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

                       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 June 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                         (I.R.S. Employer
     incorporation or organization)                        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 July 31, 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.



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

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

<S>                                                                                 <C>              <C>
Current Assets:
   Cash and cash equivalents...............................................         $      6.4       $      5.2
   Notes receivable from related party.....................................              195.2            265.9
   Accounts receivable:
      Others...............................................................                9.4             35.9
      Related parties......................................................               18.1             14.7
   Materials and supplies, at average cost.................................               28.0             28.3
   Current deferred income taxes...........................................               27.0             77.3
                                                                                    ----------       ----------
                                                                                         284.1            427.3
                                                                                    ----------       ----------

Property, Plant and Equipment, at cost.....................................            3,406.7          3,372.9
   Less - Accumulated depreciation.........................................            2,143.5          2,125.6
                                                                                    ----------       ----------
                                                                                       1,263.2          1,247.3
                                                                                    ----------       ----------

Other Assets:
   Investment in related parties:
      Pipeline partnerships................................................               48.3             46.3
      Other................................................................               74.1             74.1
   Deferred charges and other..............................................               34.1             21.4
                                                                                    ----------       ----------
                                                                                         156.5            141.8
                                                                                    ----------       ----------

                                                                                    $  1,703.8       $  1,816.4
                                                                                    ==========       ==========
</TABLE>

                 See Notes to Consolidated Financial Statements.


                                      - 1 -

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                   June 30,         December 31,
                      LIABILITIES AND STOCKHOLDER'S EQUITY                           1998               1997
                                                                                 -------------      ------------
                                                                                  (Unaudited)

<S>                                                                               <C>                <C>      
Current Liabilities:
   Accounts payable:
      Others...............................................................       $   101.6          $    74.1
      Related parties......................................................             8.0                9.9
   Taxes on income.........................................................            17.6               37.2
   Other taxes.............................................................            24.1               24.1
   Provision for regulatory and other matters..............................               -              180.6
   Other...................................................................            47.0               22.9
                                                                                  ---------          ---------
                                                                                      198.3              348.8
                                                                                  ---------          ---------

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

Deferred Credits and Other:
   Accumulated deferred income taxes.......................................           157.8              163.5
   Other deferred credits:
      Others...............................................................           116.5              119.2
      Related parties......................................................            25.6               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.......................................................           241.4              193.7
                                                                                  ---------          ---------
                                                                                      707.7              660.0
                                                                                  ---------          ---------

                                                                                  $ 1,703.8          $ 1,816.4
                                                                                  =========          =========
</TABLE>



                 See Notes to Consolidated Financial Statements.


                                      - 2 -

<PAGE>

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

<TABLE>
<CAPTION>
                                                                     Three Months Ended        Six Months Ended
                                                                          June 30,                 June 30,
                                                                   ----------------------   ---------------------
                                                                      1998        1997        1998         1997
                                                                   ----------  ----------   ---------   ---------
                                                                         (Unaudited)              (Unaudited)

<S>                                                                <C>         <C>          <C>         <C>      
Revenues:
   Storage and transportation:
      Others....................................................   $    132.0  $    142.4   $   338.7   $   330.9
      Related parties...........................................          1.5         4.7         3.9        10.8
   Other revenues:
      Others....................................................         26.1         4.8        48.6         9.5
      Related parties...........................................          6.8        14.4        16.1        34.4
                                                                   ----------  ----------   ---------   ---------
                                                                        166.4       166.3       407.3       385.6
                                                                   ----------  ----------   ---------   ---------

Costs and Expenses:
   Operation and maintenance:
      Others....................................................         68.2        62.7       150.9       132.7
      Related parties...........................................         18.5        26.2        34.4        51.0
   Depreciation and amortization................................          9.0        14.1        17.8        27.4
   Interest expense.............................................         10.1        15.7        23.5        31.5
   Taxes on income..............................................         22.8        17.5        53.0        53.0
                                                                   ----------  ----------   ---------   ---------
                                                                        128.6       136.2       279.6       295.6
                                                                   ----------  ----------   ---------   ---------

Net Earnings....................................................   $     37.8  $     30.1   $   127.7   $    90.0
                                                                   ==========  ==========   =========   =========
</TABLE>


                 See Notes to Consolidated Financial Statements.


                                      - 3 -

<PAGE>

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

<TABLE>
<CAPTION>
                                                                                        Six Months Ended
                                                                                            June 30,
                                                                                   -------------------------
                                                                                      1998            1997
                                                                                   ---------        --------
                                                                                           (Unaudited)

<S>                                                                                <C>              <C>
Cash Flows from Operating Activities:
   Net earnings................................................................    $   127.7        $   90.0
   Adjustments to reconcile net earnings to net cash provided by
      operating activities:
         Depreciation and amortization.........................................         18.0            28.9
         Net (increase) decrease in working capital:
           Others..............................................................    (   122.5)           46.7
           Related parties.....................................................    (     5.3)       (    3.7)
         Net change in other assets/liabilities................................         25.2        (    2.9)
                                                                                   ---------        --------
           Total adjustments...................................................    (    84.6)           69.0
                                                                                   ---------        --------

         Net cash provided by operating activities.............................         43.1           159.0
                                                                                   ---------        --------

Cash Flows from Investing Activities:
   Decrease (increase) in note receivable from:
      Others...................................................................            -            18.5
      Related party............................................................         70.7        (  130.8)
   Capital expenditures........................................................    (    32.6)       (   56.6)
                                                                                   ---------        --------

         Net cash provided by (used in) investing activities...................         38.1        (  168.9)
                                                                                   ---------        --------

Cash Flows from Financing Activities:
   Dividend paid...............................................................    (    80.0)              -
                                                                                   ---------        --------

         Net cash used in financing activities.................................    (    80.0)              -
                                                                                   ---------        --------

Net Increase (Decrease) in Cash and Cash Equivalents...........................          1.2        (    9.9)

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

Cash and Cash Equivalents at End of Period.....................................    $     6.4        $   24.3
                                                                                   =========        ========
</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 $7.4 million for the three- and six-month periods ended June 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 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 Earnings
includes the following: Gas sales revenues included in other revenues amounted
to $6.3 million and $12.7 million for the three- and six-month periods ended
June 30, 1998, respectively, and $7.7 million and $20 million for the same
periods in 1997, respectively. Cost of gas included in operation and maintenance
amounted to $5.2 million and $11.3 million for the three- and six-month periods
ended June 30, 1998, respectively, and $6 million and $17.3 million for the same
periods in 1997, respectively.

     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 $37.6 million and $25.5 million for the six-month
periods ended June 30, 1998 and 1997, respectively. Cash payments of income
taxes amounted to $44.3 million and $60.8 million for the six-month periods
ended June 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        Six Months Ended
                                                                          June 30,                 June 30,
                                                                   ----------------------   ---------------------
                                                                      1998        1997        1998         1997
                                                                   ----------  ----------   ---------   ---------
                                                                         (Unaudited)              (Unaudited)

      <S>                                                          <C>         <C>          <C>         <C>      
      Federal Income Taxes:
         Currently payable......................................   $       .7  $     13.1   $    20.6   $    50.6
         Deferred...............................................         20.2         2.7        25.4   (     2.6)
                                                                   ----------  ----------   ---------   ---------
                                                                         20.9        15.8        46.0        48.0
      State and City Income Taxes...............................          1.9         1.7         7.0         5.0
                                                                   ----------  ----------   ---------   ---------
                                                                   $     22.8  $     17.5   $    53.0   $    53.0
                                                                   ==========  ==========   =========   =========
</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.

     Numerous 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.

     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


                                      - 6 -

<PAGE>

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

     Under an interim gas sales program that was in effect from November 1, 1992
to November 1, 1993, ANR Pipeline collected monthly charges from its former
sales customers. The monthly charges were intended to compensate the Company for
the costs of maintaining an inventory of gas supply to meet its firm sales
obligations under that program. In April 1994, ANR Pipeline filed with the
Federal Energy Regulatory Commission ("FERC") a reconciliation report, comparing
its total costs and revenues under that interim sales program, and proposing
refunds totaling $45.1 million (which refunds, together with applicable
interest, were paid in March 1995). After certain customers disputed this level
of proposed refunds, and following a FERC hearing on the matter, the FERC issued
an order in March 1998, which adopted most of ANR Pipeline's positions, but
required additional refunds. No party sought rehearing of the March 1998 order
and it became final. As required by the March 1998 order, ANR Pipeline submitted
a revised reconciliation report on April 13, 1998. The April 1998 filing was
accepted by FERC order issued June 12, 1998, and that FERC order has
subsequently become final. In June 1998, ANR Pipeline paid additional refunds
and interest of approximately $7 million in compliance with the revised
reconciliation report.

     ANR Pipeline filed a general rate increase application with the FERC on
November 1, 1993. The FERC permitted the Company to place its increased rates
into effect on May 1, 1994, subject to refund and hearing procedures. After
extensive procedures, an administrative law judge issued an Initial Decision in
January 1997, which accepted some of ANR Pipeline's proposed changes, but
rejected others. ANR Pipeline and other parties filed exceptions to certain of
the findings in the Initial Decision. Before the FERC reviewed the exceptions,
ANR Pipeline filed a comprehensive settlement to resolve all outstanding issues
in the case. The settlement included provisions for lower rates, refunds and
procedures to resolve certain reserved matters, as well as a proposal for a new
short-term firm service that would allow ANR Pipeline to charge higher rates for
shippers electing to purchase such service. By order issued February 13, 1998,
the FERC approved the settlement in all respects, except the proposed new
short-term firm service (which was rejected by the FERC), and addressed two of
the three reserved matters that the parties had requested the FERC review. The
settlement became effective on March 16, 1998 and, in compliance with the
settlement, ANR Pipeline paid refunds and interest of $66.6 million on April 15,
1998. ANR Pipeline had estimated and recorded provisions for potential rate
refunds, which exceeded the final refund requirements by $38.7 million. On June
3, 1998, the FERC denied rehearing of its February 13, 1998 order. The
proceeding is now final in all respects, other than disposition of the remaining
reserved matter which is still pending before the FERC.

     On July 29, 1998, the 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. Comments on both of these matters are due
on November 9, 1998.



                                      - 7 -

<PAGE>

     In July 1996, the United States Court of Appeals for the D. C. Circuit
upheld the basic structure of FERC Order 636 (issued in April 1992), but
remanded to the FERC, for further consideration, certain limited aspects of the
Order. In response to the remand, the FERC issued Order 636-C on February 27,
1997. Order 636-C: (i) reaffirmed the right of pipelines to recover 100% of
their prudently incurred transition costs, but required pipelines to file within
180 days a proposal for the level of costs to be allocated to interruptible
transportation customers; and (ii) reduced from 20 years to five years, the
maximum "cap" to be included in bids to renew existing contracts in order to
retain capacity. The Company and others sought rehearing and clarification of
Order 636-C, and ANR Pipeline also made the appropriate compliance filings with
the FERC. While rehearing was pending, however, ANR Pipeline's proposal to
retain its current transition cost allocation level to interruptible service was
accepted by the FERC as part of an uncontested settlement. As to the term "cap"
issue, in its order on rehearing (Order No. 636-D issued May 28, 1998), the FERC
confirmed that it would consider the existence of settlements in determining
whether any existing contracts should be shortened. ANR Pipeline did not appeal
Orders 636-C and 636-D, but certain other parties have submitted appeals.

     Certain of the above regulatory matters and other 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 the above 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.


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 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.

     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


                                      - 8 -

<PAGE>

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.

                              Results of Operations

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

     Revenues. Storage and transportation revenues decreased by $13.6 million
for the three-month period ended June 30, 1998 and increased by $0.9 million for
the six-month period ended June 30, 1998 as compared to the same periods in
1997. The primary factors contributing to the change in revenues for the
three-and six-month periods were a) lower revenues of $8.1 million and $15.6
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 $3.1 million and $14
million, respectively and c) reduced pass-through recoveries of $2.1 million and
$5.4 million, respectively, which are offset in operation and maintenance. The
above decreases for the six-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 six-month periods ended June 30,
1998 as compared to the same periods in 1997 by $13.7 million and $20.8 million,
respectively. The increase for the three-month period primarily results from the
recognition of gain on the sale of certain assets. The increase in the six-month
period was primarily due to the recognition of gain on the sale of certain
assets as discussed above and increased interest income of $13.2 million offset
by reduced gas sales of $7.3 million resulting from a reduction in the quantity
of gas auctioned on the open market.

     Operation and Maintenance. Operation and maintenance expenses decreased by
$2.2 million for the three-month period ended June 30, 1998 and increased by
$1.6 million for the six-month period ended June 30, 1998 as compared to the
same periods in 1997. The decrease for the three-month period was primarily due
to reduced pass-through expenditures. The increase for the six-month period was
primarily the result of nonrecurring charges of $16.1 million, largely due to a
provision recorded in the first quarter of 1998 for environmental regulatory
compliance, offset by lower gas purchase costs of $6.0 million and reduced
pass-through expenditures of $5.4 million.

     Depreciation and Amortization. Depreciation expense decreased for the
three-and six-month periods ended June 30, 1998 as compared to the same periods
in 1997 by $5.1 million and $9.6 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 six-month
periods ended June 30, 1998 as compared to the same periods in 1997 by $5.6
million and $8.0 million, respectively. The decreases were primarily due to
reduced interest expense associated with provisions for regulatory matters.

     Taxes on Income. Taxes on income increased by $5.3 million for the
three-month period ended June 30, 1998 as compared to the same period in 1997
primarily due to increased pre-tax income during the second quarter of 1998.


                                      - 9 -

<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 June 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:  August 13, 1998                          By:     WILLIAM L. JOHNSON
                                                    --------------------------
                                                        William L. Johnson
                                                       Senior Vice President
                                                           and Controller
                                                    (As Authorized Officer and
                                                     Chief Accounting Officer)



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