SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                               FORM 10-K

(Mark One)
[x]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
      OR

      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
      SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
      _____ TO _____

                       Commission File No. 1-935
                          QUESTAR GAS COMPANY
        (Exact name of registrant as specified in its charter)

      State of Utah                                          87-0155877
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                     Identification No.)

180 East 100 South, P.O. Box 45360, Salt Lake City, Utah     84145-0360
(Address of principal executive offices)                     (Zip code)

Registrant's telephone number, including area code:      (801) 324-5555

      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                 None
      SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                 None
     SECURITIES REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933:
                 Notes:  Medium Term Notes, 6.85% to 8.43%,
                        due 2007 to 2024

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
State the aggregate market value of the voting stock held by
nonaffiliates of the registrant as of March 1, 2000:  $0.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 1, 2000:  9,189,626 shares of
Common Stock, $2.50 par value.  (All shares are owned by Questar
Regulated Services Company.)

      Registrant meets the conditions set forth in General Instruction
(I)(1)(a) and (b) of Form 10-K and is therefore filing this Form 10-K
Report with the reduced disclosure format.

                            TABLE OF CONTENTS


Heading                                                             Page

                                 PART I

Items 1.
and 2.     BUSINESS AND PROPERTIES...................................  1
              General................................................  1
              Gas Distribution.......................................  1
              Gas Supply.............................................  3
              Competition, Growth and Unbundling.....................  4
              Regulation.............................................  5
              Relationships with Affiliates..........................  7
              Employees.............................................  10
              Environmental Matters.................................  10
              Research and Development............................... 10

Item 3.    LEGAL PROCEEDINGS......................................... 11

Item 4.    SUBMISSION OF MATTERS TO A VOTE OF
           SECURITY HOLDERS.......................................... 11

                                 PART II

Item 5.    MARKET FOR REGISTRANT'S EQUITY
           AND RELATED STOCKHOLDER MATTERS........................... 11

Item 6.    OMITTED................................................... 11

Item 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF
           OPERATION................................................. 12

Item 8.    FINANCIAL STATEMENTS AND
           SUPPLEMENTARY DATA........................................ 16

Item 9.    CHANGES IN AND DISAGREEMENTS WITH
           ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE...................................... 16

                                PART III

Items      OMITTED................................................... 16
10-13

                                 PART IV

Item 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
           AND REPORTS ON FORM 8-K................................... 16

SIGNATURES........................................................... 34

                                FORM 10-K
                           ANNUAL REPORT, 1999

                                 PART I

ITEMS 1. and 2.  BUSINESS AND PROPERTIES

General

      Questar Gas Company (the "Company" or "Questar Gas") distributes
natural gas to more than 686,000 sales and transportation customers in
Utah, southwestern Wyoming, and a small section in southeastern Idaho.
It is part of the Regulated Services segment within Questar Corporation
("Questar"), which is a publicly-owned and diversified energy company.

      The Company, through a predecessor, began distributing natural gas
in 1929 when a pipeline was built to transport natural gas from
southwestern Wyoming to Salt Lake City, Utah.  Between 1929 and the
present time, Questar Gas expanded its system to include over 90 percent
of Utah's population and to capture a market share of over 90 percent
for furnaces and water heaters within its service area.

      The Company has traditionally capitalized on two competitive
advantages--owning natural gas reserves and offering a full-range of
services to customers at reasonable prices.  Questar Gas intends to
maintain a competitive position in its traditional service area, even as
deregulation and unbundling change the rules.

Gas Distribution

      As of December 31, 1999, Questar Gas was serving 686,317
residential, commercial, and industrial customers, a 3.5 percent
increase from the 663,392 customers served as of the end of 1998.
(Customers are defined in terms of active meters.)  The Company
distributes gas to customers in the major populated area of Utah,
commonly referred to as the Wasatch Front, in which the Salt Lake
metropolitan area, Provo, Ogden, and Logan are located.  It also serves
customers in eastern, central, and southwestern Utah with Price,
Roosevelt, Fillmore, Richfield, Cedar City, and St. George as the
primary cities.  Over 96 percent of the Company's customers are in Utah.
Questar Gas serves the communities of Rock Springs, Green River, and
Evanston in southwestern Wyoming and the community of Preston in
southeastern Idaho.  Questar Gas has been granted the necessary
regulatory approvals by the Public Service Commission of Utah ("PSCU"),
the Public Service Commission of Wyoming ("PSCW"), and the Public
Utilities Commission of Idaho ("PUCI") to serve these areas.  It also
has long-term franchises granted by communities and counties within its
service area.

      Questar Gas added 22,925 customers in 1999, which was the sixth
consecutive year in which the Company added at least 20,000 customers.
Most of the customer growth was attributable to new housing, although
the Company continues to add customers in its traditional and newer
service areas that are converting to natural gas.  The population of the
Company's service area in Utah continues to grow faster than the
national average.  Questar Gas expects to add 17,000-20,000 customers
each year until at least 2002.

      The Company's sales to residential and commercial customers are
seasonal, with a substantial portion of such sales made during the
heating season.  The typical residential customer in Utah (defined as a
customer using 115 decatherms ("Dth") per year) uses more than 75
percent of total gas requirements in the coldest six months of the year.
(A Dth is an amount of heat energy equal to 10 therms or 1 million Btu.
In the Company's system, each thousand cubic feet ("Mcf") of gas equals
approximately 1.045 Dth.)  The Company's revenue forecasts used to set
rates are based on normal temperatures.  Historically, revenues and
resulting net income have been affected by temperature patterns that are
below or above normal.  As measured in degree days, temperatures in the
Company's service area were 8 percent warmer than normal in 1999, which
was the sixth consecutive year in which temperatures have been warmer
than normal.

      The Company's sensitivity to weather and temperature conditions
has been ameliorated by adopting a weather normalization mechanism for
its general service customers in Utah and Wyoming.  The mechanism, which
has been in effect since 1997, adjusts the non-gas cost portion of a
customer's monthly bill as the actual degree days in the billing cycle
are warmer or colder than normal.  This mechanism reduces the sometimes
dramatic fluctuations in any given customer's monthly bill from year to
year due to weather variations.

      During 1999, Questar Gas sold 82.2 million decatherms ("MMDth") of
natural gas to residential and commercial customers, compared to 83.2
MMDth in 1998.  General service sales to residential and commercial
customers were responsible for 88 percent of the Company's total
revenues in 1999.  The decline in sales volumes reflects a one percent
decrease in the average usage of gas on a temperature-adjusted basis
between 1998 and 1999.  Questar Gas customers are continuing to make a
transition to more efficient gas-burning appliances.

      Questar Gas has designed its distribution system and annual gas
supply plan to handle design-day demand requirements.  The Company
periodically updates its design-day demand, which is the volume of gas
that firm customers could use during extremely cold weather.  For the
1999-2000 heating season, the Company used a design-day demand of
999,650 Dth for firm sales customers.  Questar Gas is also obligated to
have pipeline capacity, but not gas supply, for firm transportation
customers; the current combined design-day requirement for supply and
transportation capacity is 1,129,133 Dth.  The Company's management
believes that the distribution system is adequate to meet the demands of
its firm customers.

      The Company's total industrial deliveries, including both sales
and transportation, decreased from 65.1 MMDth in 1998 to 61.5 MMDth in
1999, reflecting a slowdown in operations by a major customer.

      The majority of interruptible sales service customers pay rates
based on the Company's weighted average cost of purchased gas.  Questar
Gas also has an interruptible sales rate utilizing a dedicated gas
portfolio.

      The Company's tariff permits industrial customers to make annual
elections for interruptible sales or transportation service.  Questar
Gas has been providing transportation service since 1986.  The Company's
largest transportation customers, as measured by revenue contributions
in 1999, are the Geneva Steel plant in Orem, Utah; the Kennecott copper
processing operations, located in Salt Lake County; and the mineral
extraction operations of Magnesium Corporation of America in Tooele
County, west of Salt Lake.

      Questar Gas owns and operates distribution systems throughout its
Utah, Wyoming and Idaho service areas and has a total of 20,696 miles of
street mains, service lines, and interconnecting pipelines.  The Company
has consolidated many of its activities in its operations center located
in Salt Lake City, Utah.  Questar Gas continues to own field offices and
service center facilities in other parts of its service area.  It has
fee title to the properties on which its operation and service centers
are constructed.  The mains and service lines are constructed pursuant
to franchise agreements or rights-of-way.

Gas Supply

      Questar Gas owns natural gas producing properties in Wyoming, Utah
and Colorado that are operated by Wexpro Company ("Wexpro") and uses the
gas produced from these properties for part of its base-load demand.
The Company's investment in these properties is included in its utility
rate base.  Questar Gas has regulatory approval to use this
"cost-of-service" gas for firm sales customers.  During 1999,
approximately 49 percent of the Company's firm sales requirement was
satisfied with cost-of-service gas produced from over 630 wells in more
than 30 fields.  (As defined, cost-of-service gas includes related
royalty gas.)  The volumes produced from such properties are transported
for the Company by Questar Pipeline Company ("Questar Pipeline").  See
"Relationships with Affiliates."  During 1999, 45.8 MMDth of gas were
delivered from such properties, compared to 42.7 MMDth in 1998.

      The Company estimates that it had reserves of 353.4 billion cubic
feet ("Bcf") of natural gas as of year-end 1999 compared to 339.8 Bcf as
of year-end 1998.  (These reserve numbers do not include gas attributed
to royalty interest owners.  Reserve numbers are typically reported in
volumetric units, such as Bcf, that don't reflect heating values.)  The
increased reserves were attributable to revisions and extensions as a
result of Wexpro's drilling activities, which more than offset the
production associated with such properties.  The average wellhead cost
associated with gas volumes produced from the Company's cost-of-service
reserves was $1.54 per Dth in 1999, which is below the average cost of
purchased volumes.

      Some of the wells on the Company's producing properties qualify
for special tax credits, commonly referred to as "Section 29" or "tight
sands" tax credits.  During 1999, Questar Gas, as the party with the
economic interest in the gas produced from such wells, claimed $1.9
million in Section 29 tax credits.  To qualify for the special tax
credits, production must flow from wells that meet specified tight sands
criteria and that commenced drilling prior to January 1, 1993.  Only gas
volumes produced prior to January 1, 2003, are eligible for the special
tax credit.

      Questar Gas stores up to 13.3 Bcf of gas at Clay Basin, a
base-load storage facility owned and operated by Questar Pipeline to
provide flexibility for handling gas volumes produced from
cost-of-service properties.  Gas is injected into the Clay Basin storage
reservoir during the summer and withdrawn during the heating season.

      Questar Gas has a balanced and diversified portfolio of gas supply
contracts with a variety of suppliers located in the Rocky Mountain
states of Wyoming, Colorado, and Utah.  It also purchases gas on the
spot market, primarily during the heating season.  The Company's gas
purchase contracts have market-based provisions and are either of
short-duration or renewable on an annual basis upon agreement of the
parties.  Questar Gas's gas acquisition objective is to obtain reliable,
diversified sources of gas supply at competitive prices.  In the latest
purchased gas cost filing, the Company estimated that its 2000 average
cost of purchased gas would be $2.61 per Dth for gas delivered to the
upstream pipeline.

      Some gas supplies reaching the Company's system have a lower Btu
content, which is attributable to the presence of carbon dioxide in gas
volumes extracted from coal seams and the stripping of liquids at
processing plants.  Appliances in Questar Gas's service area have
historically been set to burn gas within a certain Btu range, and
customer-safety problems can occur if the Btu content of delivered gas
falls outside this range.  The Company has reduced its recommended set
point standard for appliances.  New and replacement appliances installed
by heating contractors meet this standard.  Questar Gas and heating
contractors are systematically adjusting appliances to the new standard.
To provide an appropriate transition period, Questar Gas contracted with
an affiliate to construct and operate a processing plan to remove carbon
dioxide from coal-seam gas, thereby increasing the Btu content.  The
plant became operational in mid-1999.  (See "Regulation" for a
discussion of regulatory proceedings involving the costs associated with
this activity.)

Competition, Growth, and Unbundling

      Questar Gas has historically enjoyed a favorable price comparison
with all energy sources used by residential and commercial customers
except coal and occasionally fuel oil.  This historic price advantage,
together with the convenience and handling advantages associated with
natural gas and with the services provided in conjunction with natural
gas, has permitted the Company to retain over 90 percent of the
residential space heating and water heating market in its service area
and to distribute more energy, in terms of Btu content, than any other
energy supplier to residential and commercial markets in Utah.

      The Company continues to focus marketing efforts to develop
incremental load in existing homes and new construction.  Almost all
households in its service area connected to Questar Gas's system already
use natural gas for space heating and water heating.  Virtually 100
percent of the new homes constructed in its service area that are
connected to its system use natural gas for space heating and water
heating.  The Company's market share for other secondary appliances,
e.g., ranges and dryers, has historically been less than 30 percent.

      Questar Gas believes that it must maintain a competitive price
advantage in order to retain its residential and commercial customers
and to build incremental load by convincing current customers to convert
additional secondary appliances to natural gas.

      Historically, the Company's competitive position has been
strengthened as a result of owning natural gas producing properties and
satisfying as much as approximately 40-50 percent of its system
requirements with the cost-of-service gas produced from such properties.
Questar Gas develops an annual gas supply plan that provides for a
judicious balance between cost-of-service gas and purchased gas.  The
Company believes that it is important to continue owning gas reserves,
producing them in a manner that will serve the best short- and long-term
interests of its customers, and satisfying a significant portion of its
supply requirements with gas produced from such properties.

      No other distributor markets natural gas sales service in direct
competition with the Company in its service area, but marketing firms
are arranging direct purchase contracts between large users in the
Company's service area and producers.  These customers have not bypassed
Questar Gas, but can take advantage of the open-access status of either
the pipeline systems owned by Questar Pipeline or Kern River Gas
Transmission Company ("Kern River").  The Company's sales rates are
competitive when compared to other energy sources, but can be higher
than the delivered price of spot-market gas volumes transported through
its system to large customers.

      The Kern River pipeline, which was built to transport gas from
southwestern Wyoming to Kern County, California, runs through portions
of the Company's service area and can provide an alternative delivery
source to transportation customers.  As of the date of this report,
Questar Gas has lost no industrial load as a result of the Kern River
line.  The existence of the Kern River pipeline, however, coupled with
the open-access status of Questar Pipeline's transmission system, has
changed the nature of market conditions for the Company.  Large
industrial customers in Utah's Wasatch Front area could acquire taps on
Kern River's system or direct taps on Questar Pipeline's system.  The
Company has taps on the Kern River line that enable it to obtain
delivery of additional peak-day supplies to meet increasing demand.  The
existence and location of the Kern River pipeline system also made it
possible for the Company to extend service into new areas in rural Utah
and to develop a second source of supply for its central and southern
Utah system.

      Questar Gas and all local distribution companies are faced with
the challenges and opportunities posed by the unbundling and
restructuring of traditional utility services.  As a local distribution
company, the Company owns and controls the lines through which gas is
delivered, supplies natural gas to residential customers, measures the
consumption of gas used by its customers, provides assorted services to
customers, and bills for consumption and related services.  The services
provided by Questar Gas are packaged and priced as a "bundle."  Most
"unbundling" discussions focus on commodity unbundling for residential
and commercial customers to separate the commodity supply from the
transportation service.  (Industrial customers have enjoyed the benefit
of this supplier choice on the Company's system since 1986.)  (See
"Regulation" for a discussion of the Company's program to offer supplier
choice to its Wyoming general service customers.)  Questar Gas and other
utilities are reviewing the long-term desirability of continuing the
"merchant function" of selling natural gas to customers.

      Questar Gas has been reviewing the opportunities associated with
unbundling.  The Company believes that it is well-positioned to succeed
in a competitive environment.  Questar Gas is an efficient natural gas
company, a statement that is supported by such statistics as increasing
the number of customers served per employee from 475 in 1997 to 537 in
1998 and 559 in 1999.  (The numbers include a proportionate share of
employees in the Company's direct parent, Questar Regulated Service
Company ("QRS").)  Questar Gas intends to maintain its competitive
position within its own service area even as it prepares for the time
when it may no longer sell natural gas to customers.  Questar Gas and
QRS have reviewed and will continue to explore opportunities to take
advantage of a favorable customer service reputation by providing
additional services to new and existing customers.

Regulation

      Questar Gas and all retail distribution companies have been
subject to governmental regulation as a substitute for competition.
Other regulated industries--airline, trucking, telecommunication,
financial service and interstate pipeline--have been and are being
deregulated, and competitive market forces are forcing these industries
to place more emphasis on operating efficiency.  The substitution of
competition for regulation is causing Questar Gas and other distribution
companies to review their costs and reexamine their commitment to
providing sales service.

      The Company offers its Wyoming residential and commercial
customers a "supplier choice" program, which was approved by the PSCW in
1998.  Under this program, general service customers have the option of
selecting a different supplier of gas while purchasing transportation
and associated services from Questar Gas.  (The Company has allowed its
industrial customers to purchase their own gas supplies and transport
such supplies on its system since 1986.)  As of the date of this report,
no other supplier has offered to provide service under the program.
Questar Gas expects to continue offering the program to its Wyoming
customers and hopes that it will provide valuable information about
customer preferences.

      The state of Utah and the PSCU are actively involved in reviewing
the restructuring and unbundling of telephone and electric utility
services.  Questar Gas monitors legislative and regulatory activities
focused on the unbundling of other utility services.  Given its
attractive rates and high customer-service ratings, the Company does not
believe that its residential customers will push for rapid unbundling of
gas utility service in Utah.

      As a public utility, Questar Gas is subject to the jurisdiction of
the PSCU and PSCW.  (The Company's customers in Idaho are served under
the provisions of its Utah tariff.  Pursuant to a special contract
between the PUCI and the PSCU, the rates for the Company's Idaho
customers are regulated by the PSCU.)  The Company's natural gas sales
and transportation services are provided under rate schedules approved
by the two regulatory commissions.

      Questar Gas has consistently endeavored to balance the costs of
adding more than 20,000 customers each year with the cost savings
associated with reducing labor costs, consolidating activities and
utilizing new technology.

      In December of 1999, Questar Gas was disappointed to receive an
order from the PSCU that denied its application to reflect certain
gas-processing costs in its pass-through proceedings.  The Company, in
order to give its customers time to adjust the combustion settings for
gas appliances in its service area to handle lower-Btu gas, determined
to enhance the Btu of such gas by contracting to have carbon dioxide
removed from it and agreeing to pay the costs associated with this
activity.  Questar Gas included the costs in its pass-through
application filed in June of 1999.

      The PSCU's order forced the Company to accelerate the timing of a
request for general rate relief.  Questar Gas filed an application with
the PSCU on December 17, 1999, requesting a total increase of $22.2
million and interim rate relief equal to the approximate amount of the
annual disallowance for gas processing costs.  The PSCU approved Questar
Gas's request for interim relief and permitted it  to collect an
annualized increase of $7.065 million, subject to refund, effective
January 1, 2000.

      In its general rate case application, Questar Gas is also
requesting a return on equity of 12 percent (compared to its current
return on equity of 11.3-11.5 percent).  It pointed out that it has been
15 years since it received a significant general rate increase and noted
that its net investment has increased by $305 million, its customer per
employee ratio has increased from 292 to 559, and its usage per customer
has decreased by 17 percent.  Hearings are scheduled to begin June 5,
2000.  Under Utah law, the PSCU has 240 days from the filing date--or
August 14, 2000--in which to consider Questar Gas's general rate case
application and issue an order concerning it.

      Questar Gas has also appealed the PSCU's decision denying it the
ability to collect the processing costs as part of its pass-through
proceedings.  This appeal was filed after the PSCU denied the Company's
request for a rehearing.

      Questar Gas supported legislative efforts to address regulatory
concerns in Utah.  The Utah state legislature recently adopted
legislation that directs the PSCU to balance the interests of customers
and investors, encourage rate-case settlements without protracted and
adversarial proceedings, and consider future "known and measurable"
changes when setting rates.  The legislation also consolidated two
regulatory agencies into one.  This legislation won't become effective
until July 1, 2001, and  won't affect the outcome of Questar Gas's
general rate case proceedings in 2000, but should provide for improved
regulatory processes in the future.

      During 1999, Questar Gas also filed a general rate application to
decrease its rates in Wyoming as a result of lower operating costs.
After public hearings, the PSCW permitted Questar Gas to continue
reflecting a return on equity of 11.83  percent in its Wyoming rates.
The PSCW also authorized the Company to reflect processing costs for
carbon dioxide removal in its rates.

      Both the PSCU and the PSCW have authorized the Company to use a
balancing account procedure for changes in the cost of natural gas,
including supplier non-gas costs, and to reflect changes at least as
frequently as semi-annually.  Questar Gas increased its rates effective
December 1, 1999, in both Utah and Wyoming to collect increased gas
costs.

      The Company also increased its Utah rates effective January 1,
2000, to reflect its interim general rate case order.  The typical
residential customer in Utah would have an annual bill of $611.19, using
rates in effect as of January 1, 2000, compared to an annual bill of
$564.56 using rates in effect as of July 1, 1999.

      Responsibility for gas acquisition activities involves inherent
risks of regulatory scrutiny.  The Company has been periodically
involved in regulatory proceedings in which the prudence of its gas
supply activities has been challenged  Until the recent case involving
processing costs, Questar Gas had successfully defended its activities
and had not incurred any significant disallowance of gas supply costs.

      Under Utah law, Questar Gas must report dividends paid on its
common stock to the PSCU and must allow at least 30 days between
declaring and paying dividends.  The PSCU can investigate any dividend
declared by the Company to determine if payment of such dividend would
impair its capital or service obligations.  The PSCW and the PUCI, but
not the PSCU, have jurisdiction to review the issuance of long-term
securities by Questar Gas.

      The PSCU and PSCW have jurisdiction to examine the Company's
relationships with its affiliates and the costs paid by the Company for
services rendered by or goods purchased from its affiliates.  A 1981
settlement agreement involving cost-of-service gas and defining certain
contractual obligations between the Company and Wexpro continues to be
monitored by the Division and its agents.

      The PSCU and PSCW have adopted regulations or issued orders that
affect the Company's business practices in such areas as main
extensions, credit and collection activities, and termination of service
standards.

Relationships with Affiliates

      The Company has significant business relationships with affiliated
companies.  The following diagram shows the corporate structure of the
Company and its primary affiliates:



Questar Corporation

     Questar Market Resources, Inc.

          Wexpro Company
          Questar Exploration and Production Company
          Questar Energy Trading Company
          Questar Gas Management Company

     Questar Regulated Services Company

          Questar Pipeline Company
          Questar Gas Company
          Questar Energy Services, Inc.

     Questar InfoComm, Inc.

      The Company's relationships with its primary affiliates are
described below.

      Questar Regulated Services Company.  The Company's direct parent,
QRS, is a subholding company that was created to link Questar Gas and
Questar Pipeline.  The same group of officers manages all entities
within the group.  QRS provides various services--administrative,
accounting, engineering, regulatory, legal--for all entities within it.
The creation of the Regulated Services group allowed its members to
lower administrative costs.

      Questar Pipeline Company.  Questar Pipeline owns a two-pronged
transmission system running from southwestern Wyoming and western
Colorado into the Company's Utah service area.  During the months of
December through February of 1999-2000, Questar Gas reserved about
848,000 Dth per day or 76 percent of Questar Pipeline's reserved
capacity.  On an ongoing basis, the Company has 800,000 Dth per day on
Questar Pipeline's system.

      Questar Gas transports both cost-of-service gas and purchased gas
on Questar Pipeline's transmission system.  (The Company also transports
gas volumes on the transmission systems owned by The Williams Companies,
Inc. and Colorado Interstate Gas Company.  Questar Gas purchases "city
gate" gas supplies from transportation customers on Kern River's
system.)  The Company releases its firm transportation capacity,
pursuant to capacity release procedures adopted by the Federal Energy
Regulatory Commission ("FERC"), when it does not need such service for
its sales customers.  Because Questar Gas has sufficient capacity on the
system to meet peak-demand periods, it has unused capacity for the
balance of the year.

      During 1999, Questar Pipeline transported 105.5 MMDth of gas for
Questar Gas, compared to 107.5 MMDth in 1998.  Under Questar Pipeline's
"straight fixed-variable" rate schedules, Questar Gas is obligated to
pay demand charges for firm capacity, regardless of the volumes actually
transported.  The Company, in 1999, paid approximately $50.7 million in
demand charges to Questar Pipeline for firm transportation capacity and
"no notice" transportation.  The Company's transportation agreement with
Questar Pipeline expires on June 30, 2002.

      Questar Gas purchases storage capacity at Clay Basin, a large
base-load storage facility operated by Questar Pipeline, and also has
peaking storage capacity at three additional storage reservoirs owned by
Questar Pipeline.  The Company paid Questar Pipeline $14.0 million in
demand charges during 1999 in connection with storage services.

      A subsidiary of Questar Pipeline also operates the processing
plant near Price, Utah, that removes the carbon dioxide from gas volumes
delivered to Questar Gas's system.  During the six months of 1999 that
the plant was in operation, the Company paid $3.6 million for services
provided at the plant.

      Questar Energy Services, Inc.  Effective January 1, 1999, Questar
Energy Services, Inc. ("QES") was transferred from Questar's Market
Resources unit to the Regulated Services unit.  QES provides energy
management equipment, installation and service contracts for commercial
and industrial customers and home security systems, service contracts,
and equipment financing to residential customers.  The Company allows
QES, for a fee, to advertise its products with bills sent to customers
and to invoice its customers on utility bills.

      Questar Gas Management Company.  Questar Gas Management Company
("QGM") owns the gathering facilities that were originally built to
gather production from the Company's cost-of-service properties.  During
1999, QGM gathered 32.1 MMDth of natural gas for Questar Gas, compared
to 29.9 MMDth in 1998.  During 1999, the Company paid $4.7 million for
demand charges in conjunction with gathering services.  Under the terms
of the gathering agreement between the parties, QGM will gather gas
volumes produced from cost-of-service properties for the life of such
properties and charge cost-of-service rates.

      Wexpro Company.  Wexpro, another company within Questar's Market
Resources segment, operates certain properties owned by Questar Gas.
Under the terms of a 1981 settlement agreement, which was approved by
the PSCU and PSCW and upheld by the Utah Supreme Court, the Company owns
gas produced from specified properties that were productive as of August
1, 1981 (the effective date of the settlement agreement).  Such gas is
reflected in rates at cost-of-service prices based on rates of return
established by the settlement agreement.  In addition, Wexpro conducts
development gas drilling for Questar Gas on specified properties and is
reimbursed for its costs plus a current rate of return of 21.7 percent
(adjusted annually using a specified formula) on its net investment in
such properties, adjusted for working capital and deferred taxes, if the
wells are successful.  Under the terms of the settlement agreement, the
costs of unsuccessful wells are borne by Wexpro.  The settlement
agreement also permits Questar Gas to share income from hydrocarbon
liquids produced from certain properties operated by Wexpro after Wexpro
recovers its expenses and a specified rate of return.  The income
received by Questar Gas from Wexpro is used to reduce natural gas costs
reflected in the Company's rates.

      Questar InfoComm, Inc.  The Company receives data processing and
telecommunication services from its affiliate, Questar InfoComm.  During
1999, Questar InfoComm assisted Questar Gas in a comprehensive project
to conduct the necessary testing and certification of systems for Year
2000 compliance.  Questar Gas is very dependent on a customer
information system and related software systems that are maintained by
Questar InfoComm.  Questar InfoComm's services have historically been
priced to recover operating expenses and a return on investment.  The
Company and Questar InfoComm are working together to move to a
market-oriented pricing structure.

      Other Affiliates.  In addition to QGM and Wexpro, the Market
Resources segment of Questar includes Questar Energy Trading and Questar
Exploration and Production Company.  Questar Gas does not have
significant business relationships with these entities.

      Questar, the Company's ultimate parent, provides certain
administrative services, e.g., public and government relations,
financial, and audit, to the Company and other members of the
consolidated group.  Questar also sponsors the qualified and welfare
benefit plans in which the Company's employees participate.  Questar Gas
is responsible for a proportionate share of the costs associated with
these services and benefit plans.

Employees

      As of December 31, 1999, the Company had 931 employees, compared
to 946 at year-end 1998.  Regulated Services, the Company's parent, has
431 employees (compared to 434 at year-end 1998) who perform specified
services, e.g., administrative, legal, accounting, budget, regulatory
affairs, for Questar Gas, Questar Pipeline and QES.  The Company's
employees are nonunion employees who are not represented under
collective bargaining agreements.  Employee relations are generally
deemed to be satisfactory.

Environmental Matters

      The Company is subject to the National Environmental Policy Act
and other federal and state legislation regulating the environmental
aspects of its operations.  Although Questar Gas does not believe that
environmental protection laws and regulations will have any material
effect on its competitive position, it does believe that such provisions
have added and will continue to add to the Company's expenditures and
annual maintenance and operating expenses.

      Questar Gas has an obligation to treat waste water and monitor the
effectiveness of an underground slurry wall that was constructed in 1988
at its operations center in Salt Lake City, Utah.  The slurry wall was
built to contain contaminants from an abandoned coal gasification plant
that operated on the site from 1908 to 1929.

      Questar Gas emphasizes the environmental advantages of natural
gas.  The Company's marketing campaigns have featured the clean-burning
characteristics of natural gas fireplaces.  Natural gas vehicles are
also being encouraged on the basis of environmental considerations.

Research and Development

      The Company conducts studies of gas conversion equipment, gas
piping, and engines using natural gas and has funded demonstration
projects using such equipment.  The total dollar amount spent by the
Company on research activities is not material.

ITEM 3.  LEGAL PROCEEDINGS

      Questar Gas is involved in various legal and regulatory
proceedings.  While it is not currently possible to predict or determine
the outcome of these proceedings, it is the opinion of management that
the outcome will not have a material adverse effect on the Company's
financial position or liquidity.

      As a result of acquiring Questar Pipeline's gas purchase
contracts, the Company is responsible for the judgment rendered against
Questar Pipeline (the named party) in a lawsuit that was tried before a
jury in Wyoming's federal district court in 1994.  The presiding judge
entered a judgment as a matter of law that vacated most portions of the
original jury verdict against Questar Pipeline.  The Tenth Circuit Court
of Appeals, in early 2000, reinstated some portions of the original jury
verdict.  Specifically, the appellate court reversed the trial court's
judgment on take-or-pay, breach of contract, intentional interference
with a contract, and price on deregulation claims.  The Tenth Circuit
upheld the district court's determinations on duty to decontrol, working
interest ownership, and stolen gas claims.

      Questar Gas has paid approximately $5.1 million to satisfy the
judgment; the producer has accepted the payment subject to his ongoing
dispute about its calculation.  The Company will include any amounts
that it pays to satisfy the judgment in its gas purchase balancing
account.

      The producer filed another case against the Company and its
affiliates in 1997.  This case includes claims of fraud and antitrust
violation in addition to the same claims heard in the first case for a
subsequent period of time.  The case, which was also filed in Wyoming's
federal district court, was stayed pending the Tenth Circuit's decision,
although the district court did rule favorably on some issues in a
partial summary judgment motion.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      The Company did not submit any matters to a vote of its
stockholders during the last quarter of 1999.


                                 Part II

ITEM 5.  MARKET FOR REGISTRANT'S EQUITY AND RELATED STOCKHOLDER MATTERS

      All of the Company's outstanding shares of common stock, $2.50 par
value, are owned by Regulated Services.  Information concerning the
dividends paid on such stock and the ability to pay dividends is
reported in the Statements of Common Shareholder's Equity and the Notes
to Financial Statements included in Item 8.

ITEM 6.  SELECTED FINANCIAL DATA

      The Company, as the wholly owned subsidiary of a reporting person,
is entitled to omit the information requested in this Item.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Natural Gas Distribution - Questar Gas conducts
natural gas distribution operations.  Following is
a summary of financial results and operating
information:
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                           1999        1998        1997
                                                       (Dollars In Thousands)
<S>                                                    <C>         <C>         <C>
OPERATING INCOME
Revenues
  Residential and commercial sales                        $396,882    $425,452    $399,174
  Industrial sales                                          28,938      29,555      24,459
  Industrial transportation                                  6,594       6,480       6,491
  Other                                                     17,523      15,336      18,099
        Total revenues                                     449,937     476,823     448,223
  Natural gas purchases                                    257,265     281,004     248,933
        Margin                                             192,672     195,819     199,290

Operating expenses
  Operating and maintenance                                103,308      96,923     101,719
  Depreciation and amortization                             36,426      33,261      31,160
  Other taxes                                                7,625       8,185       8,174
        Total expenses                                     147,359     138,369     141,053
          Operating income                                 $45,313     $57,450     $58,237

OPERATING STATISTICS
Natural gas volumes (in MDth)
  Residential and commercial sales                          82,201      83,231      85,747
  Industrial deliveries
    Sales                                                    9,823       9,681       9,523
    Transportation                                          51,643      55,461      51,313
      Total industrial                                      61,466      65,142      60,836
        Total deliveries                                   143,667     148,373     146,583
Natural gas revenue (per Dth)
  Residential and commercial                                 $4.83       $5.11       $4.66
  Industrial sales                                            2.95        3.05        2.57
  Transportation for industrial
   customers                                                  0.13        0.12        0.13
System natural gas cost (per Dth)                            $2.61       $2.57       $2.62
Heating degree days (normal 5,801)                           5,317       5,462       5,465
  Warmer than normal                                             8%          6%          6%
Number of customers at December 31,
   Residential and commercial                              684,950     662,084     640,496
   Industrial                                                1,367       1,308       1,200
                                                           686,317     663,392     641,696
</TABLE>

Questar Gas' operating income was 21% lower in 1999 when compared
with 1998 primarily due to lower gas usage per customer, higher
operating expenses to serve a rapidly growing customer base and a
disallowance of rate coverage in Utah of certain already incurred
gas-processing costs. The Public Service Commission of Utah (PSCU)
denied Questar Gas' request to recover $3.6 million of expenses
incurred in the second half of 1999 for the removal of carbon
dioxide from a portion of its gas supply. The Company asked for
recovery of these costs as part of its semiannual gas-cost filing.
The action of the PSCU, combined with lower usage per customer,
prompted Questar Gas to file a general rate case in December 1999.
The Company is seeking $22 million of rate relief for the impact of
lower usage per customer, gas processing costs, higher costs of
serving new customers and other costs. The Wyoming Public Service
Commission approved recovery of gas-processing costs.

As part of the Utah general rate case, Questar Gas requested and
received interim rate relief of $7.1 million effective January 1,
2000.  The interim rate relief will be collected subject to refund
pending the PSCU's final order that must be issued under state law
by August 14, 2000.

Usage per residential customer was two decatherms or 1.5% lower in
1999 compared with 1998 and ten decatherms or 7% lower in 1998
compared with 1997. Usage per customer is calculated on a
temperature-adjusted basis. Temperatures were warmer than normal in
1999. However, the financial impact of warmer weather has been
minimized because of a weather normalization adjustment in rates.
Questar Gas added 22,925 customers, resulting in a 3.5% growth rate
in 1999, and 21,696 customers, or a 3.4% growth rate in 1998.
Customer additions in 2000 are expected to reach 20,000 to 21,000.

Gas deliveries to industrial customers decreased by 6% in 1999 in
part because a major steel-producing customer reduced operations
and filed for protection under the bankruptcy laws. Industrial
deliveries increased in 1998 compared with 1997 due to the effects
of a strong regional economy. Margins from gas delivered to
industrial customers, either for gas sold or transported, are
substantially lower than from gas delivered to residential and
commercial customers.

Operating and maintenance expenses were 7% higher in 1999.
Increased costs associated with serving a growing number of
customers were partially offset by lower labor costs. Labor costs
were about $3 million lower in 1999 as a result of an early
retirement program effective July 31, 1998. Depreciation increased
10% in 1999, reflecting additional investment in facilities and
information-technology to serve a growing number of customers.

The effective income tax rate was 31.9% in 1999, 33.5% in 1998 and
31.7% in 1997. The effective income tax rate was below the combined
federal and state statutory rate of about 38% primarily due to
income tax credits related to production of gas from certain
properties. These credits amounted to $1,872,000 in 1999,
$2,217,000 in 1998 and $2,686,000 in 1997.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash provided from operating activities decreased in 1999
compared with 1998 due primarily to a collection of about $35
million of purchased-gas costs in 1998, which was not repeated in
1999.

Investing Activities

Following is a summary of capital expenditures for
1999 and 1998, and a forecast of 2000 expenditures.
<TABLE>
<CAPTION>
                                                          2000
                                                         Forecast      1999        1998
                                                                   (In Thousands)
<S>                                                    <C>         <C>         <C>
     New-customer service                                  $34,851     $40,632     $35,106
     Distribution system                                    10,787       9,445      15,338
     Computer software and hardware                          5,119       4,170      14,859
     General                                                12,528      14,200      11,025
                                                           $63,285     $68,447     $76,328
</TABLE>

Expansion of the distribution system in response to the rapid
growth in the number of customers was the focus of capital
spending.  The distribution system was extended by 720 miles of
main, feeder and service lines.

Financing Activities

Questar Gas generated sufficient net cash provided from operating
activities to fund 95% of its 1999 capital expenditures.  In
addition, the Company received a $40 million equity investment from
its parent company in 1999.   Forecasted 2000 capital expenditures
are expected to be financed with net cash provided from operations
and borrowings from Questar.

Questar makes loans to Questar Gas under a short-term borrowing
arrangement.  Short-term notes payable to Questar totaled $79.3
million at December 31, 1999 with an average interest rate of 6.61%
and $96.7 million at December 31, 1998 with an interest rate of
5.71%.

The Company typically has negative net working capital at December
31 because of short-term borrowings.  These borrowings are seasonal
and generally peak at the end of the year because of cold-weather
gas purchases.

Questar Gas' capital structure at December 31, 1999 was composed of
46% long-term debt and 54% common equity. Moody's and Standard and
Poor's have rated the Company's long-term debt A1 and A+,
respectively.

Year 2000

Questar Corporation established a team to address the issue of
computer programs and embedded computer chips being unable to
distinguish between the year 1900 and the year 2000 (Y2K).  The
team identified 55 projects among Questar and its affiliated
companies that were assessed, remediated, tested and determined to
be completed. In the process, Questar employees contacted more than
8,000 vendors and suppliers to assess their readiness to meet
obligations to Questar.  The cost of the Y2K project was
approximately $5.1 million and Questar Gas' portion was $2.2
million.

Questar did not experience a disruption of operations because of
Y2K.  Preparation for Y2K provided several benefits.  Questar
completed an inventory of its primary systems and a testing
laboratory.  Systems were tested and remediated where necessary.
The testing laboratory will become an important part of
information-technology management.  In response to the Y2K
challenge, business contingency plans were revised and successfully
tested.

Forward-Looking Statements

The Form 10-K contains forward-looking statements about future
operations, capital spending, regulatory matters and expectations
of Questar Gas. According to management, these statements are made
in good faith and are reasonable representations of the Company's
expected performance at the time. Actual results may vary from
management's stated expectations and projections due to a variety
of factors.

Important assumptions and other significant factors that could
cause actual results to differ materially from those discussed in
forward-looking statements include changes in general economic
conditions, gas prices and availability of gas supplies,
competition, regulatory issues, weather conditions and other
factors beyond the control of the Company.  These other factors
include the rate of inflation and adverse changes in the business
or financial condition of the Company.

These factors are not necessarily all of the important factors that
could cause actual results to differ significantly from those
expressed in any forward-looking statements.  Other unknown or
unpredictable factors could also have a significant adverse effect
on future results. The Company does not undertake an obligation to
update forward-looking information contained herein or elsewhere to
reflect actual results, changes in assumptions or changes in other
factors affecting such forward-looking information.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The Company's financial statements are included in Part IV, Item
14, herein.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

      Questar Gas has not changed its independent auditors or had any
disagreements with them concerning accounting matters and financial
statement disclosures within the last 24 months.


                                PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The Company, as the wholly owned subsidiary of a reporting person,
is entitled to omit all information requested in PART III (Items 10-13).


                                 PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K

      (a)(1)(2)  Financial Statements and Financial Statement Schedules.
The financial statements identified in the List of Financial Statements
are filed as part of this report.

         (3)  Exhibits.  The following is a list of exhibits required to
be filed as a part of this report in Item 14(c).

Exhibit No.                      Exhibit

  3.1.*  Restated Consolidated Articles of Incorporation dated August
         15, 1980.  (Exhibit No. 4(a) to Registration Statement No.
         2-70087, filed December 1, 1980.)

  3.2.*  Certificate of Amendment to Restated Consolidated Articles of
         Incorporation dated May 13, 1982.  (Exhibit No. 3(b) to Form
         10-K Annual Report for 1982.)

  3.3.*  Certificate of Amendment to Restated Consolidated Articles of
         Incorporation dated May 10, 1983.  (Included in Exhibit No.
         4.1. to Registration Statement No. 2-84713, filed June 23,
         1983.)

  3.4.*  Certificate of Amendment to Restated Consolidated Articles of
         Incorporation dated August 16, 1983.  (Exhibit No. 3(a) to Form
         8 Report amending the Company's Form 10-Q Report for Quarter
         Ended September 30, 1983.)

  3.5.*  Certificate of Amendment to Restated Consolidated Articles of
         Incorporation dated October 26, 1984.  (Exhibit No. 3.5. to
         Form 10-K Annual Report for 1984.)

  3.6.*  Certificate of Amendment to Restated Consolidated Articles of
         Incorporation dated May 13, 1985.  (Exhibit No. 3.1. to Form
         10-Q Report for Quarter Ended June 30, 1985.)

  3.7.*  Articles of Amendment to Restated Consolidated Articles of
         Incorporation dated February 10, 1988.  (Exhibit No. 3.7. to
         Form 10-K Annual Report for 1987.)

  3.8.*  Articles of Amendment to Restated Consolidated Articles of
         Incorporation dated December 31, 1997.  (Exhibit No. 3.7. to
         Form 8-K Current Report for December 31, 1997.)

  3.9.*  Bylaws (as amended effective August 11, 1992).  (Exhibit No.
         3.8. to Form 10-K Annual Report for 1992.)

  4.*1   Indenture dated as of May 1, 1992, between the Company and
         Citibank, as trustee, for the Company's Debt Securities.
         (Exhibit No. 4. to Form 10-Q Report for Quarter Ended June 30,
         1992.)

  10.1.*2Stipulations and Agreement, dated October 14, 1981, executed by
         Mountain Fuel Supply Company; Wexpro Company; the Utah
         Department of Business Regulations, Division of Public
         Utilities; the Utah Committee of Consumer Services; and the
         staff of the Public Service Commission of Wyoming.  (Exhibit
         No. 10(a) to Form 10-K Annual Report for 1981.)

  10.2.*3Joint Annual Management Incentive Plan adopted by Questar Gas
         Company, Questar Pipeline Company, and Questar Regulated
         Services Company as amended and restated effective May 18,
         1999.  (Exhibit No. 10.1. to Form 10-Q Report for Quarter Ended
         June 30, 1999.)

  10.3.*2,3Mountain Fuel Supply Company Window Period Supplemental
           Executive Retirement Plan effective January 24, 1991.  (Exhibit
           No. 10.9. to Form 10-K Annual Report for 1990.)

  10.4.*2,3Questar Gas Company Deferred Compensation Plan for Directors
           as amended and restated effective May 19, 1998.  (Exhibit No.
           10.2. to Form 10-Q Report for Quarter Ended June 30, 1998.)

  10.5.*2Gas Gathering Agreement between Mountain Fuel Supply Company
         and Questar Pipeline Company effective September 1, 1993.
         (This agreement has been transferred to Questar Gas Management
         Company.)  (Exhibit No. 10.11. to Form 10-K Annual Report for
         1994.)

  10.6.*2Amendment to Gas Gathering Agreement between Mountain Fuel
         Supply Company and Questar Gas Management Company effective
         September 1, 1997.

  24.    Power of Attorney.

  27.    Financial Data Schedule.
_______________________

     *Exhibits so marked have been filed with the Securities and
Exchange Commission as part of the referenced filing and are
incorporated herein by reference.

     1First Security Bank, N.A. serves as the successor trustee.

     2This document has not been formally amended to refer to the
      Company's current name.

     3Exhibit so marked is a management contract or compensation plan or
      arrangement.

     (b) Questar Gas Company filed a Current Report on Form 8-K dated
December 8, 1999, reporting the decision rendered by the PSCU denying
the Company's application to include certain processing costs in costs
that are passed through to customers.


                       ANNUAL REPORT ON FORM 10-K

                 ITEM 8, ITEM 14(a) (1) and (2), and (d)

                      LIST OF FINANCIAL STATEMENTS

               FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                      YEAR ENDED DECEMBER 31, 1999

                           QUESTAR GAS COMPANY

                          SALT LAKE CITY, UTAH

FORM 10-K -- ITEM 14 (a) (1) AND (2)

QUESTAR GAS COMPANY

LIST OF FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT SCHEDULES

The following financial statements of Questar Gas Company are included
in Item 8:

      Statements of income, Years ended December 31, 1999, 1998 and 1997

      Balance sheets, December 31, 1999 and 1998

      Statements of common shareholder's equity, Years ended December
      31, 1999, 1998 and 1997

      Statements of cash flows, Years ended December 31, 1999, 1998 and
      1997

      Notes to financial statements

Financial statement schedules, for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission, are not required under the related instructions or are
inapplicable, and therefore have been omitted.

                     Report of Independent Auditors

Board of Directors
Questar Gas Company

We have audited the accompanying balance sheets of Questar Gas Company
as of December 31, 1999 and 1998, and the related statements of income
and common shareholder's equity and cash flows for each of the three
years in the period ended December 31, 1999.  These financial statements
are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on our
audits.

We conducted our audits in accordance with audit standards generally
accepted in the United States.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Questar Gas
Company at December 31, 1999 and 1998, and the results of its operations
and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally
accepted in the United States.

                                             /s/ Ernst & Young


Salt Lake City, Utah
February 7, 2000

QUESTAR GAS COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                           1999         1998         1997
                                                                   (In Thousands)
<S>                                                    <C>         <C>           <C>
REVENUES
  From unaffiliated customers                             $447,606      $475,754    $445,684
  From affiliated companies                                  2,331         1,069       2,539
                                                           449,937       476,823     448,223

OPERATING EXPENSES
  Natural gas purchases
    From affiliated companies                              150,960       142,699     137,062
    From unaffiliated parties                              106,305       138,305     111,871
      Total natural gas purchases                          257,265       281,004     248,933
  Operating and maintenance                                103,308        96,923     101,719
  Depreciation and amortization                             36,426        33,261      31,160
  Other taxes                                                7,625         8,185       8,174

    TOTAL OPERATING EXPENSES                               404,624       419,373     389,986

    OPERATING INCOME                                        45,313        57,450      58,237

INTEREST AND OTHER INCOME                                    2,980         3,566       3,388

DEBT EXPENSE                                               (20,062)      (19,792)    (19,119)

    INCOME BEFORE INCOME TAXES                              28,231        41,224      42,506

INCOME TAXES                                                 9,012        13,816      13,492

    NET INCOME                                             $19,219       $27,408     $29,014

</TABLE>
See notes to financial statements.
<PAGE>

QUESTAR GAS COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
                                                                    December 31,
                                                                        1999         1998
                                                                   (In Thousands)
<S>                                                                <C>           <C>
CURRENT ASSETS
  Cash and short-term investments                                         $1,708      $3,326
  Accounts receivable                                                     44,549      43,280
  Unbilled gas accounts receivable                                        37,287      36,444
  Accounts receivable from affiliates                                      1,262         788
  Inventories, at lower of average cost or market
    Gas stored underground                                                18,497      18,248
    Materials and supplies                                                 3,183       4,048
      Total inventories                                                   21,680      22,296
  Purchased-gas adjustments                                                  432       2,067
  Prepaid expenses and deposits                                            3,168       2,838
    TOTAL CURRENT ASSETS                                                 110,086     111,039

PROPERTY, PLANT AND EQUIPMENT
  Distribution                                                           725,874     685,710
  Production                                                              97,870      97,870
  General                                                                121,421     115,117
  Construction in progress                                                68,434      49,583
                                                                       1,013,599     948,280
  Less allowances for depreciation
   and amortization                                                      421,111     382,657
    NET PROPERTY, PLANT AND EQUIPMENT                                    592,488     565,623

OTHER ASSETS
  Income taxes recoverable from customers                                  7,304       5,050
  Unamortized costs of reacquired debt                                     8,115       8,609
  Other                                                                    5,559      10,194
    TOTAL OTHER ASSETS                                                    20,978      23,853

                                                                        $723,552    $700,515
</TABLE>
<PAGE>

LIABILITIES AND SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
                                                                    December 31,
                                                                        1999         1998
                                                                   (In Thousands)
<S>                                                                <C>           <C>
CURRENT LIABILITIES
  Notes payable to Questar                                               $79,300     $96,700
  Accounts payable and accrued expenses
    Accounts and other payables                                           34,369      41,756
    Accounts payable to affiliates                                        22,396      17,240
    Federal income taxes                                                   2,966       2,113
    Other taxes                                                            4,915       5,612
    Interest                                                               4,476       4,567
      Total accounts payable and
       accrued expenses                                                   69,122      71,288
    TOTAL CURRENT LIABILITIES                                            148,422     167,988

LONG-TERM DEBT                                                           225,000     225,000

OTHER LIABILITIES                                                          1,394         330

DEFERRED INVESTMENT TAX CREDITS                                            5,630       6,011

DEFERRED INCOME TAXES                                                     79,713      74,012

COMMITMENTS AND CONTINGENCIES - Note 6

COMMON SHAREHOLDER'S EQUITY
  Common stock - par value $2.50 per share;
  authorized 50 million shares; 9,189,626
  issued and outstanding                                                  22,974      22,974
  Additional paid-in capital                                              81,875      41,875
  Retained earnings                                                      158,544     162,325
    TOTAL COMMON SHAREHOLDER'S EQUITY                                    263,393     227,174

                                                                        $723,552    $700,515
</TABLE>
See notes to financial statements.
<PAGE>

QUESTAR GAS COMPANY
STATEMENTS OF COMMON SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
                                                                     Additional
                                                          Common      Paid-in      Retained
                                                          Stock       Capital      Earnings
                                                                   (In Thousands)
<S>                                                    <C>         <C>           <C>
Balances at January 1, 1997                                $22,974       $41,875    $151,393
  1997 net income                                                                     29,014
  Payment of dividends
    Preferred stock                                                                     (192)
    Common stock                                                                     (22,750)
  Premium paid on retired
   preferred stock                                                                       (48)
Balances at December 31, 1997                               22,974        41,875     157,417
  1998 net income                                                                     27,408
  Payment of dividends                                                               (22,500)
Balances at December 31, 1998                               22,974        41,875     162,325
  1999 net income                                                                     19,219
  Capital contribution                                                    40,000
  Payment of dividends                                                               (23,000)
Balances at December 31, 1999                              $22,974       $81,875    $158,544

</TABLE>
See notes to financial statements.
<PAGE>

QUESTAR GAS COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                           1999         1998         1997
                                                       (In Thousand)
<S>                                                    <C>         <C>           <C>
OPERATING ACTIVITIES
  Net income                                               $19,219       $27,408     $29,014
  Depreciation and amortization                             39,479        35,772      33,739
  Deferred income taxes                                      5,701        (6,705)      6,180
  Deferred investment tax credits                             (381)         (381)       (382)
                                                            64,018        56,094      68,551
  Changes in operating assets and
      liabilities
    Accounts receivable                                     (2,586)        5,975     (24,425)
    Inventories                                                616        (1,949)     (5,052)
    Prepaid expenses and deposits                             (330)        1,518         155
    Accounts payable and
     accrued expenses                                       (3,019)        7,800      (5,183)
    Federal income taxes                                       853          (999)      4,221
    Purchased-gas adjustments                                1,635        35,184     (13,041)
    Other                                                    3,939        (8,024)     (3,722)
    NET CASH PROVIDED FROM
       OPERATING ACTIVITIES                                 65,126        95,599      21,504

INVESTING ACTIVITIES
  Capital expenditures                                     (68,447)      (76,328)    (65,375)
  Proceeds from disposition of property,
    plant and equipment                                      2,103         3,108       2,761
     NET CASH USED IN INVESTING
       ACTIVITIES                                          (66,344)      (73,220)    (62,614)

FINANCING ACTIVITIES
  Redemption of preferred stock                                                       (4,876)
  Issuance of long-term debt                                                          50,000
  Capital contribution                                      40,000
  Change in notes payable to Questar                       (17,400)       (3,300)     23,800
  Payment of dividends                                     (23,000)      (22,500)    (22,942)
    NET CASH PROVIDED FROM (USED IN)
      FINANCING ACTIVITIES                                    (400)      (25,800)     45,982
    Change in cash and short-term
       investments                                          (1,618)       (3,421)      4,872
Beginning cash and short-term
  investments                                                3,326         6,747       1,875
    ENDING CASH AND SHORT-TERM
       INVESTMENTS                                          $1,708        $3,326      $6,747
</TABLE>
See notes to financial statements.
<PAGE>

QUESTAR GAS COMPANY
NOTES TO FINANCIAL STATEMENTS

Note 1 - Summary of Accounting Policies

Questar Gas Company (the Company or Questar Gas), is a wholly-owned
subsidiary of Questar Regulated Services Company (Regulated
Services).  Regulated Services is a holding company and
wholly-owned subsidiary of Questar Corporation (Questar). Regulated
Services was organized in 1996 and provides administrative,
accounting, engineering, legal and regulatory functions for its
three subsidiaries, Questar Gas, Questar Pipeline Company (Questar
Pipeline) and Questar Energy Service. Significant accounting
policies are presented below.

Business and Regulation:  Questar Gas distributes natural gas to
residential, commercial and industrial customers.  The Company is
regulated by the Public Service Commission of Utah (PSCU) and the
Public Service Commission of Wyoming (PSCW). While Questar Gas also
serves a small area of southeastern Idaho, the Public Utilities
Commission of Idaho has deferred to the PSCU for rate oversight of
this area. These regulatory agencies establish rates for the sale
and transportation of natural gas.  The regulatory agencies also
regulate, among other things, the extension and enlargement or
abandonment of jurisdictional natural gas facilities.  Regulation
is intended to permit the recovery, through rates, of the cost of
service including a rate of return on investment.

The financial statements are presented in accordance with
regulatory requirements. Methods of allocating costs to time
periods, in order to match revenues and expenses, may differ from
those of nonregulated businesses because of cost-allocation methods
used in establishing rates.

Use of Estimates:  The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
amounts of assets and liabilities and disclosure of contingent
liabilities reported in the financial statements and accompanying
notes.   Actual results could differ from those estimates.

Revenue Recognition:   Revenues are recognized in the period that
services are provided or products are delivered.   Questar Gas
accrues gas-distribution revenues for gas delivered to residential
and commercial customers but not billed at the end of the
accounting period.

Purchased-Gas Adjustments:  Questar Gas accounts for purchased-gas
costs in accordance with procedures authorized by the PSCU and PSCW
under which purchased-gas costs that are different from those
provided for in the present rates are accumulated and recovered or
credited through future rate changes.

Cash and Short-Term Investments:  Short-term investments consist
principally of repurchase agreements with maturities of three
months or less.

Property, Plant and Equipment:  Property, plant and equipment are
stated at cost.  The provision for depreciation and amortization is
based upon rates which will systematically charge the costs of
assets over their estimated useful lives.  The costs of natural gas
distribution property, plant and equipment, excluding gas wells,
are amortized using the straight-line method ranging from 3% to 33%
per year and averaging 4.2% in 1999. The costs of gas wells were
amortized using the units-of-production method at $.15 per Mcf of
natural gas production in 1999.

Allowance for Funds Used During Construction:  The Company
capitalized the cost of capital during the construction period of
plant and equipment using a method required by regulatory
authorities amounting to $358,000 in 1999, $797,000 in 1998 and
$261,000 in 1997.

Reacquisition of Debt:  Gains and losses on the reacquisition of
debt are deferred and amortized as debt expense over the life of
the replacement debt in order to match regulatory treatment.

Income Taxes:  Questar Gas records cumulative increases in deferred
taxes as income taxes recoverable from customers.  The Company has
adopted procedures with its regulatory commissions to include
under-provided deferred taxes in customer rates on a systematic
basis.  Questar Gas uses the deferral method to account for
investment-tax credits as required by regulatory commissions. The
Company's operations are consolidated with those of Questar and its
subsidiaries for income tax purposes.  The income tax arrangement
between Questar Gas and Questar provides that amounts paid to or
received from Questar are substantially the same as would be paid
or received by the Company if it filed a separate return.  Questar
Gas also receives payment for tax benefits used in the consolidated
tax return even if such benefits would not have been usable had the
Company filed a separate return.

Note 2 - Debt

Questar makes loans to Questar Gas under a short-term borrowing
arrangement.  Short-term notes payable to Questar totaled $79.3
million at December 31, 1999 with an average interest rate of 6.61%
and $96.7 million at December 31, 1998 with an interest rate of
5.71%.

Questar Gas' long-term debt consists of medium-term notes with
interest rates ranging from 6.85% to 8.43%, due 2007 to 2024. There
are no maturities of long-term debt for the five years following
December 31, 1999 and no long-term debt provisions restricting the
payment of dividends.

Cash paid for interest was $19,906,000 in 1999, $19,963,000 in 1998
and  $17,933,000 in 1997.

Note 3 - Financial Instruments and Credit Management

The carrying amounts and estimated fair values of
the Company's financial instruments were as
follows:
<TABLE>
<CAPTION>
                                                       December 31, 1999         December 31, 1998
                                                          Book       Estimated      Book       Estimated
                                                          Value      Fair Value     Value     Fair Value
                                                                   (In Thousands)
<S>                                                    <C>         <C>           <C>         <C>
Financial assets
    Cash and short-term investments                         $1,708        $1,708      $3,326       $3,326
Financial liabilities
    Short-term loans                                        79,300        79,300      96,700       96,700
    Long-term debt                                         225,000       222,582     225,000      257,766

</TABLE>

The Company used the following methods and assumptions in
estimating fair values:  (1) Cash and short-term investments, and
short-term loans - book value approximates fair value; (2)
Long-term debt - the fair value of the medium-term notes is based
on the discounted present value of cash flows using the Company's
current borrowing rates.   Fair value is calculated at a point in
time and does not represent what the Company would pay to retire
the debt securities.

Credit Risk:  Questar Gas' primary market area is the Rocky
Mountain region of the United States. Exposure to credit risk may
be impacted by the concentration of customers in this region due to
changes in economic or other conditions.  Customers include
individuals and numerous industries that may be affected
differently by changing conditions. Management believes that its
credit-review procedures, loss reserves, customer deposits and
collection procedures have adequately provided for usual and
customary credit-related losses.

Note 4 - Income Taxes

The components of income taxes were as follows:
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                           1999         1998         1997
                                                       (In Thousands)
<S>                                                    <C>         <C>           <C>
Federal
  Current                                                     $935       $16,773      $5,334
  Deferred                                                   6,948        (5,057)      6,636
State
  Current                                                    1,233         2,876       1,107
  Deferred                                                     277          (395)        797
Deferred investment tax credits                               (381)         (381)       (382)
                                                            $9,012       $13,816     $13,492
</TABLE>

The difference between income tax expense and the
tax computed by applying the statutory federal
income tax rate of 35% to income before income
taxes is explained as follows:
<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                           1999         1998         1997
                                                       (In Thousands)
<S>                                                    <C>         <C>           <C>
  Income before income taxes                               $28,231       $41,224     $42,506

  Federal income taxes at statutory rate                    $9,881       $14,428     $14,877
  State income taxes, net of federal
    income tax benefit                                         982         1,613       1,155
  Tight-sands gas production credits                        (1,872)       (2,217)     (2,686)
  Investment-tax credits                                      (381)         (381)       (382)
  Deferred taxes related to regulated
    assets for which deferred taxes were
    not provided in prior years                                921           922         921
  Other                                                       (519)         (549)       (393)
    Income tax expense                                      $9,012       $13,816     $13,492

Effective income tax rate                                     31.9%         33.5%       31.7%
</TABLE>

Significant components of the Company's deferred
tax liabilities and assets were as follows:
<TABLE>
<CAPTION>
                                                       December 31,
                                                           1999         1998
                                                       (In Thousands)
<S>                                                    <C>         <C>
Deferred tax liabilities
  Property, plant and equipment                            $77,655       $77,519
  Other                                                      6,433         7,491
    Total deferred tax liabilities                          84,088        85,010

Deferred tax assets
  Alternative minimum tax and production
    credit carryovers                                                      6,056
  Deferred ITC and other                                     4,375         4,942
    Total deferred tax assets                                4,375        10,998
       Net deferred tax liabilities                        $79,713       $74,012
</TABLE>

Cash paid for income taxes was $2,133,000 in 1999,
$18,985,000 in 1998 and $1,516,000 in 1997.

Note 5 - Rate Matters

In a gas-cost pass-through filing, the Public Service Commission of
Utah (PSCU) denied on December 3, 1999, Questar Gas' request to
recover, as part of its gas costs, the cost of removing carbon
dioxide from gas processed at a new plant constructed and operated
by an affiliated company. Some of the natural gas Questar Gas
delivers to its customers must be processed to remove carbon
dioxide, ensuring a natural gas composition that can operate safely
and efficiently in customers' appliances.  These gas-processing
costs were estimated at about $7.5 million annually.  Questar Gas
has since included gas-processing costs in a general rate case
filed December 17, 1999.  Questar Gas has filed an appeal of the
PSCU's decision with the Utah Supreme Court.

The PSCU on November 12, 1999 approved on an interim basis an
annualized gas cost increase of approximately $36.9 million
effective December 1, 1999.   However, the PSCU disallowed rate
coverage for $3.6 million of processing charges incurred in 1999 on
the basis that these costs are more appropriately considered in a
general rate case.

Questar Gas filed a general rate case December 17, 1999 requesting
$22 million of general rate relief and also asked for $7.1 million
of interim rate relief.  Higher costs of serving customers,
inclusion of charges for the removal of carbon dioxide from part of
the gas supply and lower gas usage per customer were cited among
the reasons for requesting rate relief.  The PSCU granted $7.1
million of interim rate relief effective January 1, 2000.  Hearings
have been scheduled for June 5 through June 7 of 2000.  The interim
relief is subject to refund, pending the commission's final order
that must be issued by August 2000. Questar Gas last filed a full
general rate case in 1995.

The Public Service Commission of Wyoming (PSCW) in February 2000
reaffirmed Questar's 11.83% authorized return on equity in a
general rate case filing and approved the Company's request for a
$377,000 rate reduction.  The PSCW's rate-ruling also allowed the
Company to transfer the recovery of gas-processing costs from gas
costs to general rates beginning April 2000.  Cost efficiencies and
slower population growth in Wyoming compared with Utah, enabled
Questar Gas to reduce its rates in Wyoming.

The Utah legislature enacted major legislation that will
restructure the state's regulatory process. The legislation creates
a clear public policy to balance the needs of consumers for safe,
reliable utility services at a fair price with the utilities' needs
to earn fair, competitive returns. The regulatory process will be
streamlined through the merging of the Division of Public Utilities
and the Committee of Consumer Services into a new organization, the
Office of Public Advocate. The legislation establishes a settlement
process that encourages more settlements of rate matters. The
legislation also requires that post test-year known and measurable
changes of test year information be taken into consideration in
setting rates. The legislation will not go into effect until July 1,
2001.

Note 6 - Litigation and Commitments

Questar and its affiliates are involved in several cases filed by
an independent producer, Jack Grynberg. The first case resulted in
an adverse jury verdict in 1994; the presiding federal district
court judge in Wyoming entered a judgment as a matter of law that
vacated most portions of the original jury verdicts. The Tenth
Circuit Court of Appeals, in January of 2000, reinstated some
portions of the original jury verdict. Specifically, the appellate
court reversed the trial court's judgment on take-or-pay, breach of
contract, intentional interference with a contract, and price on
deregulation claims.  The Tenth Circuit upheld the district court's
determination on duty to decontrol, working interest ownership, and
stolen gas claims.

Questar Gas, as a result of acquiring  Questar Pipeline's gas
purchase contracts, is liable for the judgment, which it estimates
at $5.1 million, when interest is added to the portions of the jury
verdict that were reinstated on appeal.  Questar Gas will account
for the amounts that it is required to pay to Grynberg in its gas
purchase balancing account.

Grynberg filed a second case before the same federal district court
in 1997, alleging new claims, including antitrust and fraud, in
addition to the same claims raised in the initial litigation for a
later period of time. This case has been stayed pending the outcome
of the Tenth Circuit appeal, although the district court did rule
favorably on Questar's motion for a partial summary judgment.

Questar affiliates are also named defendants in a lawsuit filed by
Grynberg under the Federal False Claims Act.  This case and the 75
substantially similar cases filed by Grynberg against pipelines and
their affiliates have been consolidated for discovery and pre-trial
rulings in Wyoming federal district court. The cases involve
allegations of industry-wide mismanagement of the value of gas on
which royalty payments are due the federal government.  The
complaint also seeks treble damages and imposition of civil
penalties.

It is too early to estimate the outcome of the various cases filed
by Grynberg against Questar affiliates, with the exception of the
first case that has been resolved by the Tenth Circuit.

There are various legal proceedings against the Company.  While it
is not currently possible to predict or determine the outcomes of
these proceedings, it is the opinion of management that the
outcomes will not have a material adverse effect on the Company's
results of operations, financial position or liquidity.

Questar Gas employs a diversified gas supply portfolio comprised of
company-owned gas reserves and purchases from other suppliers.
Historically, company-owned reserves have accounted for 45% to 50%
of the yearly gas supply needs. The remaining gas supply is
purchased predominately using one-year contracts which are
renegotiated each year prior to the heating season.  In addition,
Questar Gas makes use of various storage arrangements to meet peak
gas demand during certain times of the heating season. Each year,
Questar Gas purchases significant quantities of natural gas under
numerous gas-purchase contracts with varying terms and conditions.
Purchases under these agreements totaled  $93 million in 1999, $100
million in 1998 and $122.1 million in 1997.

Note 7 - Employee Benefits

Pension Plan:  Substantially all of Questar Gas' employees are
covered by Questar's defined benefit pension plan. Benefits are
generally based on years of service and the employee's 72
pay-period interval of highest earnings during the 10 years
preceding retirement.  It is Questar's policy to make contributions
to the plan at least sufficient to meet the minimum funding
requirements of applicable laws and regulations. Plan assets
consist principally of equity securities and corporate and U.S.
government debt obligations.

Questar Gas' portion of plan assets and benefit obligations is not
determinable because the plan assets are not segregated or
restricted to meet the Company's pension obligations.  If the
Company were to withdraw from the pension plan, the pension
obligation for the Company's employees would be retained by the
pension plan.  At December 31, 1999, Questar's fair value of plan
assets exceeded the accumulated benefit obligation.

Eligible employees in Regulated Services were offered an
early-retirement program that was effective July 31, 1998.
Enhanced benefits were paid to 178 employees taking advantage of
the offer.   Costs associated with the early-retirement program are
being amortized over a five-year period in accordance with past
regulatory treatment.

Pension expense was $1,735,000 in 1999, $1,865,000 in 1998 and
$1,847,000 in 1997.

Postretirement Benefits Other Than Pensions: Generally
postretirement health-care benefits and life insurance are provided
only to employees hired before January 1, 1997.  Questar Gas pays a
portion of postretirement health-care costs benefits as determined
by an employee's years of service and limited to 170% of the 1992
contribution. The Company's policy is to fund amounts allowable for
tax deduction under the Internal Revenue Code. Plan assets consist
of equity securities, and corporate and U.S. government debt
obligations. The Company is amortizing the transition obligation
over a 20-year period, which began in 1992.  The cost of
postretirement benefits other than pensions was $1,150,000 in 1999,
$1,844,000 in 1998 and $1,993,000 in 1997.  Both the PSCU and the
PSCW allow Questar Gas to recover these costs if the amounts are
funded in an external trust.

The Company's portion of plan assets and benefit obligations
related to postretirement medical and life insurance benefits is
not determinable because the plan assets are not segregated or
restricted to meet the Company's obligations.

Postemployment Benefits:  The Company recognizes the net present
value of the liability for postemployment benefits, such as
long-term disability benefits and health-care and life-insurance
costs, when employees become eligible for such benefits.
Postemployment benefits are paid to former employees after
employment has been terminated but before retirement benefits are
paid. The Company accrues both current and future costs. The PSCU
and the PSCW have allowed Questar Gas to recover postemployment
costs that were accumulated through December 31, 1994 in future
rates.  At December 31, 1999, the Company had a $520,000 regulatory
asset that it is amortizing over the next five years.

Employee Investment Plan:  Questar Gas participates in Questar's
Employee Investment Plan (ESOP), which allows eligible employees to
purchase Questar common stock or other investments through payroll
deduction.  The Company makes contributions of Questar common stock
to the ESOP of approximately 80%, 75% prior to 1999, of the
employees' eligible purchases and contributes an additional $200 of
common stock in the name of each eligible employee. The Company's
expense and contribution to the plan was $1,596,000 in 1999,
$1,616,000 in 1998 and $1,552,000 in 1997.

Note 8 - Related Party Transactions

Regulated Services provides administrative, technical and
accounting support to Questar Gas. The cost of this support was
$37,534,000 in 1999, $24,935,000 in 1998 and $26,061,000 in 1997.
The majority of these costs are allocated and included in operating
and maintenance expenses.  The allocation methods are based on
several methods dictated by the nature of the charges. Management
believes that the allocation methods are reasonable.

Questar Gas has reserved transportation capacity on Questar
Pipeline's system of approximately 848,000 decatherms per day and
paid an annual demand charge of approximately $50.7 million for
this reservation. Questar Gas releases excess capacity to its
industrial transportation or other customers and receives a credit
from Questar Pipeline for the released-capacity revenues and a
portion of Questar Pipeline's interruptible-transportation
revenues. Questar Gas paid for transportation, storage and
processing services provided by Questar Pipeline and a subsidiary
amounting to $71,636,000 in 1999, $67,528,000 in 1998 and
$64,924,000 in 1997, which included demand charges.  The costs of
these services were included in natural gas purchases.

Wexpro, an affiliated company, operates certain properties owned by
Questar Gas under the terms of the Wexpro Settlement Agreement.
The Company receives a portion of Wexpro's income from oil
operations after recovery of Wexpro's operating expenses and a
return on investment.  This amount, which is included in revenues
and reduces amounts billed to gas distribution customers, was
$2,306,000 in 1999, $1,050,000 in 1998 and $2,347,000 in 1997.
Questar Gas paid Wexpro for the operation of gas properties owned
by Questar Gas. These costs are included in natural gas purchases
and amounted to $62,299,000 in 1999, $58,482,000 in 1998 and
$49,887,000 in 1997.

Also included in natural gas purchases are amounts paid to Questar
Gas Management, an affiliate, for gathering of Company-owned gas
and purchased gas. These costs amounted to $9,045,000 in 1999,
$9,047,000 in 1998 and $12,472,000 in 1997. Questar Gas purchased
various other field-related services from Questar Gas Management
amounting to $755,000 in 1999, $418,000 in 1998 and $1,167,000 in
1997.

Questar Gas purchased noncost-of-service gas from Wexpro amounting
to $30,000 in 1999, $99,000 in 1998 and $133,000 in 1997.  Also,
Questar Gas purchased gas from Questar Energy Trading amounting to
$7,190,000 in 1999,  $7,125,000 in 1998 and $9,078,000 in 1997.

Questar Gas has a 12-year lease with an option to renew with an
affiliate for some space in an office building located in Salt Lake
City, Utah. The annual lease payment in 1999 and for the next four
years is $1,155,000.

Questar InfoComm Inc. is an affiliated company that provides data
processing and communication services to Questar Gas.  Direct
charges paid by the Company to Questar InfoComm were $13,700,000 in
1999, $16,480,000 in 1998 and $19,875,000 in 1997.

Questar charged Questar Gas for certain administrative functions
amounting to $4,981,000 in 1999, $4,714,000 in 1998 and $5,518,000
in 1997. These costs are included in operating and maintenance
expenses and are allocated based on each affiliated company's
proportional share of revenues less product costs; property, plant
and equipment; and labor costs.  Management believes that the
allocation method is reasonable.

Questar Gas incurred debt expense to Questar of $1,922,000 in 1999,
$2,403,000 in 1998 and $3,575,000 in 1997. The Company received
interest income from affiliated companies of $12,000 in 1999 and
$126,000 in 1997.

Note 9 - Oil and Gas Producing Activities (Unaudited)

The following information discusses the Company's oil and gas
producing activities.  All of the properties are cost-of-service
properties with the return on investment established by state
regulatory agencies. Questar Gas has not incurred any costs for oil
and gas producing activities for the three years ended December 31,
1999. The Company owns an interest in 495 gas wells, 196 on a net
interest basis.   Three gross-count wells have multiple
completions.  Wexpro develops and produces gas reserves owned by
the Company.  See Note 8 for the amounts paid by Questar Gas to
Wexpro.

Estimated Quantities of Proved Oil and Gas Reserves:  The following
estimates were made by Questar's reservoir engineers.  Reserve
estimates are based on a complex and highly interpretive process
which is subject to continuous revision as additional production
and development drilling information becomes available.  The
quantities are based on existing economic and operating conditions
using current prices and operating costs. All oil and gas reserves
reported are located in the United States.  Questar Gas does not
have any long-term supply contracts with foreign governments or
reserves of equity investees. No estimates are available for proved
undeveloped reserves that may exist.

<TABLE>
<CAPTION>
                                                         Natural
                                                           Gas          Oil
                                                           (In          (In
                                                         Million     Thousands
                                                       Cubic Feet)  of Barrels)
<S>                                                    <C>         <C>
  Proved Developed Reserves
    Balance at January 1, 1997                             359,877           564
      Revisions of estimates                                 7,008            41
      Extensions and discoveries                             7,439            28
      Production                                           (37,454)          (24)
    Balance at December 31, 1997                           336,870           609
      Revisions of estimates                                15,061           (12)
      Extensions and discoveries                            24,987            45
      Production                                           (37,138)          (59)
    Balance at December 31, 1998                           339,780           583
      Revisions of estimates                                 5,813           261
      Extensions and discoveries                            46,736
      Production                                           (38,890)          (68)
    Balance at December 31, 1999                           353,439           776
</TABLE>

                               SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 28th day of March, 2000.

                                 QUESTAR GAS COMPANY
                                       (Registrant)


                                 By  /s/ D. N. Rose
                                    D. N. Rose
                                    President and Chief
                                    Executive Officer


      Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the date
indicated.

  /s/ D. N. Rose                 President and Chief Executive
 D. N. Rose                      Officer;  Director (Principal
                                 Executive Officer)

  /s/ S. E. Parks                Vice President, Treasurer and Chief
Financial
 S. E. Parks                     Officer (Principal Financial Officer)

  /s/ G. H. Robinson             Vice President and Controller
 G. H. Robinson                  (Principal Accounting Officer)

*R. D. Cash                      Chairman of the Board
*W. Whitley Hawkins              Director
*Robert E. Kadlec                Director
*Dixie L. Leavitt                Director
*Gary G. Michael                 Director
*D. N. Rose                      Director
*Harris H. Simmons               Director


March 28, 2000                   *By /s/ D. N. Rose
  Date                                D. N. Rose, Attorney in Fact

                              EXHIBIT INDEX

Exhibit
Number      Exhibit

  3.1.*      Restated Consolidated Articles of Incorporation dated
             August 15, 1980.  (Exhibit No. 4(a) to Registration
             Statement No. 2-70087, filed December 1, 1980.)

  3.2.*      Certificate of Amendment to Restated Consolidated Articles
             of Incorporation dated May 13, 1982.  (Exhibit No. 3(b) to
             Form 10-K Annual Report for 1982.)

  3.3.*      Certificate of Amendment to Restated Consolidated Articles
             of Incorporation dated May 10, 1983.  (Included in Exhibit
             No. 4.1. to Registration Statement No. 2-84713, filed June
             23, 1983.)

  3.4.*      Certificate of Amendment to Restated Consolidated Articles
             of Incorporation dated August 16, 1983.  (Exhibit No. 3(a)
             to Form 8 Report amending the Company's Form 10-Q Report
             for Quarter Ended September 30, 1983.)

  3.5.*      Certificate of Amendment to Restated Consolidated Articles
             of Incorporation dated October 26, 1984.  (Exhibit No. 3.5.
             to Form 10-K Annual Report for 1984.)

  3.6.*      Certificate of Amendment to Restated Consolidated Articles
             of Incorporation dated May 13, 1985.  (Exhibit No. 3.1. to
             Form 10-Q Report for Quarter Ended June 30, 1985.)

  3.7.*      Articles of Amendment to Restated Consolidated Articles of
             Incorporation dated February 10, 1988.  (Exhibit No. 3.7.
             to Form 10-K Annual Report for 1987.)

  3.8.*      Articles of Amendment to Restated Consolidated Articles of
             Incorporation dated December 31, 1997.  (Exhibit No. 3.7.
             to Form 8-K Current Report for December 31, 1997.)

  3.9.*      Bylaws (as amended effective August 11, 1992).  (Exhibit
             No. 3.8. to Form 10-K Annual Report for 1992.)

  4.*1       Indenture dated as of May 1, 1992, between the Company and
             Citibank, as trustee, for the Company's Debt Securities.
             (Exhibit No. 4. to Form 10-Q Report for Quarter Ended June
             30, 1992.)

  10.1.*2    Stipulations and Agreement, dated October 14, 1981,
             executed by Mountain Fuel Supply Company; Wexpro Company;
             the Utah Department of Business Regulations, Division of
             Public Utilities; the Utah Committee of Consumer Services;
             and the staff of the Public Service Commission of Wyoming.
             (Exhibit No. 10(a) to Form 10-K Annual Report for 1981.)

  10.2.*3    Joint Annual Management Incentive Plan adopted by Questar
             Gas Company, Questar Pipeline Company, and Questar
             Regulated Services Company as amended and restated
             effective May 18, 1999.  (Exhibit No. 10.1. to Form 10-Q
             Report for Quarter Ended June 30, 1999.)

  10.3.*2,3  Mountain Fuel Supply Company Window Period Supplemental
             Executive Retirement Plan effective January 24, 1991.
             (Exhibit No. 10.9. to Form 10-K Annual Report for 1990.)

  10.4.*2,3  Questar Gas Company Deferred Compensation Plan for
             Directors as amended and restated effective May 19, 1998.
             (Exhibit No. 10.2. to Form 10-Q Report for Quarter Ended
             June 30, 1998.)

  10.5.*2    Gas Gathering Agreement between Mountain Fuel Supply
             Company and Questar Pipeline Company effective September 1,
             1993.  (This agreement has been transferred to Questar Gas
             Management Company.)  (Exhibit No. 10.11. to Form 10-K
             Annual Report for 1994.)

  10.6.*2    Amendment to Gas Gathering Agreement between Mountain Fuel
             Supply Company and Questar Gas Management Company effective
             September 1, 1997.

  24.        Power of Attorney.

  27.        Financial Data Schedule.
_______________________

     *Exhibits so marked have been filed with the Securities and
Exchange Commission as part of the referenced filing and are
incorporated herein by reference.

     1First Security Bank, N.A. serves as the successor trustee.

     2This document has not been formally amended to refer to the
Company's current name.

     3Exhibit so marked is a management contract or compensation plan or
arrangement.

     (b) Questar Gas Company filed a Current Report on Form 8-K dated
December 8, 1999, reporting the decision rendered by the PSCU denying
the Company's application to include certain processing costs in costs
that are passed through to customers.