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

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

      For the quarterly period ended March 31, 1998
                                

                            OR
                                
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-12499

CORNERSTONE PROPANE PARTNERS, L.P.
(Exact name of registrant as specified in its charter)

     DELAWARE                                  77-0439862
(State or other jurisdiction of                (I.R.S. Employer
incorporation or organization)                 Identification Number)

432 WESTRIDGE DRIVE/WATSONVILLE, CALIFORNIA         95076
(Address of principal executive officers)         (Zip Code)

Registrant's telephone number, including area code:  (408) 724-1921
                                
                              NONE
 (Former name, former address and former fiscal year, if changed
                       since last report.)
                                

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   Yes [ X ]       No [   ]

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of May 14, 1998:  13,234,411 - Common Units.

<PAGE>
                       CORNERSTONE PROPANE PARTNERS, L.P.

                                 TABLE OF CONTENTS
        
                                                                PAGES

                 Part I.  Financial Information

Item 1. Financial Statements

        CORNERSTONE PROPANE PARTNERS, L.P.

        Consolidated Balance Sheets as of March 31, 1998 and
          1997, and June 30, 1997                                  1

        Consolidated Statements of Income for the Three Months 
          Ended March 31, 1998 and 1997, the Nine Months Ended
          March 31,1998 and the Period from Commencement of
          Operations on December 17, 1996 to March 31, 1997        2

        Consolidated Statements of Cash Flows for the Nine Months
          Ended March 31, 1998, and the Period from Commencement
          of Operations on December 17, 1996 to March 31, 1997     3

        Notes to Consolidated Financial Statements                 5

        CORNERSTONE PROPANE PARTNERS, L.P. (PRO FORMA)

        Consolidated Statements of Income for the Nine Months 
           Ended March 31, 1998 and 1997                           8

        Notes to Pro Forma Consolidated Financial Statements       9

        SYN, INC. (PREDECESSOR)

        Consolidated Statement of Operations for the Period
          July 1, 1996 to December 16, 1996                       11

        Consolidated Statement of Cash Flows for the Period 
          July 1, 1996 to December 16, 1996                       12

        Notes to Consolidated Financial Statements                13

<PAGE>
                                
                                
                                
                                
                  CORNERSTONE PROPANE PARTNERS, L.P.

                     TABLE OF CONTENTS (Continued)
                                                               PAGES
                                
                 Part I.  Financial Information

       EMPIRE ENERGY CORPORATION (PREDECESSOR)

       Consolidated Statement of Operations for the Period 
        July 1, 1996 to December 16, 1996                        14

       Consolidated Statement of Cash Flows for the Period
        July 1, 1996 to December 16, 1996                        15

       Notes to Consolidated Financial Statements                16
  
       CGI HOLDING, INC. (PREDECESSOR)

       Consolidated Statement of Operations for the Period 
        August 1, 1996 to December 16, 1996                      17

       Consolidated Statement of Cash Flows for the Period 
        August 1, 1996 to December 16, 1996                      18

       Notes to Consolidated Financial Statements                19

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations of Cornerstone
         Propane Partners, L.P. for the Three Months Ended March
         31, 1998 and 1997 and for the Nine Months Ended March
         31, 1998 and March 31,1997 (Pro Forma )                 21
                                

                   Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K                        28

         Signature                                               29

<PAGE>






                CORNERSTONE PROPANE PARTNERS, L.P. AND
                            SUBSIDIARIES
                CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                (Dollars in thousands, except unit data)
                                
                                
                                

ASSETS
<TABLE>
<CAPTION>                                
                                       March 31,        
                                    ---------------     June 30,
                                    1998       1997       1997
                                  --------  --------   ---------
Current assets:                                         
<S>                             <C>       <C>         <C> 
 Cash and cash equivalents      $ 6,025   $  23,115   $  8,406
 Trade receivables, net          34,729      40,557     41,924
 Inventories                     16,031      19,539     15,538
   Prepaid expenses and other                       
   current assets                 7,120       6,350      4,393
                               ---------  ---------  ---------
                              
     Total current assets                               
                                 63,905      89,561     70,261
                                                        
Property,  plant and                         
equipment, net                  271,256     240,550    247,943
Goodwill and other intangible                        
assets, net                     243,337     201,876    221,748
Other assets                      1,726      11,572      1,041
                              ---------   ---------   --------
             Total assets     $ 580,224   $ 543,559  $ 540,993
                              =========   =========  =========
</TABLE>
                                                        

                LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Current liabilities:          
<S>                          <C>          <C>       <C>
Current portion of long-term                    
  debt                        $  4,184    $  5,406   $  5,736
 Trade accounts payable         20,202      33,444     42,334
 Accrued expenses               22,774      15,925     12,672
                             ---------   ---------   --------
                                                                          
    Total current liabilities   47,160      54,775     60,742
                                                        
Long-term debt                 232,905     224,135    231,532
Due to related party             1,621       2,353        740
Other noncurrent liabilities     4,254      14,663      4,050
                              --------    --------    -------
                            
                            
     Total liabilities         285,940     295,926    297,064
                             ---------   ---------   --------
                         
Commitments and contingencies                           
                                                        
Partners' capital:                                      
  Common unitholders (13,234,411                        
    units issued and outstanding 
    at March  31, 1998; 9,821,000
    units issued and
    outstanding at March 31,
    1997; and 10,512,805 units
    issued and outstanding at
    June 30, 1997)             197,776     143,232    146,851
  Subordinated unitholders                        
    (6,597,619 units issued
     and outstanding)           90,538      99,351     92,106
 General partners                5,970       5,050      4,972
                             ---------   ---------   --------
                         
     Total partners' capital   294,284     247,633    243,929
                             ---------   ---------   --------
     
                                       
     Total liabilities and                        
     partners' capital     $   580,224   $ 543,559 $  540,993
                             =========    ========  =========
</TABLE>

The accompanying notes are an integral part of these consolidated
balance sheets.
<PAGE>
           CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES              
             CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
             (Dollars in thousands, except per unit data)
<TABLE>
<CAPTION>

                                                              Period From
                                                              Commencement
                        Three Months Three Months Nine Months of Operations 
                            Ended       Ended        Ended    on December 17,
                          March 31,   March 31,     March 31,     1996 to
                             1998         1997         1998    March 31, 1997
                       ------------- ------------   ---------  -------------
<S>                      <C>         <C>            <C>        <C>
Revenue                  $ 229,332   $ 220,566      $ 623,267  $ 260,936
                                                                            
Cost of sales              179,362     178,050        505,302    209,391
                         ---------   ---------       --------  ---------
                        
Gross profit                49,970      42,516        117,965     51,545
                         ---------   ---------       --------   --------
                 
Expenses:                                                   
  Operating, general and                                   
  administrative            25,340      23,590         72,757     27,968
  Depreciation and                                   
  amortization               4,714       3,819         13,615      4,394
                         ---------    --------        -------    -------
                            30,054      27,409         86,372     32,362
                         ---------    --------        -------    -------
                                                            
Operating income            19,916      15,107         31,593     19,183
Interest expense             4,824       4,450         14,641      5,228
                          --------    --------       --------    -------
      
Income before provision                                   
for income taxes            15,092      10,657         16,952     13,955
Provision for income                                  
taxes                           43          20             95         25
                          --------    --------        --------    -------
                      
Net income                $ 15,049    $ 10,637        $ 16,857   $ 13,930
                          ========    ========        ========   ========
General partners interest                                        
in net income            $     301    $    213        $    337   $    376
                          ========    ========         =======    =======
Limited partners'         
interest in net income   $  14,748    $ 10,424        $ 16,520   $ 13,554
                           =======     =======        ========   ========
Basic and diluted net                                   
income per limited
 partner unit            $    .76    $     .63        $    .92   $    .82
                          =======     ========          ======   ========
Weighted  average  number                                   
of units outstanding       19,407       16,513          17,962     16,513
                          =======     ========          ======    =======

</TABLE>



The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
         CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES

          CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                       (Dollars in thousands)

<TABLE>
<CAPTION>
                                                       Period From
                                                       Commencement
                                                       of Operations on
                                        Nine Months    December 17,
                                          Ended          1996 to
                                        March 31,        March 31,
                                           1998            1997
                                      -------------   --------------
CASH FLOWS FROM OPERATING ACTIVITIES:                      
<S>                                    <C>               <C>
 Net income                            $ 16,857          $ 13,930
 Adjustments to reconcile net income
 to net cash provided by operating
 activities:
 Depreciation and amortization           13,615             4,394
  (Gain) loss on sale of assets            (676)               26
  Changes  in assets and liabilities,
  net of effect of acquisitions:
  Trade receivables                       8,181            37,922
  Inventories                            (2,004)            6,754
  Prepaid expenses and other assets      (5,380)           (3,583)
  Trade accounts payable and accrued
  expenses                              (19,028)          (41,347)
                                       ---------         ---------
 Net cash provided by operating              
      activities                         11,565             18,096
                                       --------          ---------
            
                                      
CASH FLOWS FROM INVESTING ACTIVITIES:                      
   Expenditures for property, plant             
     and equipment                      (11,916)           (1,710)
   Acquisitions, net of cash received   (13,162)              _
                                        --------           -------
   Net cash used in investing
   activities                           (25,078)           (1,710)
                                        --------           -------
</TABLE>
<TABLE>

<CAPTION>            

CASH FLOWS FROM FINANCING ACTIVITIES: 
<S>                                   <C>              <C>            
 Net repayments on Working Capital
 Facility                                 (122)          (12,800)
 Financing costs                        (2,420)              _
 Borrowings on purchase obligations        _                1,141
 Payments on purchase obligations       (3,117)              (683)
 Advances from general partner             881               _
  Proceeds from issuance of common   
  units (net of costs)                  40,795               _
 General partners contribution           1,185               _
 Partnership distributions             (26,070)              _
                                      ---------         ---------
  Net cash provided by (used in)
      financing activities              11,132            (12,342)
                                      --------          ---------
</TABLE>
<TABLE>
<CAPTION>                                               
PARTNERSHIP FORMATION TRANSACTIONS:                        
  <S>                                 <C>              <C>
  Net proceeds from issuance 
   of Common and Subordinated 
   Units                                 _               191,804
 Borrowings on Working Capital 
   Facility                              _                12,800
 Issuance of long-term debt              _               220,000
 Cash transfers from Predecessor 
   Companies                             _                22,418
  Repayment of long-term debt and
    related interest                      _             (337,631)
  Distribution to Special General
    Partner for the redemption
    of preferred stock                    _              (61,196)
 Distribution to Special General
    Partner                               _              (15,500)
 Other fees and expenses                  _              (13,626)
                                      ---------         ---------
                                               
  Net cash provided by partnership             
  formation transactions                  _               19,069
                                      ---------         ---------
</TABLE>
<PAGE>
      CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES

       CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                     (Dollars in thousands)

<TABLE>
<CAPTION>
                                                       Period From
                                                       Commencement
                                                      of Operations on
                                          Nine Months   December 17,
                                               Ended       1996 to
                                             March 31,    March 31,
                                               1998          1997
                                         -------------  -------------
<S>                                      <C>           <C>       
INCREASE (DECREASE) IN CASH AND CASH                  
EQUIVALENTS                               $  (2,381)      $  23,113
                                                        
CASH AND CASH EQUIVALENTS, Beginning  of          
Period                                         8,406              2
                                           ---------       --------
                                             
CASH AND CASH EQUIVALENTS, End Of Period   $   6,025      $  23,115
                                            =========     =========
CASH PAID DURING THE PERIOD FOR:                        
 Interest                                  $  10,429       $  5,228
                                            ========      =========
ASSETS  ACQUIRED  IN  EXCHANGE  FOR  COMMON          
UNITS                                      $  17,588          _
                                            ========      =========
ASSETS  ACQUIRED IN EXCHANGE FOR DEBT      $   6,054          _
                                            ========      =========
</TABLE>
The accompanying notes are an integral part of these consolidated
                      financial statements.
                                
<PAGE>

       CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                           MARCH 31, 1998
           (Dollars in thousands, except unit data) 


1.   BASIS OF PRESENTATION

  The  consolidated financial statements include the accounts  of
Cornerstone  Propane Partners, L.P. ('Cornerstone Partners')  and
its   subsidiary,   Cornerstone  Propane  L.P.  (the   'Operating
Partnership')   and   the   Operating   Partnership's   corporate
subsidiaries,  Cornerstone Sales and Service Corporation  ('Sales
and  Service') and Flame, Inc. (acquired in November 1997), after
elimination   of   all   material   intercompany   balances   and
transactions.   Cornerstone Partners, the Operating  Partnership,
Sales and Service and Flame, Inc. are collectively referred to as
the 'Partnership.'

  The  accompanying interim consolidated financial statements  of
the  Partnership  are  unaudited,  however,  in  the  opinion  of
management, all adjustments necessary for a fair presentation  of
such consolidated financial statements have been reflected in the
interim  periods presented.  Such adjustments consisted  only  of
normal  recurring items.  The Partnership's business is  seasonal
and,  accordingly, interim results are not indicative of  results
for a full year.  The significant accounting policies and certain
financial  information which are normally included  in  financial
statements   prepared  in  accordance  with  generally   accepted
accounting  principles, but which are not  required  for  interim
reporting   purposes,  have  been  condensed  or  omitted.    The
accompanying consolidated financial statements of the Partnership
should  be  read  in conjunction with the consolidated  financial
statements and related notes included in the Partnership's Annual
Report on Form 10-K for the fiscal year ended June 30, 1997.

2.   DISTRIBUTIONS OF AVAILABLE CASH

  The  Partnership makes distributions to its  partners  with
respect to each fiscal quarter of the Partnership within 45  days
after the end of each fiscal quarter in an aggregate amount equal
to its  Available  Cash for  such  quarter.  Distributions by the
Partnership in an amount equal to 100% of it's Available Cash will generally
be made 98% to the Common and Subordinated Unitholders and 2% to the General
Partners, subject to the payment of incentive distributions in the event
Available Cash exceeds the Minimum Quarterly Distribution of $.54 on all units.
During the Subordination Period, to the extent there is sufficient Available
Cash, the holders of Common Units have the right to receive the Minimum
Quarterly Distribution, plus any arrearages, prior to the distribution  of
Available  Cash  to holders of Subordinated Units. Subordinated Units do
not accrue arrearages with respect to distribution for any quarter. 
  The  Minimum  Quarterly Distributions for the six-month  period
from April 1, 1997 to September 30, 1997, of $.54 per Common  and
Subordinated  Unit  totaling $18,858 were  paid  during  the  six
months  ended  December 31, 1997.  For the period from October  1,
1997  to December 31, 1997, distributions of $.54 per Common Unit
totaling $7,212 were paid on February 13, 1998.  On April 28,  1998,
the Minimum Quarterly Distribution for the period January 1, 1998
to  March  31,  1998,  was  declared  in  the  amount  of  $7,293
representing  in  the  aggregate  distributions  to  the  general
partner and $.54 per Common Unit.  This distribution will be paid
on  or prior to May 15, 1998.  No distributions were declared  on
the  Subordinated Units for the period from October  1,  1997  to
March 31, 1998.

3.   ACQUISITIONS

  The  Partnership consummated four acquisitions during the quarter
ended  March 31, 1998.  The total consideration  for  the acquisitions was 
approximately   $10.8  million of which approximately  $3.0  million was in
the form of approximately 148,000  Common Units, $5.7 million was paid in cash
and $2.1 million was for liabilities assumed. Effective  October 31, 1997,   
the Partnership  registered  3,000,000 additional  units  which  are
available to  be used for future acquisitions.  The  Partnership
consummated  seven  acquisitions  during  the  nine  months  ended March 31, 
1998. The total consideration for the acquisitions was  approximately  $36.8 
million of which  approximately  $17.6 million  was in the form of 
approximately 762,000  Common  Units,  $13.2 million was paid in cash and 
$6.1 million was for liabilities assumed. All acquisitions have been accounted
for using the purchase method of accounting.

4.   NET INCOME PER LIMITED PARTNER UNIT

   Financial  Accounting  Standards  Board  Statement  No.   128,
'Earnings  per Share' ('Statement No. 128'), issued  in  February
1997  and  effective for financial statements for periods  ending
after December 15, 1997, establishes and simplifies standards for
computing and presenting earnings per share.  Statement  No.  128
requires restatement of all prior-period earnings per share  data
presented.  Basic net income per limited partner unit is computed
by  dividing  net income, after considering the General  Partners
interest,   by  the  weighted  average  number  of   Common   and
Subordinated Units outstanding.  Diluted net income  per  limited
partner   unit   is  computed  by  dividing  net  income,   after
considering  the  General  Partners  interest,  by  the  weighted
average  number of Common and Subordinated Units outstanding  and
the weighted average number of Restricted Units granted under the
Restricted Unit Plan.

5.   PARTNERS' CAPITAL

  In January 1998, the Partnership sold an aggregate of 1,960,000
Common  Units  at $22.125 per unit pursuant to an underwritten
public   offering.    Net  proceeds  to  the   Partnership   were
approximately  $40.8 million.  The Partnership used approximately
$10.0  million of the net proceeds for general business  purposes
and  the  balance  to repay amounts outstanding  under  the  Bank
Credit Facility.
<PAGE>

           CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES
                                PRO FORMA
               CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                              MARCH 31, 1998
             (Dollars in thousands, except per unit data)



                                              Nine        Nine
                                             Months      Months
                                             Ended       Ended
                                           March 31,   March 31,
                                             1998        1997
                                           --------     --------
                                            (Actual)  (Pro Forma)
                                                       
Revenue                                 $  623,267    $  535,503
                                        
Cost of sales                              505,302       428,959
                                         ---------     ---------
Gross profit                               117,965       106,544
                                         ---------     ---------
Expenses:                                              
 Operating, general and administrative      72,757        66,209
 Depreciation and amortization              13,615        10,948
                                         ---------     ---------
                                            86,372        77,157
                                         ---------     ---------
                                           
Operating income                            31,593        29,387
Interest expense                            14,641        13,499
                                         ---------     ---------
Income before provision for income taxes    16,952        15,888
Provision for income taxes                      95            70
                                         ---------     ---------
                                         $  16,857      $ 15,818
                                            ======        ======
General partners interest in net income  $     337      $    317
                                              ====          ====
Limited partners'interest in net income  $  16,520      $ 15,501
                                            ======        ======
Basic and diluted net income per limited   
  partner unit                           $     .92     $     .94
                                            ======        ======
Weighted average number of                             
 units outstanding                          17,962        16,513
                                            ======        ======
                                                       

The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>

           CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES

                      NOTES TO PRO FORMA CONSOLIDATED
                      FINANCIAL STATEMENTS (UNAUDITED)
                             MARCH 31, 1998
                         (Dollars in thousands)



1.   BASIS OF PRESENTATION

     The unaudited pro forma consolidated statement of income for
     the  nine  months  ended March 31, 1997, was derived  from  the
     historical statements of operations of Empire Energy Corporation
     (Empire Energy) for the period July 1 through December 16, 1996,
     of SYN Inc. (Synergy) for the period July 1 through December 16,
     1996, and of CGI Holdings, Inc. (Coast) for the period August 1
     through  December 16, 1996, and the consolidated  statement  of
     operations  of the Partnership from December 17,  1996  through
     March 31,  1997. Empire  Energy, Synergy and Coast are
     collectively referred to as the 'Predecessor Companies.'  The pro
     forma  consolidated statement of income was prepared to reflect
     the  effects  of the Partnership's December 17,  1996,  Initial
     Public Offering (IPO) as if it had been completed in its entirety
     as of July 1, 1996.  However, this statement does not purport to
     present the results of operations of the Partnership had the IPO
     actually been completed as of July 1, 1996.  In addition, the pro
     forma  consolidated statement of operations is not  necessarily
     indicative of the results of future operations of the Partnership
     and should therefore be read in conjunction with the historical
     consolidated financial statements of the Predecessor  Companies
     and the Partnership appearing elsewhere in this Quarterly Report
     on Form 10-Q.
  
 2.  PRO FORMA ADJUSTMENTS

     Significant pro forma adjustments reflected in the pro forma
     consolidated statement of income included the following:
  
     Adjustments  to  reflect  the  full  period  effect   of
     operating  expense savings resulting from the consolidation  of
     certain  operations that occurred subsequent to July  1,  1996,
     as  well  as the elimination of certain operating, general  and
     administrative  expenses associated with the operation  of  the
     Partnership.
  
     General and administrative adjustments of $1,254 relating
     to  corporate  overhead  consolidation,  the  consolidation  of
     certain  retail  locations and the  elimination  of  bank  and
     consulting fees.
<PAGE>
         CORNERSTONE PROPANE PARTNERS, L.P. AND SUBSIDIARIES

                     NOTES TO PRO FORMA CONSOLIDATED
                     FINANCIAL STATEMENTS (UNAUDITED)
                               MARCH 31, 1998
                           (Dollars in thousands)



  Adjustments of $60 to reflect the additional depreciation and
  amortization  expense  due  to the  increase  in  property  and
  intangibles that resulted from applying the purchase method  of
  accounting to the Empire Energy and Coast acquisitions.
  
  Adjustments to reduce interest expense by $270 to reflect
  interest  expense applicable to the Partnership for  the  nine-
  month  period ended March 31, 1997.  These adjustments  include
  interest  expense for the $220,000 senior notes at  a  rate  of
  7.53%  per  annum, expense attributable to the working  capital
  facility  based on an average outstanding principal balance  of
  $2,000  at 6.5% per annum, expense attributable to debt assumed
  based on an average outstanding principal balance of $9,500  at
  8.5%  per  annum and debt expense amortization based on  $5,500
  estimated debt issuance costs.
  
  Adjustments  to  reflect the elimination  of  income  tax
  related  accounts  because income taxes are not  borne  by  the
  Partnership,  except for income taxes applicable to  operations
  conducted   by   the   Partnership's   wholly-owned   corporate
  subsidiary.
<PAGE>  

                   SYN INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                             (In Thousands)

                                                   For the
                                                   Period
                                                   July 1,
                                                   1996 to
                                                  December 16,
                                                    1996
                                               --------------

REVENUE                                          $  44,066
                                   
COST OF SALES                                       23,322
                                                   -------
GROSS PROFIT                                        20,744      
                                                   -------

OPERATING EXPENSES                                                          
 Salaries and commissions                            7,252
 General and administrative                          6,151      
 Depreciation and amortization                       1,904                 
 Related-party corporate administration and             
   management fees                                   1,668
                                                   -------
   Total operating expenses                         16,975                    
                                                   -------

OPERATING INCOME                                     3,769

INTEREST EXPENSE, including $2,214 to             
related party                                        3,311
                                                   -------

INCOME BEFORE INCOME TAXES                             458

INCOME TAX EXPENSE                                      
                                                       298
                                                   -------
                                                    
NET INCOME                                             160

DIVIDENDS ON CUMULATIVE PREFERRED STOCK             (3,878)
                                                  --------
                                                    
NET LOSS APPLICABLE TO COMMON STOCKHOLDERS              
                                                  $ (3,718)
                                                  =========

        The accompanying notes are an integral part of this
               consolidated financial statement.
<PAGE>

                     SYN, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                          (In Thousands)


                                             For the Period
                                             July 1, 1996
                                                  to
                                              December 16,
                                                 1996
                                            -----------------

OPERATING ACTIVITIES:                                   

 Net income                                     $      160           
 Items not requiring (providing) cash:                  
    Depreciation and amortization                    1,904       
    Gain on sale of assets                             233                    
    Deferred income taxes                              298               
 Changes in operating items:                            
  Trade receivables                                 (1,991)      
  Inventories                                       (1,873)
  Prepaid expenses and other                          (569)
  Accounts payable                                   2,549
  Accrued expenses                                   3,602
                                                  --------
  Net cash provided by operating  
  activities                                         4,313
                                                  --------

INVESTING ACTIVITIES:                                   
 Purchases of property and equipment                (4,240)
 Proceeds from sale of assets                          489
                                                  --------
    Net cash used in investing activities           (3,751)
                                                  --------
                                                      
FINANCING ACTIVITIES:                                   
 Increase in credit facility                        20,367
 Payments on credit facility                       (16,532)
 Payment on long-term debt                            (242)       
 Preferred stock dividends paid                     (3,878)                
                                                   -------
Net cash used in financing activities                 (285)
                                                   -------

INCREASE IN CASH                                       277                  
 
CASH, BEGINNING OF PERIOD                               14
                                                   -------
CASH, END OF PERIOD                                $   291
                                                   =======

CASH PAID DURING THE PERIOD FOR:                        
 Interest                                           $3,339                    
                                                     =====
 Income taxes                                         $190
                                                       ===

        The accompanying notes are an integral part of this
                consolidated financial statement.
<PAGE>

                    SYN INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                           (In Thousands)

1.    BASIS OF PRESENTATION

     The consolidated financial statements include the accounts of SYN Inc. and
     its subsidiaries ('Synergy') after elimination of all material
     intercompany balances and transactions.
  
     The accompanying interim consolidated financial statements of Synergy are
     unaudited; however, in the opinion of management, all adjustments
     necessary for a fair presentation of such consolidated financial 
     statements have been reflected in the interim periods presented. Such
     adjustments consisted only of normal recurring items. Synergy's business is
     seasonal and, accordingly, interim results are not indicative of results
     for a full year. The significant accounting policies and certain
     financial information which are normally included in financial statements 
     prepared in accordance with generally accepted accounting principles, but
     which are not required for interim reporting purposes, have been 
     condensed or omitted. The accompanying consolidated financial
     statements of Synergy should be read in conjunction with the
     consolidated financial statements and related notes included in the
     Annual Report of Cornerstone Propane Partners, L.P. on Form 10-K for
     the fiscal year ended June 30, 1997.
  
1.   SUBSEQUENT EVENTS

     On  December  17,  1996, substantially all of  the  assets  and
     liabilities  of Synergy  were  contributed  to   Cornerstone
     Propane,  L.P.,  a subsidiary of Cornerstone Propane  Partners,
     L.P.
<PAGE>
                   EMPIRE ENERGY CORPORATION

        CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                         (In Thousands)


                                                         For the
                                                         Period
                                                         July 1,
                                                         1996 to
                                                      December 16,
                                                          1996
                                                     -------------
REVENUE                                              $   43,201

COST OF SALES                                            23,310
                                                      ---------
GROSS PROFIT                                             19,891
                                                      ---------

OPERATING COSTS AND EXPENSES:                           
 General and administrative                              13,394
 Depreciation and amortization                            2,930
                                                      ---------
                                                         16,324
                                                      ---------
                                        
OPERATING INCOME                                          3,567
                                                        
INTEREST EXPENSE                                          3,621
                                                      ---------
                                          
LOSS BEFORE INCOME TAXES                                   (54)
                                                        
INCOME TAX EXPENSE                                          32
                                                      ---------
NET LOSS                                                  $(86)
                                                          =====


The  accompanying notes are an integral part of this consolidated
financial statement.

<PAGE>
                   EMPIRE ENERGY CORPORATION
  
  CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                         (In Thousands)

                                                      For the Period
                                                       July 1, 1996
                                                            to
                                                       December 16,
                                                            1996
                                                       -------------
CASH FLOWS FROM OPERATING ACTIVITIES                    
 Net loss                                               $    (86)
 Items not requiring (providing) cash:                  
  Depreciation                                             2,671
  Amortization                                               258
  Loss on sale of assets                                       4
  Deferred income taxes                                     (126)
 Changes in:                                            
  Trade receivables                                       (8,352)
  Inventories                                             (4,383)
  Accounts payable and accrued expenses                    4,889
  Prepaid expenses and other                              (2,313)
  Income taxes payable                                       457
  Due from SYN Inc.                                       (1,863)
                                                        ---------
     Net cash used in operating activities                (8,844)
                                                        ---------
                                                        
CASH FLOWS FROM INVESTING ACTIVITIES                  
 Proceeds from sale of assets                                 57
 Purchases of property and equipment                      (2,823)
 Capitalized costs                                          (242)
                                                         --------
    Net cash used in investing activities                 (3,008)
                                                         --------

CASH FLOWS FROM FINANCING ACTIVITIES                    
 Increase in credit facilities                             9,606
 Principal payments on purchase obligations                 (114)
 Proceeds from management buyout loan                     94,000
 Repayments of acquisition credit facility               (31,100)
 Purchase  of  company stock in  management     
 buyout                                                  (59,000)
 Payment of debt acquisition costs                        (3,100)
                                                        ---------
    Net cash provided by financing activities             10,292
                                                        ---------

DECREASE IN CASH                                          (1,560)
                                                        
CASH:                                                   
 Beginning of period                                       2,064
                                                         --------
 End of Period                                             $ 504
                                                            ====



CASH PAID (RECEIVED) DURING THE PERIOD FOR:             
 Interest                                                  $910
                                                           ====
 Income taxes                                             $(609)
                                                         ======       

The accompanying notes are an integral part of this consolidated
                      financial statement.

<PAGE>
                    EMPIRE ENERGY CORPORATION
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                           (In Thousands)



1.  BASIS OF PRESENTATION

    The consolidated financial statements include the accounts of
    Empire Energy Corporation and its subsidiaries ('Empire Energy')
    after  elimination  of all material intercompany  balances  and
    transactions.
  
    The  accompanying   interim   consolidated   financial
    statements  of  Empire Energy are unaudited;  however,  in  the
    opinion  of  management, all adjustments necessary for  a  fair
    presentation  of  such consolidated financial  statements  have
    been   reflected  in  the  interim  periods  presented.    Such
    adjustments  consisted only of normal recurring items.   Empire
    Energy's   business  is  seasonal  and,  accordingly,   interim
    results  are  not indicative of results for a full  year.   The
    significant   accounting   policies   and   certain   financial
    information   which   are   normally  included   in   financial
    statements  prepared  in  accordance  with  generally  accepted
    accounting  principles, but which are not required for  interim
    reporting  purposes,  have  been  condensed  or  omitted.   The
    accompanying  consolidated  financial  statements   of   Empire
    Energy  should  be  read in conjunction with  the  consolidated
    financial  statements and related notes included in the  Annual
    Report  of Cornerstone Propane Partners, L.P. on Form 10-K  for
    the fiscal year ended June 30, 1997.

2.  CHANGES OF CONTROL

    On  August  1,  1996, members of management  of  Empire  Energy
    purchased  the ownership (92.7% of the Common Stock) of  Empire
    Energy  from  the  principal  stockholder  and  certain   other
    stockholders.  On October 7, 1996, the new ownership of  Empire
    Energy  sold  100%  of the common stock to Northwestern  Growth
    Corporation.   Because  of the changes  in  control  of  Empire
    Energy,  these  acquisitions  were  accounted  for  using   the
    principles of purchase accounting.

3.  SUBSEQUENT EVENTS

    On  December  17,  1996, substantially all of  the  assets  and
    liabilities  of  Empire Energy were contributed to  Cornerstone
    Propane,  L.P.,  a subsidiary of Cornerstone Propane  Partners,
    L.P.
<PAGE>
                       CGI HOLDINGS, INC.

        CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
                         (In Thousands)



                                                        August 1,
                                                           1996
                                                            to
                                                         December
                                                            16,
                                                           1996
                                                         ---------

Sales and other revenue                                $  185,460
                                                         --------
Costs and expenses:                                     
 Cost of sales, except for depreciation and             
 amortization                                             173,155
 Operating, general and administrative                      9,919
 Depreciation and amortization                              1,604
 Interest expense                                           2,238
 Loss on sale of partnership interest                         660
                                                          --------
Loss before income taxes                                   (2,116)
Income tax benefit                                           (748)
                                                          --------
Net loss                                                $  (1,368)
                                                         =========

The accompanying notes are an integral part of this consolidated
                      financial statement.
<PAGE>

                         CGI HOLDINGS, INC.
  
        CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
                         (In Thousands)
                                
                                                        August 1,
                                                           1996
                                                            to
                                                       December 16,
                                                            1996
                                                       --------------
CASH FLOWS FROM (USED FOR)                                   
 OPERATING ACTIVITIES:
  Net loss                                              $  (1,368)
  Adjustments to reconcile net loss to net            
     cash from operating activities                            
  Depreciation and amortization                             1,604
  Sale of partnership interest                                202
  Deferred income taxes                                      (732)
  Changes in assets and liabilities net of
     acquisitions:
     Accounts and notes receivable                        (11,532)
     Inventories                                            4,257
     Prepaid expenses and deposits                           (729)
     Other assets                                            (154)
     Accounts payable                                      11,082
     Accrued liabilities                                   (1,007)
                                                           -------
                                                            1,623
                                                           -------

CASH FLOWS FROM (USED  FOR) INVESTING            
ACTIVITIES:
  Proceeds from sale of property and                        
     equipment                                                57
  Purchases of and investments in property  
     and equipment                                        (1,503)
                                                          -------
                                                          (1,446)
                                                          -------
                                                        
CASH FLOWS FROM (USED FOR) FINANCING            
ACTIVITIES:
  Repayment of long-term debt                               (562)
  Repayment of other notes payable                          (252)
  Principal payments under capital lease obligations        (506)
  Borrowings under acquisition line                        5,999
                                                           ------
                                                           4,679
                                                           ------

NET INCREASE IN CASH                                       4,856
                                                        
CASH AND CASH EQUIVALENTS,                              
  BEGINNING OF PERIOD                                      1,519
                                                          ------
CASH AND CASH EQUIVALENTS,                              
  END OF PERIOD                                         $  6,375
                                                         =======
                                
The accompanying notes are an integral part of this consolidated
                      financial statement.
<PAGE>
                         CGI HOLDINGS, INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Presentation
     The consolidated financial statements include the accounts of CGI
     Holdings, Inc. (the 'Company') and its wholly-owned subsidiary, Coast
     Gas, Inc., and its wholly-owned subsidiary Coast Energy Group,Inc.
     ('CEG'). In 1989, the Company formed CEG, headquartered in Houston,
     Texas, to conduct  its wholesale procurement and distribution operations.
     All significant intercompany transactions have been eliminated
     in consolidation.
  
     The  accompanying consolidated financial  statements  are
     unaudited  and have been prepared in accordance with the  rules
     and  regulations  of  the Securities and  Exchange  Commission.
     They  include  all  adjustments  which  the  Company  considers
     necessary  for a fair statement of the results for the  interim
     periods  presented.  Such adjustments consisted only of  normal
     recurring items unless otherwise disclosed.  Certain notes  and
     other  information  have been condensed  or  omitted  from  the
     interim   financial  statements  presented  in  this  Quarterly
     Report  on  Form  10-Q.   Due to the  seasonal  nature  of  the
     Company's  propane  business, the  results  of  operations  for
     interim  periods are not necessarily indicative of the  results
     to  be  expected  for a full year.  These financial  statements
     should  be  read  in conjunction with the financial  statements
     contained   in   the  Annual  Report  of  Cornerstone   Propane
     Partners, L.P. on Form 10-K for the fiscal year ended June  30,
     1997.
  
2.   COMMITMENTS AND CONTINGENCIES

     The Company has contracts with various suppliers to purchase  a
     portion  of its supply needs of LPG for future deliveries  with
     terms  ranging  from  one  to twelve  months.   The  contracted
     quantities  are not significant with respect to  the  Company's 
     anticipated  total  sales requirements and  will  generally  be
     acquired  at prevailing market prices at the time of  shipment.
     Outstanding  letters  of  credit  issued  in  conjunction  with
     product  supply  contracts are a normal  business  requirement.
     There  were no outstanding letters of credit issued  on  behalf
     of the  Company as of December 16, 1996 other than  the  $13.0
     million drawn against its credit guidance line.
  
     The  Company is engaged in certain legal actions related to the
     normal conduct of business.  In the opinion of management,  any
     possible   liability  arising  from  such   actions   will   be
     adequately  covered by insurance or will not  have  a  material
     adverse  effect on the Company's financial position or  results
     of operations.

3.   SALE OF PARTNERSHIP INTEREST

     Effective   October  1,  1996,  the  Company   terminated   its
     participation  and interest in Coast Energy Investments,  Inc.,
     a limited partnership in which CEG was a 50% limited  partner.
     The  original  partnership agreement  provided  for  a  minimum
     investment   term  through  December  1997.   The   termination
     resulted  in the sale of the Company's partnership interest  to
     its  50%  partner  and an employee of the limited  partnership.
     The  Company  recorded  a net loss on the  disposition  of  the
     partnership interest of $660,000.  This amount consisted  of  a
     $202,000  loss  on the partnership investment and  $458,000  of
     termination  costs  consisting  of  salary,  consulting,   non-
     compete agreements and other related expenses.

4.   SUBSEQUENT EVENTS

     On  December  17,  1996, substantially all of  the  assets  and
     liabilities  of  the  Company were contributed  to  Cornerstone
     Propane,  L.P.,  a subsidiary of Cornerstone Propane  Partners,
     L.P.
<PAGE>
                  CORNERSTONE PROPANE PARTNERS, L.P.
  
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The  following  discussion of the historical financial  condition
and  results of operations for the Partnership should be read  in
conjunction   with  the  historical  and  pro   forma   financial
statements and notes thereto included elsewhere in this Quarterly
Report on Form 10-Q.

General

The  Partnership  is  a  Delaware limited  partnership  initially
formed  to  own  and operate the propane business and  assets  of
Synergy,  Empire Energy and Coast.  The Partnership's  management
believes that it is the fifth largest retail marketer of  propane
in  the  United  States, serving more than  380,000  residential,
commercial,  industrial  and  agricultural  customers  from   301
customer service centers in 27 states.

Because  a  substantial portion of the Partnership's  propane  is
used   in   the   weather-sensitive  residential   markets,   the
temperatures   in   the   Partnership's  areas   of   operations,
particularly  during the six-month peak-heating  season,  have  a
significant   effect   on  the  financial  performance   of   the
Partnership.   In any given area, warmer-than-normal temperatures
will  tend  to  result  in reduced propane use,  while  sustained
colder-than-normal temperatures will tend to  result  in  greater
propane  use.   Therefore, information on normal temperatures  is
used  by  the Partnership in understanding how historical results
of  operations  are affected by temperatures that are  colder  or
warmer   than  normal  and  in  preparing  forecasts  of   future
operations, which are based on the assumption that normal weather
will prevail in each of the Partnership's regions.

Gross  profit  margins are not only affected by weather  patterns
but  also  by  changes in customer mix.  For  example,  sales  to
residential  customers ordinarily generate  higher  margins  than
sales   to   other  customer  groups,  such  as   commercial   or
agricultural  customers.  In addition, gross profit margins  vary
by  geographic  region.  Accordingly, profit margins  could  vary
significantly  from year to year in a period of  identical  sales
volumes.

<PAGE>
                      CORNERSTONE PROPANE PARTNERS, L.P.
  
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Analysis of Results of Operations

The  following discussion compares the results of operations  and
other  data  of the Partnership for the three-months ended  March
31, 1998, to the three-months ended March 31, 1997, and the nine-
months  ended March 31, 1998, to the pro forma nine-months  ended
March  31,  1997,  which  has  been prepared  assuming  that  the
Partnership had been in existence at July 1, 1996.

Three  months ended March 31, 1998, compared to the three  months
ended March 31, 1997:

Volume.   During  the  three months ended  March  31,  1998,  the
Partnership sold 83.5 million retail propane gallons; an increase
of  8.5  million  gallons or 11.3% over the 75.0  million  retail
propane  gallons  sold during the three months  ended  March  31,
1997.   Wholesale  volumes were 191.0 million  gallons  and  81.4
million  gallons, for the three months ended March 31,  1998  and
1997, respectively, which represents an increase of 109.6 million
gallons or 134.6%.  The increase in wholesale volume is primarily
attributable  to the expansion of the wholesale business  since
the  formation of the Partnership in December 1996.  Acquisitions
of new propane businesses since March 31, 1997, accounted for 9.1
million  retail gallons during the three months ended  March  31,
1998.

Based on the average number of heating degree days in the markets served
by the Partnership, for the three months ended March 31, 1998, temperatures
were approximately 7.0% warmer than normal.  While this indicator generally
measures the impact of temperatures on the Partnership's business, other
factors  such  as  geographic  mix,  magnitude  and  duration  of
temperature and weather conditions can also impact sales volumes.
The overall impact of weather is believed by management to have had an adverse
impact  on  the  Partnership's  retail  sales  volume  (excluding
acquisitions)  and  earnings compared to normal  levels  for  the
three  months  ended  March 31, 1998.   The  three  months  ended
March  31,  historically accounts for approximately  48%  of  the
Partnership's annual EBITDA.
<PAGE>
                      CORNERSTONE PROPANE PARTNERS, L.P.
  
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Revenues.   Revenues increased by $8.8 million or 4.0% to  $229.3
million for the three months ended March 31, 1998, as compared to
$220.5  million for the three months ended March 31, 1997.   This
increase  was primarily attributable to an increase in  wholesale
Natural  Gas Liquids (NGL's) revenue of $10.5 million or 8.0%  to
$142.5  million  for the three months ended March  31,  1998,  as
compared  to $132.0 million for the three months ended March  31,
1997.   This  increase  was  due to the significant  increase  in
wholesale  volumes  mentioned  above  offset  by  a  significant
reduction in the average cost and average sales price per  gallon
of  wholesale  NGL.  Revenues for the retail Liquid  Propane  Gas
(LPG)  business  decreased by $3.4 million,  or  4.1%,  to  $79.2
million for the three months ended March 31, 1998, as compared to
$82.6  million for the three months ended March 31,  1997.   This
decrease was a result of a reduction in both the average cost and
average  sales price per gallon of LPG offset to some extent by the 
increase in sales volume described above.

Cost  of  Product Sold.  Cost of product sold increased  by  $1.3
million,  or  .7%, to $179.4 million for the three  months  ended
March  31,  1998,  as compared to $178.1 million  for  the  three
months  ended  March 31, 1997.  The increase in cost  of  product
sold  was  primarily due to the increased wholesale sales  volume
described  above.  As a percentage of revenues, cost  of  product
sold  decreased  to 78.2% for the three months  ended  March  31,
1998,  as compared to 80.7% for the three months ended March  31,
1997.

Gross  Profit.  Gross profit increased by $7.5 million, or 17.5%,
to  $50.0  million for the three months ended March 31, 1998,  as
compared  to $42.5 million for the three months ended  March  31,
1997.   Retail LPG per gallon margins for the three months  ended
March  31,  1998, were slightly smaller than for the same  period
last  year,  primarily  due  to  reductions in the higher margin residential 
sales due to the mild heating season as a result of El Nino weather
patterns  and competitive pressures.  As a percentage of revenues, gross
profit increased to 21.8% for the three months ended March 31, 1998, as
compared to 19.3% for the three months ended March 31, 1997,  due
to  higher retail volumes that have higher margins.  Gross profit
from  propane businesses acquired since March 31, 1997, was  $5.1
million for the three months ended March 31, 1998.

Operating,   General  and  Administrative  Expenses.   Operating,
general and administrative expense increased by $1.7 million,  or
7.4%, to $25.3 million for the three months ended March 31, 1998,
as compared to $23.6 million for the three months ended March 31,
1997.    Approximately  $1.3  million  of   this   increase   was
attributable  to increases in operating expenses  resulting  from
the  acquisitions of new businesses since March 31, 1997, and the
correspondingly increased sales volumes discussed  above.   As  a
percentage  of  revenues, operating, general  and  administrative
expenses increased to 11.0% for the three months ended March  31,
1998, as compared to 10.7% for the  three months ended March  31,
1997.
<PAGE>
               CORNERSTONE PROPANE PARTNERS, L.P.
  
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Nine  months  ended March 31, 1998, compared to the  nine  months
ended March 31, 1997 (pro forma):

Volume.   During  the  nine  months ended  March  31,  1998,  the
Partnership  sold  199.7  million  retail  propane  gallons,   an
increase of 16.6 million gallons, or 9.1%, from the 183.1 million
retail  propane  gallons sold during the pro  forma  nine  months
ended  March  31,  1997.  Wholesale volumes  were  520.9  million
gallons and 244.0 million gallons for the nine months ended March
31,  1998 and 1997 respectively, which represents an increase of 276.9
million gallons or 113.5%.  The increase in wholesale volume is primarily
attributable  to the expansion of the wholesale business  since
the  formation of the Partnership in December 1996.  Acquisitions
of  new  propane businesses since March 31, 1997,  accounted  for
17.1  million retail gallons during the nine months  ended  March
31, 1998.  For the nine months ended March 31,1998, the impact of the 
recent El Nino winter adversely impacted average customer sales due to 
the reduced heating degree days during the winter months in the markets
served by the Partnership.  While heating degree days generally measures
the impact of temperatures on the Partnership's business, other
factors such as geographic mix, magnitude and duration of
temperature and other weather conditions can also impact sales
volumes.  The overall impact of weather is believed by management to have
had an adverse impact on the Partnership's retail sales volume
(excluding acquisitions) and earnings compared to both normal and
year ago levels for the nine months ended March 31, 1998.  The
nine months ended March 31 historically accounts for
approximately 96% of the Partnership's EBITDA.

Revenues.   Revenues  increased by $87.8 million,  or  16.4%,  to
$623.3  million  for  the nine months ended March  31,  1998,  as
compared  to  $535.5 million for the pro forma nine months  ended
March 31, 1997.  This increase was attributable to an increase in
wholesale  NGL  revenues of $175.2 million  or  74.6%  to  $409.9
million for the nine months ended March 31, 1998, as compared  to
$234.7  million  for the pro forma nine months  ended  March  31,
1997,  reflecting  the  increase in  wholesale  volume  mentioned
above.   The  revenues for the retail LPG business  decreased  by
$4.2  million,  or 2.2%, to $185.9 million for  the  nine  months
ended  March 31, 1998, as compared to $190.1 million for the  pro
forma  nine  months ended March 31, 1997.  This  decrease  was  a
result of a reduction in both the average cost and average  sales
price  per  gallon  of propane offset to some extent by the increase 
in  sales volume described above.
<PAGE>
               CORNERSTONE PROPANE PARTNERS, L.P.
  
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Cost  of  Product Sold.  Cost of product sold increased by  $76.3
million,  or  17.8%, to $505.3 million for the nine months  ended
March  31, 1998, as compared to $429.0 million for the pro  forma
nine  months  ended  March 31, 1997.  The  increase  in  cost  of
product  sold was primarily due to the increased wholesale  sales
volume  described  above.  As a percentage of revenues,  cost  of
product  sold increased to 81.1% for the nine months ended  March
31,  1998,  as  compared to 80.1% for the pro forma  nine  months
ended March 31, 1997.

Gross Profit.  Gross profit increased by $11.4 million, or 10.7%,
to  $118.0 million for the nine months ended March 31,  1998,  as
compared  to  $106.5 million for the pro forma nine months  ended
March  31,  1997.  Retail per gallon margins for the nine  months
ended  March  31, 1998, were slightly smaller than for  the  same
period last year, primarily due to reductions in the higher margin
residential sales volumes due to the mild winter heating season.
As a percentage of revenues, gross profit decreased to 18.9%  for the
nine  months ended March 31, 1998, as compared to 19.9%  for  the
pro  forma  nine months ended March 31, 1997.  The  decrease  was
caused  by  higher  wholesale volumes which have  lower  margins.
Gross  profit  from propane businesses acquired since  March  31,
1997, was $9.5 million for the nine months ended March 31, 1998.

Operating,   General  and  Administrative  Expenses.   Operating,
general and administrative expense increased by $6.5 million,  or
9.9%,  to $72.8 million for the nine months ended March 31, 1998,
as  compared  to $66.2 for the pro forma nine months ended  March
31,  1997.   Approximately  $4.3 million  of  this  increase  was
attributable  to increases in operating expenses  resulting  from
the  acquisitions of new businesses since March 31, 1997, and the
correspondingly increased sales volumes discussed  above.   As  a
percentage  of  revenues, operating, general  and  administrative
expenses  decreased to 11.7% for the nine months ended March  31,
1998,  as  compared to 12.4% for the pro forma nine months  ended
March 31, 1997.

The   partnership  utilizes  software  and  various  technologies
throughout its business that will be affected by the date  change
in  the  year 2000.  An internal study is currently under way  to
determine  the  full scope and related costs to insure  that  the
Partnership's systems continue to meet its internal needs and the
needs  of  its  customers.  The Partnership has  began  to  incur
expenses  in  1998  to  resolve this issue.   The  expenses  will
continue  through  the  year 1999 but  are  not  expected  to  be
material to the Partnership's operations.
<PAGE>
               CORNERSTONE PROPANE PARTNERS, L.P.
  
            MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Liquidity and Capital Resources

Operating  Activities.   Cash provided  by  operating  activities
during  the  nine-month period ended March 31,  1998,  was  $11.6
million.  Cash flow from operations included net income of  $16.9
million,  and  noncash charges of $12.9 million for  the  period,
principally  comprised of depreciation and amortization  expense.
The  impact  of working capital changes decreased  cash  flow  by
approximately $18.2 million.

Investing Activities.  Cash used in investment activities for the
nine  month  period ended March 31, 1998, totaled $25.1  million,
which  was primarily related to Partnership acquisitions and for purchases 
of property, plant  and equipment.

Financing  Activities. Cash provided by financing activities  was
$11.1  million  for the nine months ended March 31,  1998,  which
principally reflects the $40.8 million net proceeds received from
the  issuance  of  1,960,000 additional Common Units,  offset  by
repayments  of  purchase contract obligations  of  $3.1  million,
payment of financing costs of $2.4 million and cash distributions
paid to Unitholders of $26.1 million.

Financing and Sources of Liquidity

The  Operating Partnership's obligations under the Note Agreement
under  which  its  Senior Notes were issued and its  Bank  Credit
Agreement  are  secured by a security interest in  the  Operating
Partnership's inventory, accounts receivable and certain customer
storage  tanks.   The  Note  and Bank Credit  Agreements  contain
various  terms and covenants including financial ratio  covenants
with respect to debt and interest coverage and limitations, among
others,  on  the  ability of the Operating  Partnership  and  its
subsidiary  to incur additional indebtedness, create liens,  make
investments  and  loans,  enter into mergers,  consolidations  or
sales  of  all or substantially all assets and make asset  sales.
Generally,  so  long as no default exists or  would  result,  the
Partnership is permitted to make distributions during each fiscal
quarter in an amount not in excess of Available Cash with respect
to  the immediately preceding quarter.  The Operating Partnership
was in compliance with all terms and covenants at March 31, 1998.

In  January 1998, the Partnership sold an aggregate of  1,960,000
Common  Units  at $22.125 per unit in pursuant to an underwritten
public   offering.    Net  proceeds  to  the   Partnership   were
approximately  $40.8 million.  The Partnership used approximately
$10.0  million of net proceeds for general business purposes  and
the  balance  to repay amounts outstanding under the Bank  Credit
Facility.
Forward-Looking Statements

Forward-looking statements herein are made pursuant to  the  safe
harbor provisions of the Private Securities Litigation Reform Act
of  1995.   There  are certain important factors discussed  below
that   could  cause  results  to  differ  materially  from  those
anticipated by some of the statements made herein.  Investors are
cautioned  that all forward-looking statements involve risks  and
uncertainty.   Among the factors that could cause actual  results
to  differ  materially are the following:  pricing strategies  of
competitors,  the  Partnership's ability to continue  to  receive
adequate product from its vendors on acceptable credit terms  and
to  obtain  sufficient  financing to meet  its  liquidity  needs,
effects  of  weather  and overall economic conditions,  including
inflation,  consumer confidence, spending habits  and  disposable
income.
<PAGE>

               CORNERSTONE PROPANE PARTNERS,L.P.




                   PART II.  OTHER INFORMATION

Item 6 Exhibits and Reports on Form 8-K

     a)   Exhibits:
     
          (27) Financial Data Schedule
       
     b)   Reports on Form 8-K:
       
          On January 12, 1998, the Company filed a report on Form 8-
          K noting the Underwriting Agreement for the January 1998, public
          offering of 1,960,000 Common Units of the Company.

<PAGE>



                            SIGNATURE

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


                              CORNERSTONE PROPANE PARTNERS, L.P.
                              ----------------------------------
                                        (Registrant)


                                   By:  Cornerstone Propane GP,Inc.
                                        Managing General Partner


Date:  May 14, 1998                By:     /s/ Ronald J. Goedde
                                          ---------------------
                                   Name:  Ronald J. Goedde
                                   Title:    Executive Vice President
                                             and Chief Financial Officer