----

| Delaware                                      | 44-0382470               |
|-----------------------------------------------|--------------------------|
| (State      or other jurisdiction of          | (I.R.S.      Employer    |
| incorporation      or organization)           | Identification      No.) |
|                                          |                     |
|                                          |                     |
| 5444      Westheimer Road                     | 77056-5306               |
| Houston,      Texas                           | (Zip      Code)          |
| (Address      of principal executive offices) |                     |

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

| PART      I. FINANCIAL INFORMATION: | Page(s)                                                                                             |
|-------------------------------------|-----------------------------------------------------------------------------------------------------|
|                                |                                                                                                |
|                                | ITEM      1. Financial Statements (Unaudited):                                                      |   |
|                                |                                                                                                |
|                                | Condensed consolidated statement of    operations.                                                  | 2 |
|                                |                                                                                                |
|                                | Condensed consolidated balance sheet.                                                               | 3-4 |
|                                |                                                                                                |
|                                | Condensed consolidated statement of cash    flows.                                                  | 5 |
|                                |                                                                                                |
|                                | Condensed consolidated statement of partners’ capital and      comprehensive income.          | 6 |
|                                |                                                                                                |
|                                | Notes to condensed consolidated financial      statements.                                          | 7 |
|                                |                                                                                                |
|                                | ITEM 2. Management's Discussion and Analysis of Financial      Condition and Results of Operations. | 18 |
|                                |                                                                                                |
|                                | ITEM 3. Quantitative and Qualitative Disclosures About      Market Risk.                            | 21 |
|                                |                                                                                                |
|                                | ITEM 4. Controls and Procedures.                                                                    | 21 |
|                                |                                                                                                |
| PART      II. OTHER INFORMATION:    |                                                                                                |
|                                |                                                                                                |
|                                | ITEM 1. Legal Proceedings.                                                                          | 22 |
|                                |                                                                                                |
|                                | ITEM 1A.  Risk Factors.                                                                   | 22 |
|                                |                                                                                                |
|                                | ITEM 2.  Unregistered Sales of Equity Securities      and Use of Proceeds.                | 23 |
|                                |                                                                                                |
|                                | ITEM 3.  Defaults Upon Senior      Securities.                                            | 23 |
|                                |                                                                                                |
|                                | ITEM 4.  Submission of Matters to a Vote of      Security Holders.                        | 23 |
|                                |                                                                                                |
|                                | ITEM 5.  Other Information.                                                               | 23 |
|                                |                                                                                                |
|                                | ITEM 6. Exhibits.                                                                                   | 23 |
|                                |                                                                                                |
|                                | SIGNATURES                                                                                          | 25 |
|                                |                                                                                                |

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Table of Contents

PANHANDLE EASTERN PIPE LINE COMPANY, LP

|                                           |   | Three      Months Ended March 31, |    |
|------------------------------------------------|--------|-----------------------------------|---------|
|                                           |   | 2008                              |    |   | 2007 |   |
|                                           |   | (In      thousands)               |    |
| Operating      revenue                         |   |                              |    |   |   |   |
| Transportation      and storage of natural gas |   | $                                 | 153,382 |   |   | $ | 133,705 |   |
| LNG      terminalling revenue                  |   |                              | 30,890  |   |   |   | 32,902 |   |
| Other      revenue                             |   |                              | 2,779   |   |   |   | 2,423 |   |
| Total      operating revenue                   |   |                              | 187,051 |   |   |   | 169,030 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Operating      expenses                        |   |                              |    |   |   |   |   |   |
| Operation,      maintenance and general        |   |                              | 60,692  |   |   |   | 56,280 |   |
| Depreciation      and amortization             |   |                              | 25,061  |   |   |   | 20,709 |   |
| Taxes,      other than on income               |   |                              | 8,649   |   |   |   | 7,795 |   |
| Total      operating expenses                  |   |                              | 94,402  |   |   |   | 84,784 |   |
|                                           |   |                              |    |   |   |   |   |   |
|                                           |   |                              |    |   |   |   |   |   |
| Operating      income                          |   |                              | 92,649  |   |   |   | 84,246 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Other      income (expense)                    |   |                              |    |   |   |   |   |   |
| Interest      expense, net                     |   |                              | (21,065 | ) |   |   | (22,026 | ) |
| Other,      net                                |   |                              | 7,511   |   |   |   | 11,057 |   |
| Total      other income (expense)              |   |                              | (13,554 | ) |   |   | (10,969 | ) |
|                                           |   |                              |    |   |   |   |   |   |
| Earnings      before income taxes              |   |                              | 79,095  |   |   |   | 73,277 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Income      taxes                              |   |                              | 30,856  |   |   |   | 28,796 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Net      earnings                              |   | $                                 | 48,239  |   |   | $ | 44,481 |   |
|                                           |   |                              |    |   |   |   |   |   |

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

|                                                              |   | March      31, 2008 |      |   | December      31, 2007 |   |
|-------------------------------------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|
| Assets                                                            |   | (In      thousands) |      |
|                                                              |   |                |      |   |                   |   |
| Current      assets                                               |   |                |      |   |                   |   |
| Cash      and cash equivalents                                    |   | $                   | 308       |   |                   | $      | 320 |   |
| Accounts      receivable, billed and unbilled, less allowances of |   |                |      |   |                   |   |   |   |
| $1,163      and $1,163 respectively                               |   |                | 83,131    |   |                   |   | 68,219 |   |
| Accounts      receivable - related parties (Note 4)               |   |                | 5,492     |   |                   |   | 12,067 |   |
| Gas      imbalances - receivable                                  |   |                | 227,304   |   |                   |   | 104,124 |   |
| System      gas and operating supplies (Note 3)                   |   |                | 151,944   |   |                   |   | 180,801 |   |
| Deferred      income taxes, net                                   |   |                | 6,071     |   |                   |   | 320 |   |
| Note      receivable - CrossCountry Citrus                        |   |                | 19,638    |   |                   |   | 9,831 |   |
| Other                                                             |   |                | 23,703    |   |                   |   | 19,545 |   |
| Total      current assets                                         |   |                | 517,591   |   |                   |   | 395,227 |   |
|                                                              |   |                |      |   |                   |   |   |   |
| Property,      plant and equipment                                |   |                |      |   |                   |   |   |   |
| Plant      in service                                             |   |                | 3,002,262 |   |                   |   | 2,830,068 |   |
| Construction      work-in-progress                                |   |                | 354,589   |   |                   |   | 355,695 |   |
|                                                              |   |                | 3,356,851 |   |                   |   | 3,185,763 |   |
| Less      accumulated depreciation and amortization               |   |                | 311,326   |   |                   |   | 290,465 |   |
| Net      property, plant and equipment                            |   |                | 3,045,525 |   |                   |   | 2,895,298 |   |
|                                                              |   |                |      |   |                   |   |   |   |
| Investment      in unconsolidated subsidiary                      |   |                | 1,831     |   |                   |   | 1,757 |   |
|                                                              |   |                |      |   |                   |   |   |   |
| Note      receivable - Southern Union                             |   |                | 111,355   |   |                   |   | 221,655 |   |
| Note      receivable - CrossCountry Citrus                        |   |                | 392,582   |   |                   |   | 402,389 |   |
| Non-current      system gas (Note 3)                              |   |                | 10,001    |   |                   |   | 18,947 |   |
| Other                                                             |   |                | 18,088    |   |                   |   | 14,929 |   |
|                                                              |   |                |      |   |                   |   |   |   |
| Total      assets                                                 |   | $                   | 4,096,973 |   |                   | $      | 3,950,202 |   |
|                                                              |   |                |      |   |                   |   |   |   |

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|                                               |   | March      31, 2008 |      |   | December      31, 2007 |   |
|----------------------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|
|                                               |   | (In      thousands) |      |
| Partners'      Capital                             |   |                |      |   |                   |   |
| Partners'      capital                             |   | $                   | 1,240,386 |   |                   | $      | 1,192,147 |   |
| Accumulated      other comprehensive income (loss) |   |                | (24,261   | )      |                   |   | 1,636 |   |
| Tax      sharing note receivable - Southern Union  |   |                | (11,820   | )      |                   |   | (12,704 | ) |
| Total      partners' capital                       |   |                | 1,204,305 |   |                   |   | 1,181,079 |   |
|                                               |   |                |      |   |                   |   |   |   |
| Long-term      debt (Note 5)                       |   |                | 1,570,493 |   |                   |   | 1,581,061 |   |
| Total      capitalization                          |   |                | 2,774,798 |   |                   |   | 2,762,140 |   |
|                                               |   |                |      |   |                   |   |   |   |
| Current      liabilities                           |   |                |      |   |                   |   |   |   |
| Current      portion of long-term debt (Note 5)    |   |                | 319,552   |   |                   |   | 309,680 |   |
| Accounts      payable                              |   |                | 9,183     |   |                   |   | 21,114 |   |
| Accounts      payable - related parties (Note 4)   |   |                | 88,611    |   |                   |   | 56,706 |   |
| Gas      imbalances - payable                      |   |                | 369,185   |   |                   |   | 271,450 |   |
| Accrued      taxes                                 |   |                | 18,864    |   |                   |   | 14,501 |   |
| Accrued      interest                              |   |                | 16,238    |   |                   |   | 20,304 |   |
| Capital      accruals                              |   |                | 75,473    |   |                   |   | 97,662 |   |
| Other                                              |   |                | 59,739    |   |                   |   | 54,043 |   |
| Total      current liabilities                     |   |                | 956,845   |   |                   |   | 845,460 |   |
|                                               |   |                |      |   |                   |   |   |   |
| Deferred      income taxes, net                    |   |                | 253,287   |   |                   |   | 256,448 |   |
| Other                                              |   |                | 112,043   |   |                   |   | 86,154 |   |
|                                               |   |                |      |   |                   |   |   |   |
| Commitments      and contingencies (Note 8)        |   |                |      |   |                   |   |   |   |
|                                               |   |                |      |   |                   |   |   |   |
| Total      partners' capital and liabilities       |   | $                   | 4,096,973 |   |                   | $      | 3,950,202 |   |
|                                               |   |                |      |   |                   |   |   |   |

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

|                                                                                          |   | Three      Months Ended March 31, |     |
|-----------------------------------------------------------------------------------------------|--------|-----------------------------------|----------|
|                                                                                          |   | 2008                              |     |   | 2007 |   |
|                                                                                          |   | (In      thousands)               |     |
| Cash      flows provided by (used in) operating activities:                                   |   |                              |     |   |   |   |
| Net      earnings                                                                             |   | $                                 | 48,239   |   |   | $ | 44,481 |   |
| Adjustments      to reconcile net earnings to net cash provided by operating      activities: |   |                              |     |   |   |
| Depreciation      and amortization                                                            |   |                              | 25,061   |   |   |   | 20,709 |   |
| Deferred      income taxes                                                                    |   |                              | 6,846    |   |   |   | 5,319 |   |
| Other                                                                                         |   |                              | 349      |   |   |   | (109 | ) |
| Changes      in operating assets and liabilities                                              |   |                              | 3,748    |   |   |   | 21,531 |   |
| Net      cash flows provided by operating activities                                          |   |                              | 84,243   |   |   |   | 91,931 |   |
|                                                                                          |   |                              |     |   |   |   |   |   |
| Cash      flows provided by (used in) investing activities:                                   |   |                              |     |   |   |   |   |   |
| Net      decrease (increase) in note receivable - Southern Union                              |   |                              | 110,300  |   |   |   | (19,550 | ) |
| Net      increase in income taxes payable - related parties                                   |   |                              | 23,126   |   |   |   | - |   |
| Decrease      in note receivable - CrossCountry Citrus                                        |   |                              | -        |   |   |   | 6,664 |   |
| Additions      to property, plant and equipment                                               |   |                              | (204,355 | ) |   |   | (53,527 | ) |
| Other                                                                                         |   |                              | (2,760   | ) |   |   | (599 | ) |
| Net      cash flows used in investing activities                                              |   |                              | (73,689  | ) |   |   | (67,012 | ) |
|                                                                                          |   |                              |     |   |   |   |   |   |
| Cash      flows provided by (used in) financing activities:                                   |   |                              |     |   |   |   |   |   |
| Decrease      in book overdraft                                                               |   |                              | (10,566  | ) |   |   | (17,209 | ) |
| Issuance      of long-term debt                                                               |   |                              | -        |   |   |   | 455,000 |   |
| Repayment      of debt                                                                        |   |                              | -        |   |   |   | (462,289 | ) |
| Issuance      costs of debt                                                                   |   |                              | -        |   |   |   | (525 | ) |
| Net      cash flows used in financing activities                                              |   |                              | (10,566  | ) |   |   | (25,023 | ) |
|                                                                                          |   |                              |     |   |   |   |   |   |
| Change      in cash and cash equivalents                                                      |   |                              | (12      | ) |   |   | (104 | ) |
|                                                                                          |   |                              |     |   |   |   |   |   |
| Cash      and cash equivalents at beginning of period                                         |   |                              | 320      |   |   |   | 531 |   |
| Cash      and cash equivalents at end of period                                               |   | $                                 | 308      |   |   | $ | 427 |   |
|                                                                                          |   |                              |     |   |   |   |   |   |

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

|                                                 |   | Partners'      Capital |      | Accumulated      Other Comprehensive Income (Loss) |   | Tax      Sharing Note Receivable-Southern Union |   | Total  |    |
|------------------------------------------------------|--------|------------------------|-----------|----------------------------------------------------|--------|-------------------------------------------------|--------|--------|---------|
|                                                 |   | (In      thousands)    |      |
|                                                 |   |                   |      |                                               |   |                                            |   |   |    |
| Balance      December 31, 2007                       |   | $                      | 1,192,147 |                                               | $      | 1,636                                           |   | $      | (12,704 | ) | $ | 1,181,079 |   |
|                                                 |   |                   |      |                                               |   |                                            |   |   |    |   |   |   |   |
| Tax      sharing receivable - Southern Union         |   |                   | -         |                                               |   | -                                               |   |   | 884     |   |   | 884 |   |
|                                                 |   |                   |      |                                               |   |                                            |   |   |    |   |   |   |   |
| Comprehensive      loss:                             |   |                   |      |                                               |   |                                            |   |   |    |   |   |   |   |
| Net      earnings                                    |   |                   | 48,239    |                                               |   | -                                               |   |   | -       |   |   | 48,239 |   |
| Net      change in other comprehensive loss (Note 6) |   |                   |      |                                               |   | (25,897                                         | )      |   |    |   |   | (25,897 | ) |
| Comprehensive      income                            |   |                   |      |                                               |   |                                            |   |   |    |   |   | 22,342 |   |
|                                                 |   |                   |      |                                               |   |                                            |   |   |    |   |   |   |   |
| Balance      March 31, 2008                          |   | $                      | 1,240,386 |                                               | $      | (24,261                                         | )      | $      | (11,820 | ) | $ | 1,204,305 |   |
|                                                 |   |                   |      |                                               |   |                                            |   |   |    |   |   |   |   |

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PANHANDLE EASTERN PIPE LINE COMPANY, LP

|   | · | PEPL,      an indirect wholly-owned subsidiary of Southern Union Company (Southern Union Company      and, together with its subsidiaries, Southern      Union); |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Trunkline      Gas Company, LLC (Trunkline), a direct      wholly-owned subsidiary of PEPL; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Sea      Robin Pipeline Company, LLC (Sea Robin), an indirect      wholly-owned subsidiary of PEPL; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | Trunkline      LNG Holdings, LLC (LNG      Holdings), an indirect wholly-owned subsidiary of    PEPL; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | Trunkline      LNG Company, LLC (Trunkline LNG), a      direct wholly-owned subsidiary of LNG Holdings;  and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | Pan      Gas Storage, LLC (d.b.a. Southwest Gas Storage),      a direct wholly-owned subsidiary ofPEPL. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

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|                                           |   | Three      Months Ended |   |
|------------------------------------------------|--------|-------------------------|--------|
|                                           |   | March      31,          |   |
| Related Party Transactions                     |   | 2008                    |   |   | 2007 |   |
|                                           |   | (In      thousands)     |   |
|                                           |   |                    |   |   |   |   |
| Transportation      and storage of natural gas |   | $                       | 1,356  |   |   | $ | 1,393 |   |
| Operation      and maintenance:                |   |                    |   |   |   |   |   |   |
| Management      and royalty fees               |   |                    | 4,719  |   |   |   | 4,225 |   |
| Other      expenses                            |   |                    | 5,393  |   |   |   | 7,912 |   |
| Other      income, net                         |   |                    | 7,024  |   |   |   | 10,488 |   |
|                                           |   |                    |   |   |   |   |   |   |

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|                                              |   | Three      Months Ended March 31, |   |   | Year      Ended December 31, |   |
|---------------------------------------------------|--------|-----------------------------------|--------|--------|------------------------------|--------|
| Related      Party                                |   | 2008                              |   |   | 2007                         |   |
| Accounts      receivable - related parties:       |   | (In      thousands)               |   |
| Southern      Union (1)                           |   | $                                 | 299    |   |                         | $      | 1,174 |   |
| Other      (2)                                    |   |                              | 5,193  |   |                         |   | 10,893 |   |
|                                              |   |                              | 5,492  |   |                         |   | 12,067 |   |
| Accounts      payable - related parties:          |   |                              |   |   |                         |   |   |   |
| Southern      Union - income taxes  (3) |   | $                                 | 64,546 |   |                         | $      | 41,420 |   |
| Southern      Union - other (4)                   |   |                              | 23,826 |   |                         |   | 14,945 |   |
| Other      (5)                                    |   |                              | 239    |   |                         |   | 341 |   |
|                                              |   | $                                 | 88,611 |   |                         | $      | 56,706 |   |
|                                              |   |                              |   |   |                         |   |   |   |

| (1) | Primarily      related to expenditures made on behalf of Southern Union and interest      associated with the Note      receivable – Southern Union. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Primarily      related to interest from CrossCountryCitrus. |
|-----|-------------------------------------------------------------|

| (3) | Related      to income taxes payable to Southern Union per the tax sharing agreement,      which was amended in September 2007, to provide for taxes to be remitted      upon the filing of the tax return. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Primarily      related to payroll funding provided by Southern  Union. |
|-----|------------------------------------------------------------------------|

| (5) | Primarily      related to various administrative and operating costs paid by other      affiliate companies on behalf of theCompany. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

| Long-term Debt Obligations             |   | March      31, 2008 |      |   | December      31, 2007 |   |
|----------------------------------------|--------|---------------------|-----------|--------|------------------------|--------|
|                                   |   | (In      thousands) |      |
|                                   |   |                |      |   |                   |   |
| 4.80%      Senior Notes due 2008       |   | $                   | 300,000   |   |                   | $      | 300,000 |   |
| 6.05%      Senior Notes due 2013       |   |                | 250,000   |   |                   |   | 250,000 |   |
| 6.20%      Senior Notes due 2017       |   |                | 300,000   |   |                   |   | 300,000 |   |
| 6.50%      Senior Notes due 2009       |   |                | 60,623    |   |                   |   | 60,623 |   |
| 8.25%      Senior Notes due 2010       |   |                | 40,500    |   |                   |   | 40,500 |   |
| 7.00%      Senior Notes due 2029       |   |                | 66,305    |   |                   |   | 66,305 |   |
| Term      Loans due 2012               |   |                | 867,220   |   |                   |   | 867,220 |   |
| Net      premiums on long-term debt    |   |                | 5,397     |   |                   |   | 6,093 |   |
| Total      debt outstanding            |   |                | 1,890,045 |   |                   |   | 1,890,741 |   |
| Current      portion of long-term debt |   |                | (319,552  | )      |                   |   | (309,680 | ) |
| Total      long-term debt              |   | $                   | 1,570,493 |   |                   | $      | 1,581,061 |   |
|                                   |   |                |      |   |                   |   |   |   |

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|                                                                     |   | Three      Months Ended March 31, |    |
|--------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                     |   | 2008                              |    |   | 2007 |   |
|                                                                     |   | (In      thousands)               |    |
|                                                                     |   |                              |    |   |   |   |
| Net      earnings                                                        |   | $                                 | 48,239  |   |   | $ | 44,481 |   |
| Reclassification      of realized (gain) loss on interest rate hedges    |   |                              |    |   |   |   |   |   |
| into      earnings, net of tax of $184 and $(155), respectively          |   |                              | 277     |   |   |   | (229 | ) |
| Reduction      of prior service credit relating to other postretirement  |   |                              |    |   |   |   |   |   |
| benefits,      net of tax of $(3,231) and $0, respectively               |   |                              | (6,603  | ) |   |   | - |   |
| Change      in fair value of interest rate hedges, net of tax of         |   |                              |    |   |   |   |   |   |
| $(12,466)      and $0, respectively                                      |   |                              | (19,130 | ) |   |   | - |   |
| Reclassification      of actuarial gain and prior service credit         |   |                              |    |   |   |   |   |   |
| relating      to other postretirement benefits into earnings, net of tax |   |                              |    |   |   |   |   |   |
| of      $(245) and $(222), respectively                                  |   |                              | (441    | ) |   |   | (678 | ) |
| Total      other comprehensive income (loss)                             |   |                              | (25,897 | ) |   |   | (907 | ) |
|                                                                     |   |                              |    |   |   |   |   |   |
| Total      comprehensive income                                          |   | $                                 | 22,342  |   |   | $ | 43,574 |   |
|                                                                     |   |                              |    |   |   |   |   |   |

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|                                    |   | Postretirement      Benefits |   |
|-----------------------------------------|--------|------------------------------|--------|
|                                    |   | Three      Months Ended      |   |
|                                    |   | March      31,               |   |
|                                    |   | 2008                         |   |   | 2007 |   |
|                                    |   | (In      thousands)          |
|                                    |   |                         |   |   |   |   |
| Service      cost                       |   | $                            | 400    |   |   | $ | 336 |   |
| Interest      cost                      |   |                         | 700    |   |   |   | 511 |   |
| Expected      return on plan assets     |   |                         | (575   | ) |   |   | (483 | ) |
| Prior      service credit amortization  |   |                         | (675   | ) |   |   | (900 | ) |
| Net      periodic benefit cost (credit) |   | $                            | (150   | ) |   | $ | (536 | ) |
|                                    |   |                         |   |   |   |   |   |   |

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|                                 |   | March      31,      |   |   | December      31, |   |
|--------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                 |   | 2008                |   |   | 2007              |   |
|                                 |   | (In      thousands) |   |
|                                 |   |                |   |   |              |   |
| Current                              |   | $                   | 996    |   |              | $      | 996 |   |
| Noncurrent                           |   |                | 6,673  |   |              |   | 6,901 |   |
| Total      Environmental Liabilities |   | $                   | 7,669  |   |              | $      | 7,897 |   |
|                                 |   |                |   |   |              |   |   |   |

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|   | · | Level      1 – Observable inputs such as quoted prices in active markets for      identical assets or liabilities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | Level      2 – Observable inputs such as: (i) quoted prices for similar assets or      liabilities in active markets; (ii) quoted prices for identical or similar      assets or liabilities in markets that are not active; or (iii) valuations      based on pricing models where significant inputs (e.g., interest rates,      yield curves, etc.) are observable for the assets or liabilities, are      derived principally from observable market data, or can be corroborated by      observable market data; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level      3 – Unobservable inputs, including valuations based on pricing models      where significant inputs are not observable and not corroborated by market      data.  Unobservable inputs are used to the extent that      observable inputs are not available and reflect the Company’s own      assumptions about the assumptions market participants would use in pricing      the assets or liabilities.  Unobservable inputs are based on the      best information available in the circumstances, which might include the      Company’s own data. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | Fair      Value     |   |   | Fair      Value Measurements at March 31, 2008 |   |
|--------------------------------|--------|---------------------|--------|--------|------------------------------------------------|--------|
|                           |   | as      of          |   |   | Using      Fair Value Hierarchy                |   |
|                           |   | March      31, 2008 |   |   | Level      1                                   |   |   | Level      2 |   |   | Level      3 |   |
| Liabilities:                   |   |                |   |   |                                           |   |   |   |   |   |   |   |
| Interest-rate      derivatives |   |                | 46,623 |   |                                           |   | - |   |   |   | 13,053 |   |   |   | 33,570 |   |
|    Total        |   | $                   | 46,623 |   |                                           | $      | - |   |   | $ | 13,053 |   |   | $ | 33,570 |   |
|                           |   |                |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |

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|                                                  |   | Fair      Value Measurements At March 31, 2008 Using Significant Unobservable Inputs      (Level 3) |   |
|-------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|
|                                                  |   | Liabilities                                                                                         |   |
|                                                  |   | Interest-rate                                                                                       |   |
|                                                  |   | Derivatives                                                                                         |   |
|                                                  |   | (In      thousands)                                                                                 |   |
|                                                  |   |                                                                                                |   |
| Beginning      balance                                |   | $                                                                                                   | 17,121 |   |
| Total      gains or losses (realized and unrealized): |   |                                                                                                |   |   |
| Included      in operating revenues                   |   |                                                                                                | -      |   |
| Included      in other comprehensive income           |   |                                                                                                | 16,449 |   |
| Purchases      and settlements, net                   |   |                                                                                                | -      |   |
| Ending      balance                                   |   | $                                                                                                   | 33,570 |   |
|                                                  |   |                                                                                                |   |   |

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ITEM 2.  Management's Discussion and Analysis of FinancialCondition and Results of Operations

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|                                           |   |                              |    |   |   |   |
|------------------------------------------------|--------|-----------------------------------|---------|--------|--------|--------|
|                                           |   | Three      Months Ended March 31, |    |
|                                           |   | 2008                              |    |   | 2007   |   |
|                                           |   | (In      thousands)               |    |
| Operating      revenue:                        |   |                              |    |   |   |   |
| Transportation      and storage of natural gas |   | $                                 | 153,382 |   |   | $      | 133,705 |   |
| LNG      terminalling revenue                  |   |                              | 30,890  |   |   |   | 32,902 |   |
| Other      revenue                             |   |                              | 2,779   |   |   |   | 2,423 |   |
| Total      operating revenue                   |   |                              | 187,051 |   |   |   | 169,030 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Operating      expenses:                       |   |                              |    |   |   |   |   |   |
| Operation,      maintenance and general        |   |                              | 60,692  |   |   |   | 56,280 |   |
| Depreciation      and amortization             |   |                              | 25,061  |   |   |   | 20,709 |   |
| Taxes,      other than on income               |   |                              | 8,649   |   |   |   | 7,795 |   |
| Total      operating expenses                  |   |                              | 94,402  |   |   |   | 84,784 |   |
| Operating      income                          |   |                              | 92,649  |   |   |   | 84,246 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Other      income (expense):                   |   |                              |    |   |   |   |   |   |
| Interest      expense, net                     |   |                              | (21,065 | )      |   |   | (22,026 | ) |
| Other,      net                                |   |                              | 7,511   |   |   |   | 11,057 |   |
| Total      other expense, net                  |   |                              | (13,554 | )      |   |   | (10,969 | ) |
|                                           |   |                              |    |   |   |   |   |   |
| Earnings      before income taxes              |   |                              | 79,095  |   |   |   | 73,277 |   |
|                                           |   |                              |    |   |   |   |   |   |
| Income      taxes                              |   |                              | 30,856  |   |   |   | 28,796 |   |
|                                           |   |                              |    |   |   |   |   |   |
|                                           |   |                              |    |   |   |   |   |   |
| Net      earnings                              |   | $                                 | 48,239  |   |   | $      | 44,481 |   |
|                                           |   |                              |    |   |   |   |   |   |

| · | Increased      transportation and storage revenue of $19.7 million attributable      to: |
|--------|------------------------------------------------------------------------------------------|

|   | · | Higher      transportation reservation revenues of $11.8 million primarily due to the      phased completion of the Trunkline Field Zone Expansion project during the      period December 2007 to February 2008, reduced discounting resulting in      higher average rates realized on contracts driven by higher customer      demand and utilization of contract capacity, and approximately $1.2      million of additional revenue attributable to the extra day in the 2008      leap year; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Higher      other commodity revenues of $4.2 million primarily due to a rate increase      on Sea Robin and higher utilization on Sea Robin, net of refund      provisions; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Higher      storage revenues of $2.1 million due to increased contracted      capacity; |
|--------|--------|-----------------------------------------------------------------------------------------|

|   | · | Higher      parking revenues of $1.6 million resulting from customer demand for      parking services and market conditions;and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | A      $2 million decrease in LNG terminalling revenue due to lower volumes from      decreased LNG cargoes during 2008. |
|--------|--------------------------------------------------------------------------------------------------------------------------|

| · | An      increase in operation, maintenance and general expenses of $4.4 million      primarily attributable to: |
|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | A      $3.7 million increase in contract storage costs resulting from an increase      in leased capacity; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

|   | · | A      $2 million increase in insurance due to higher  premiums; |
|--------|--------|------------------------------------------------------------------|

|   | · | A      $900,000 increase in benefits primarily due to higher medical      costs and defined contribution savings plan      contributions; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A      $500,000 increase in royalty/service fees charged by Southern Union due to      higher revenues; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | A      $2.3 million decrease in LNG power costs resulting from decreased cargoes      during 2008; and |
|--------|--------|--------------------------------------------------------------------------------------------------------|

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|   | · | A      $1.2 million decrease in fuel tracker costs primarily due to a net      over-recovery in 2008; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

| · | Increased      depreciation and amortization expense of $4.4 million due to a $536.5      million increase in property, plant and equipment placed in service after      March 31, 2007.  Depreciation and amortization expense is      expected to continue to increase primarily due to higher capital spending,      including the compression modernization construction project and other      capital expenditures; and |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Higher      taxes other than on income of $900,000 primarily due to higher property      taxes attributable to higher qualifying operating income in the 2008      period versus the 2007 period upon which certain property tax assessments      are based. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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ITEM 3

ITEM 4.

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|   | · | changes      in demand for natural gas by the Company’s customers, in the composition      of the Company’s customer base and in the sources of natural gas available      to the Company; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      effects of inflation and the timing and extent of changes in the prices      and overall demand for and availability of natural gas as well as      electricity, oil, coal and other bulk materials and    chemicals; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | adverse      weather conditions, such as warmer than normal weather in the Company’s      service territories, and the operational impact of natural      disasters; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in laws or regulations, third-party relations and approvals, decisions of      courts, regulators and governmental bodies affecting or involving the      Company, including deregulation initiatives and the impact of rate and      tariff proceedings before FERC and various state regulatory      commissions; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      outcome of pending and futurelitigation; |
|--------|--------|---------------------------------------------------|

|   | · | the      Company’s ability to comply with or to challenge successfully existing or      new environmental regulations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   | · | unanticipated      environmental liabilities; |
|--------|--------|-----------------------------------------------|

|   | · | the      Company’s ability to acquire new businesses and assets and integrate those      operations into its existing operations, as well as its ability to expand      its existing businesses andfacilities; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      Company’s ability to control costs successfully and achieve operating      efficiencies, including the purchase and implementation of new      technologies for achieving suchefficiencies; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      impact of factors affecting operations such as maintenance or repairs,      environmental incidents, gas pipeline system constraints and relations      with labor unions representing bargaining-unit  employees; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | exposure      to customer concentration with a significant portion of revenues realized      from a relatively small number of customers and any credit risks      associated with the financial position of those  customers; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes      in the ratings of the Company’s debt securities or any of its      subsidiaries; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | changes      in interest rates and other general capital markets conditions, and in the      Company’s ability to continue to access the capital    markets; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | acts      of nature, sabotage, terrorism or other acts causing damage greater than      the Company’s insurance coveragelimits; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | market      risks beyond the Company’s control affecting its risk management      activities including market liquidity, commodity price volatility and      counterparty creditworthiness; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | other      risks and unforeseen events. |
|--------|--------|-----------------------------------------|

ITEM 1.

ITEM 1A

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ITEM 2

ITEM 3

ITEM 4

ITEM 5

ITEM 6

|                          ExhibitNo. | Description                                                                                                                                                                                                                                                                                                                                                                                                                              |
|------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3(a)                                                                                                                               | Certificate of Formation of Panhandle      Eastern Pipe Line Company, LP.  (Filed as Exhibit 3.A to      the Form 10-K for the year ended December 31, 2004 and incorporated      herein by reference.)                                                                                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 3(b)                                                                                                                               | Limited      Partnership Agreement of Panhandle Eastern Pipe Line Company, LP, dated as      of June 29, 2004, between Southern Union Company and Southern Union      Panhandle LLC.  (Filed as Exhibit 3.B to the Form 10-K for the      year ended December 31, 2004 and incorporated herein by      reference.)                                                                                                             |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 4(a)                                                                                                                               | Indenture      dated as of March 29, 1999, among CMS Panhandle Holding Company,      Panhandle      Eastern Pipe Line Company and NBD Bank, as Trustee. (Filed as Exhibit 4(a)      to the Form 10-Q for the quarter ended March 31, 1999, and incorporated      herein by reference.)                                                                                                                                                   |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 4(b)                                                                                                                               | First      Supplemental Indenture dated as of March 29, 1999, among CMS Panhandle      Holding Company, Panhandle Eastern Pipe Line Company and NBD Bank, as      Trustee, including a form of Guarantee by Panhandle Eastern Pipe Line      Company of the obligations of CMS Panhandle Holding Company. (Filed as      Exhibit 4(b) to the Form 10-Q for the quarter ended March 31, 1999, and      incorporated herein by reference.) |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 4(c)                                                                                                                               | Second      Supplemental Indenture dated as of March 27, 2000, between Panhandle, as      Issuer and Bank One Trust Company, National Association, as Trustee.      (Filed as Exhibit 4(e) to the Form S-4 filed on June 22, 2000, and      incorporated herein by reference.)                                                                                                                                                           |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 4(d)                                                                                                                               | Third      Supplemental Indenture dated as of August 18, 2003, between Panhandle, as      Issuer and Bank One Trust Company, National Association, as Trustee (Filed      as Exhibit 4(d) to the Form 10-Q for the quarter ended September 30, 2003,      and incorporated herein by reference.)                                                                                                                                         |
|                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 4(e)                                                                                                                               | Fourth      Supplemental Indenture dated as of March 12, 2004, between Panhandle, as      Issuer and J.P. Morgan Trust Company, National Association, as      Trustee.  (Filed as Exhibit 4.E to the Form 10-K for the year      ended December 31, 2004 and incorporated herein by    reference.)                                                                                                                             |

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| 4(f)   | Fifth      Supplemental Indenture dated as of October 26, 2007, between Panhandle and      The Bank of New York Trust Company, N.A., as Trustee (Filed as Exhibit 4.1      to Panhandle’s Current Report on Form 8-K filed on October 29, 2007 and      incorporated herein by reference.)                                                                                                                                                                                                     |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 4(g)   | Indenture      dated as of February 1, 1993, between Panhandle and Morgan Guaranty Trust      Company effective January 1, 1982, as amended December 3,      1999.  (Filed as Exhibit 4 to the Form S-3 filed February 19,      1993, and incorporated herein by reference.)                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10(a)  | Amended      and Restated Credit Agreement between Trunkline LNG Holdings, LLC, as      borrower, Panhandle Eastern Pipe Line Company, LP and CrossCountry Citrus,      LLC, as guarantors, the financial institutions listed therein and      Bayerische Hypo-Und Vereinsbank AG, New York Branch, as administrative      agent, dated as of June 29, 2007 (Filed as Exhibit 10.1 to Panhandle’s      Current Report on Form 8-K filed on July 6, 2007 and incorporated herein      by reference.) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10(b)  | Credit      Agreement between Trunkline LNG Holdings, LLC, as borrower, Panhandle      Eastern Pipe Line Company, LP and Trunkline LNG Company, LLC, as      guarantors, the financial institutions listed therein and Bayerische Hypo-      Und Vereinsbank AG, New York Branch, as administrative agent, dated as of      March 15, 2007. (Filed as Exhibit 10.1 to Panhandle’s Current Report on      Form 8-K filed on March 21, 2007 and incorporated herein by      reference.)               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 10(c)  | Amended      and Restated Promissory Note made by CrossCountry Citrus, LLC, as      borrower, in favor of Trunkline LNG Holdings LLC, as holder, dated as of      June 29, 2007.  (Filed as Exhibit 10(c) to Panhandle’s Annual Report      on Form 10-K filed on February 29, 2008 and incorporated herein by      reference)                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 12     | Ratio      of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.1   | Certificate      by President and Chief Operating Officer pursuant to Rule 13a – 14(a) or      15d – 14(a) promulgated under the Securities Exchange Act of 1934, as      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002.                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 31.2   | Certificate      by Senior Vice President and Chief Financial Officer pursuant to Rule 13a      – 14(a) or 15d – 14(a) promulgated under the Securities Exchange Act of      1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of      2002.                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.1   | Certificate      by President and Chief Operating Officer pursuant to Rule 13a – 14(b) or      15d – 14(b) promulgated under the Securities Exchange Act of 1934 and      Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section      1350.                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 32.2   | Certificate      by Senior Vice President and Chief Financial Officer pursuant to Rule 13a      – 14(b) or 15d – 14(b) promulgated under the Securities Exchange Act of      1934 and Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section      1350.                                                                                                                                                                                                                             |

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SIGNATURES

|                              | PANHANDLE      EASTERN PIPE LINE COMPANY, LP                                                                                                                                                                                                                          |
|-----------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |
| Date:  May      9, 2008 | By:      /s/   ROBERT      O. BOND                                                                                                                                                                                                                     |
|                              | Robert      O. BondPresident      and Chief Operating Officer(authorized      officer)    /s/   GARY      W. LEFELARGary      W. LefelarSenior      Vice President and Chief Accounting Officer(principal      accounting officer) |
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |
|                              |                                                                                                                                                                                                                                                                  |

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