996, certain systems were identified for
replacement prior to the organization of the Year 2000 project. These amounts
are not included in the Year 2000 project cost estimates, except where the
replacement date has been accelerated in order to address Year 2000 issues. To
date, the amounts incurred and expensed for developing and carrying out the plan
total approximately $2 million. The total remaining cost for addressing the Year
2000 issue, which will be funded through operating cash flows, is currently
estimated by management to be approximately $1 million.

      It should be noted that the ultimate amount of Year 2000 costs is
difficult to estimate due to possible disruptions in business arising from Year
2000 noncompliance of vendors, suppliers, customers and other third parties over
whom the Company has no control. Notwithstanding the Company's efforts,
disruptions could occur in its business due to Year 2000 problems and such
disruptions could have an adverse effect.

      Environmental. The Company's operations are subject to extensive and
evolving federal, state and local environmental laws and regulations which may
affect such operations and costs as a result of their effect on the
construction, operation and maintenance of its pipeline facilities. The Company
anticipates annual capital expenditures of approximately $3 to $5 million per
year over the next several years aimed at maintaining compliance with such laws
and regulations. Additionally, appropriate governmental authorities may enforce
the laws and regulations with a variety of civil and criminal enforcement
measures, including monetary penalties and remediation requirements.

      The Comprehensive Environmental Response, Compensation and Liability Act,
also known as Superfund, as reauthorized, imposes liability, without regard to
fault or the legality of the original act, for disposal of a "hazardous
substance." The Company has been named as a potentially responsible party in
three Superfund waste disposal sites. At these sites, there is sufficient
information to estimate total cleanup costs of approximately $42 million and the
Company estimates its pro-rata exposure, to be paid over a period of several
years, is approximately $0.4 million.

      In Michigan, where the Company has extensive operations, the Environmental
Response Act requires individuals (including corporations) who have caused
contamination to remediate the contamination to regulatory standards. Owners or
operators of contaminated property who did not cause the contamination are not
required to remediate the contamination, but must exercise due care in their use
of the property so that the contamination is not exacerbated and the property
does not pose a threat to human health. ANR Pipeline estimates that its costs to
comply with the Michigan regulations will be approximately $12 million, which
will be expended over a period of two to ten years and for which appropriate
provisions have been made.

      Future information and developments will require the Company to
continually reassess the expected impact of these environmental matters.
However, the Company has evaluated its total environmental exposure based on
currently available data, including its potential joint and several liability,
and believes that compliance with all applicable laws and regulations will not
have a material adverse impact on the Company's consolidated financial position
or results of operations.



                                      - 9 -

<PAGE>



                              Results of Operations

      The change in the Company's earnings for the three- and nine-month periods
ended September 30, 1998 in comparison to the corresponding periods in 1997 is a
result of the following:

      Revenues. Storage and transportation revenues decreased for the three- and
nine-month periods ended September 30, 1998 as compared to the same periods in
1997 by $15.8 million and $14.9 million, respectively. The primary factors
contributing to the decrease in revenues for the three- and nine-month periods
were a) lower revenues of $9.4 million and $25.2 million, respectively,
resulting from warmer than normal weather and continued intensified competition
across the United States natural gas industry, b) a decrease in surcharge and
other revenue adjustments of $4.3 million and $18.3 million, respectively and c)
reduced pass-through recoveries of $5.4 million in the first half of 1998, which
are offset in operation and maintenance. The above decreases for the nine-month
period were offset by net adjustments to provisions for rate related
contingencies of $38.7 million recorded in the first quarter of 1998, as a
result of the Company's rate case settlement which became effective March 16,
1998.

      Other revenues increased for the three- and nine-month periods ended
September 30, 1998 as compared to the same periods in 1997 by $25.4 million and
$46.2 million, respectively. The increase for the three-month period is
primarily due to proceeds received from the termination of gas transportation
contracts. The increase in the nine-month period was primarily due to the
contract terminations previously discussed and recognition of gain on the sale
of certain assets.

      Operation and Maintenance. Operation and maintenance expenses decreased by
$1.3 million for the three-month period ended September 30, 1998 and increased
by $0.4 million for the nine-month period ended September 30, 1998 as compared
to the same periods in 1997. The increase for the nine-month period was
primarily the result of nonrecurring charges of $13.2 million, largely due to a
provision recorded in the first quarter of 1998 for environmental regulatory
compliance, offset by lower gas purchase costs of $7.4 million and reduced third
party transportation charges of $5.4 million.

      Depreciation and Amortization. Depreciation expense decreased for the
three- and nine-month periods ended September 30, 1998 as compared to the same
periods in 1997 by $4.5 million and $14.1 million, respectively. The decreases
were primarily due to a revision of depreciation rates as discussed in Note 1 of
Notes to Consolidated Financial Statements.

      Interest Expense. Interest expense decreased for the three- and nine-month
periods ended September 30, 1998 as compared to the same periods in 1997 by $4.1
million and $12.2 million, respectively. The decreases were primarily due to
reduced interest expense associated with provisions for regulatory matters.

      Taxes on Income. Taxes on income increased for the three- and nine-month
periods ended September 30, 1998 as compared to the same periods in 1997
primarily due to increased pre-tax income. The increase in the nine-month period
was offset by an adjustment to accumulated deferred income taxes.




                                     - 10 -

<PAGE>



                                     PART II

                                OTHER INFORMATION


Item 1.     Legal Proceedings.

            The information required hereunder is incorporated by reference into
Part II of this Report from Note 4 of Notes to Consolidated Financial Statements
set forth in Part I of this Report and from Item 2., "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Environmental
Matters," set forth in Part I of this Report.

Item 2.     Changes in Securities.

            None.

Item 3.     Defaults Upon Senior Securities.

            None.

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

            None.

Item 5.     Other Information.

            None.

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

            (a) Exhibits.

                (27)  Financial Data Schedule.

            (b) Reports on Form 8-K.

                No reports on Form 8-K were filed during the quarter ended
September 30, 1998.


                                   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.

                                                ANR PIPELINE COMPANY
                                                    (Registrant)

Date:  November 12, 1998                 By:       WILLIAM L. JOHNSON
                                             -----------------------------
                                                   William L. Johnson
                                                  Senior Vice President
                                            and Principal Accounting Officer
                                               (As Authorized Officer and
                                                Chief Accounting Officer)


                                     - 11 -

<PAGE>



                                INDEX TO EXHIBITS


Exhibit
Number                    Description
------------------------------------------------------------------------------
  27                Financial Data Schedule




                                     - 12 -