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, 1998 OR

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

                    Commission File 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, Utah84145-0360
(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 29, 1999:  $0.

Indicate the number of shares outstanding of each of the registrant's 
classes of common stock, as of March 29, 1999:  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
             General
             Gas Distribution
             Gas Supply
             Competition, Growth and Unbundling
             Regulation
             Relationships with Affiliates
             Employees
             Environmental Matters
             Research and Development
             
Item 3.   LEGAL PROCEEDINGS

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

                              PART II

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

Item 6.   OMITTED

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

Item 8.   FINANCIAL STATEMENTS AND
          SUPPLEMENTARY DATA

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

                             PART III

Items     OMITTED
10-13

                              PART IV

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

SIGNATURES 


                             FORM 10-K
                        ANNUAL REPORT, 1998

                              PART I

ITEMS 1. and 2.  BUSINESS AND PROPERTIES

General

     Questar Gas Company (the "Company" or "Questar Gas") distributes 
natural gas to more than 663,000 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 integrated provider 
of energy services.  

     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 gradually expanded the boundaries of its 
distribution 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 its competitive position in its traditional service area, 
even as deregulation and unbundling may open the area to other 
players, and to take advantage of opportunities to expand its range of 
activities.

Gas Distribution

     As of December 31, 1998, Questar Gas was serving 663,392 
residential, commercial, and industrial customers, a 3.4 percent 
increase from the 641,696 customers served as of the end of 1997.  
(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 21,696 customers in 1998, which was the fifth 
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 new 
service areas that are converting to natural gas.  During 1998, 
Questar Gas extended service to several small communities in rural 
Utah, e.g., Panguitch, Joseph, Oak City.  The population of the 
Company's service area in Utah continues to grow faster than the 
national average.  Questar Gas expects to add 18,000-21,000 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 1.04 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 6 percent 
warmer than normal in 1998 which was the fifth 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 was in effect for all of 1998, 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.  

     During 1998, Questar Gas sold 83.2 million decatherms ("MMDth") 
of natural gas to residential and commercial customers, compared to 
85.7 MMDth in 1997.  General service sales to residential and 
commercial customers were responsible for over 89 percent of the 
Company's total revenues in 1998.

     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 
1998-99 heating season, the Company used a design-day demand of 
977,251 Dth for firm customers.  Questar Gas is also obligated to have 
pipeline capacity, but not gas supply, for firm transportation 
customers.  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, increased during 1998, from 60.8 MMDth in 1997 to 
65.1 MMDth in 1998, reflecting Utah's economic strength.

     The majority of interruptible sales service customers pay rates 
based on the Company's weighted average cost of purchased gas, which 
is periodically lower for some customers than the cost of purchasing 
volumes directly from producers and paying transportation rates.  
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 1998, 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 19,976 miles 
of street mains, service lines, and interconnecting pipelines.  The 
Company has consolidated many of its activities in its operations 
center, warehouse and garage 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 reserve 
"cost-of-service" gas for firm sales customers.  During 1998, 
approximately 45 percent of the Company's firm sales requirement was 
satisfied with cost-of-service gas produced from over 660 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 1998, 42.7 
MMDth of gas were delivered from such properties, compared to 44.0 
MMDth in 1997.  

     The Company estimates that it had reserves of 339.8 billion cubic 
feet ("Bcf") of natural gas as of year-end 1998 compared to 336.9 Bcf 
as of year-end 1997.  (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 1998, 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 1998, Questar Gas, as the party 
with the economic interest in the gas produced from such wells, 
claimed $2.2 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.  
Gas is injected into the Clay Basin storage reservoir during the 
summer and withdrawn during the heating season.

     The Company has been directly responsible for all of its gas 
acquisition activities since September 1, 1993.  Questar Gas has a 
balanced and diversified portfolio of 42 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 last semi-annual purchased gas cost filing, the Company estimated 
that its 1999 average wellhead cost of field-purchased gas would be 
$1.92 per Dth.  Although Questar Gas has contracts with take-or-pay 
provisions, it currently has no material take-or-pay liabilities.

     The Company is concerned about the reduction of heating content 
in its gas supply and has extensively reviewed several alternatives to 
deal with the problem.  This reduction of heat content is caused by 
the presence of carbon dioxide in gas volumes extracted from coal 
seams and by the fact that processing plants strip off liquids from 
gas supplies.  Appliances in Questar Gas's service area have 
historically been set to burn gas at a certain Btu level and may 
require adjustment for proper combustion of lower Btu gas.  The 
Company, during 1998, changed its recommended setpoint for appliances.  
This revised setpoint is used by customers and contractors to adjust 
appliances when they are installed or serviced.

     The Company has contracted with Questar Transportation Services 
Company, a new subsidiary of Questar Pipeline, to construct and 
operate a processing plant to strip carbon dioxide from gas volumes 
extracted from coal seam gas.  This plant will be finished during the 
summer of 1999.  (See "Regulation" for a discussion of regulatory 
proceedings involving the plant.)

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 markets 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.  Most 
households in its service area already use natural gas for space 
heating and water heating.  Virtually 100 percent of the new homes 
constructed in its service area have natural gas lines and 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, which is significantly lower 
than its over 90 percent market share for furnaces and water heaters.  

     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.  During the 
1997-98 winter heating season, the Company's net income was affected 
by the impact of charging higher rates for natural gas.  When natural 
gas rates increased as a result of higher gas costs and a special 
surcharge, customers adjusted their usage patterns.  On a 
temperature-adjusted basis, per-customer usage declined for the first 
time in several years, but stabilized later in 1998, as natural gas 
rates were adjusted.

     Questar Gas reduced its rates effective January 1, 1999, to 
reflect changes in natural gas costs and to eliminate the special 
surcharge.  The typical residential customer in Utah would have an 
annual bill of $552.79, using rates in effect as of January 1, 1999, 
compared to an annual bill of $594.53 using rates in effect as of the 
same date in the prior year.

     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 has developed 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 are 
periodically 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 a tap on the Kern River line in Salt Lake County that 
enables 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, 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 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.  (The numbers include a proportionate share of 
employees in the Company's parent.)  Questar Gas intends to maintain 
its competitive position within its own service area and to take 
advantage of opportunities in new markets.

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 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.  During the program's initial open season, 
which was conducted in the spring of 1998, no other supplier 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 and anticipates 
that electric utility service will be unbundled before retail gas 
distribution service.  Given its attractive rates and high customer 
service ratings, the Company does not believe that its residential 
customers will push for rapid unbundling 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 its labor costs and consolidating activities 
and utilizing new technology.  The Company currently does not expect 
to file a general rate case application with the PSCU or the PSCW in 
1999.  It is currently authorized to earn a return on rate base of 
10.4 percent in Wyoming and 10.22 to 10.34 percent in Utah.

     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 received regulatory approval 
from the PSCU and the PSCW to decrease its rates effective January 1, 
1999.  The Company's new rates for Utah customers reflect a gas-cost 
component of $2.78 per Dth, compared to $3.20 per Dth for the prior 
period; new rates for Wyoming customers reflect a gas-cost component 
of $2.63 per Dth compared to $2.88 per Dth.  (The gas-cost component 
includes transportation and storage costs.)

     The PSCU, by an order dated December 31, 1998, settled claims 
raised by the Division of Public Utilities ("Division"), a Utah state 
agency, concerning the rates paid by Questar Gas for gathering 
services rendered by Questar Gas Management Company ("QGM"), an 
affiliate.  The Division claimed that a reduction in gathering rates 
that was effective September 1, 1997, should be extended retroactively 
to March of 1996, when Questar Pipeline transferred the gathering 
assets to QGM.  After presiding at public hearings and receiving legal 
briefs, the PSCU ruled against the Division's claims, which involved 
approximately $7.8 million in potential refunds. 

     Responsibility for gas acquisition activities involves inherent 
risks of regulatory scrutiny.  In the past, the Company has been 
involved in regulatory proceedings in which the prudence of its gas 
supply activities has been challenged, but has successfully defended 
its activities and has not incurred any significant disallowance of 
gas costs.

     Questar Gas has filed an application with the PSCU to recover the 
costs associated with the new carbon dioxide processing plant that is 
being built to deal with the low Btu problem in coal seam gas.  The 
Company proposed that the costs be handled as gas costs eligible for 
pass-through treatment.  Some parties in the proceedings are reviewing 
the Company's conclusion that the plant is the best and cheapest 
alternative to address the Btu problem and the Company's proposal for 
pass-through treatment of costs.  Hearings in conjunction with the 
application will be held during April of 1999.

     The PSCU recently determined that it had jurisdiction to 
determine whether Questar Gas should be required to sell gas to a 
municipality in southern Utah for resale to residents of the 
community.  The PSCU, however, has not determined whether "public 
interest" supports the municipality's request for such service.  
Hearings on the public interest issue will begin in late August 1999.  
Questar Gas does not believe that it can be required to offer such 
service.  At the Company's request, the PSCU preserved the Company's 
right to request a rehearing on the jurisdictional issue upon the 
conclusion of the public-interest proceedings. 

     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 the Questar Gas.

     The Company has significant relationships with its affiliates.  
The PSCU and PSCW have jurisdiction to examine these relationships 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 continued to be monitored by the 
Division and its agents.

     The PSCU has requested comments on a proposed rule submitted for 
its consideration that imposes conditions on the ability of Questar 
Gas and its affiliates to enter "unregulated markets" in competition 
with other vendors.  The Company intends to be an active participant 
in any rule-making proceedings convened by the PSCU.

     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 InfoComm, Inc.
      Questar Market Resources, Inc.
            Wexpro Company
            Questar Exploration and Production Company
            Celsius Energy Company
            Questar Energy Trading Company
            Questar Gas Management Company
      Questar Regulated Services Company
            Questar Pipeline Company
            Questar Gas Company
            Questar Energy Services, Inc. 


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

     Questar Regulated Services Company.  The Company's direct parent, 
Questar Regulated Services Company ("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 and allowed the group to offer an early 
retirement program effective July 31, 1998.  The program, which was 
accepted by 178 employees, resulted in reduced labor and overhead 
costs for 1998.

     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.  Questar Gas has 
reserved about 800,000 Dth per day or 74 percent of Questar Pipeline's 
total transmission capacity.

     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 1998, Questar Pipeline transported 107.5 MMDth of gas for 
Questar Gas, compared to 110.3 MMDth in 1997.  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 1998, 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, 1999, but the parties have recently decided to extend the 
agreement for three years.

     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 million in 
demand charges during 1998 in connection with storage services.

     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.  When it was part of 
the Market Resources unit, QES assumed the responsibility for an 
appliance financing program that had originally been initiated by 
Questar Gas.  The Company also allows QES to advertise its products 
with bills sent to customers as part of its general advertising 
campaign and to invoice its customers on utility bills.

     QES is currently revising its business plan, but expects to 
continue a close relationship with Questar Gas.

     Questar Gas Management Company.  On March 1, 1996, Questar 
Pipeline's gathering facilities were transferred to QGM, which 
subsequently was moved to the Market Resources segment of Questar.  
During 1998, QGM gathered 29.9 MMDth of natural gas for Questar Gas, 
compared to 28.5 MMDth in 1997.  During 1998, the Company paid $5 
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 21.70 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.

     Other Affiliates.  Other significant affiliates of Questar Gas 
include Questar InfoComm and Questar Energy Trading Company ("Questar 
Energy Trading").  Questar InfoComm provides data processing and 
telecommunication services for the Company and other affiliates.  It 
owns and operates a network of microwave facilities, all of which are 
located in the Company's service area or near Questar Pipeline's 
transmission system.  Services are priced to recover operating 
expenses and a return on investment.  Questar InfoComm personnel are 
assisting Questar Gas with the maintenance of existing systems and the 
necessary testing and certification of such systems for Year 2000.  

     Questar Energy Trading conducts energy marketing activities.  It 
combines gas volumes purchased from third parties and equity producers 
(production from affiliates) to build a flexible and reliable 
portfolio.  The Company purchases some natural gas volumes from 
Questar Energy Trading, including gas volumes originally produced by 
Celsius Energy Company ("Celsius").

     In addition to QGM and Wexpro, the Market Resources segment of 
Questar includes Questar Exploration and Production Company (formerly 
Universal Resources Corporation) and Celsius.  Both of these companies 
are owned by Questar Market Resources, Inc., but do not have 
significant business relationships with Questar Gas.

     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, 1998, the Company had 946 employees, compared 
to 1,037 at year-end 1997.  The decrease reflects the early retirement 
program offered to employees with Regulated Services during 1998.  
Regulated Services, the Company's parent, has 434 employees 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 feature 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

     There are various legal proceedings pending that involve the 
Company and its affiliates.  While it is not feasible to predict or 
determine the outcomes of these proceedings, the Company's management 
believes that the outcomes will not have a material adverse effect on 
the Company's financial position.

     As a result of acquiring Questar Pipeline's gas purchase 
contracts, the Company is responsible for any judgment rendered 
against Questar Pipeline in a lawsuit that was tried before a Wyoming 
federal district court jury in late 1994.  The jury awarded several 
million dollars to the producer from which Questar Pipeline purchased 
gas, but the trial judge, in June of 1998, entered a judgment that 
overturned most provisions of the jury verdict.  The producer filed an 
appeal from the trial court's decision with the United States Court of 
Appeals for the Tenth Circuit, where briefs have been filed.

     The plaintiff producer filed another case against the Company and 
its affiliates in 1997.  It 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, has been stayed pending the outcome 
of the appeal.

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 1998.

                               Part II

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

     As of January 1, 1997, 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,
                                              1998        1997        1996
                                                 (Dollars In Thousands)
<S>                                       <C>         <C>         <C>
OPERATING INCOME
Revenues
  Residential and commercial sales           $425,452    $399,174    $328,785
  Industrial sales                             29,555      24,459      18,357
  Industrial transportation                     6,480       6,491       5,898
  Other                                        15,336      18,099      18,888
        Total revenues                        476,823     448,223     371,928
  Natural gas purchases                       281,004     248,933     182,400
      Revenues less natural gas purchases     195,819     199,290     189,528

Operating expenses
  Operating and maintenance                    96,923     101,719      97,110
  Depreciation and amortization                33,261      31,160      28,309
  Other taxes                                   8,185       8,174       8,071
        Total expenses                        138,369     141,053     133,490
          Operating income                    $57,450     $58,237     $56,038

OPERATING STATISTICS
Natural gas volumes (in Mdth)
  Residential and commercial sales             83,231      85,747      80,844
  Industrial deliveries
    Sales                                       9,681       9,523       8,584
    Transportation                             55,461      51,313      49,499
      Total industrial                         65,142      60,836      58,083
        Total deliveries                      148,373     146,583     138,927

Natural gas revenue (per dth)
  Residential and commercial                    $5.11       $4.66       $4.07
  Industrial sales                               3.05        2.57        2.14
  Transportation for industrial customers        0.12        0.13        0.12

System natural gas cost (per dth)               $2.57       $2.62       $2.44

Heating degree days (normal 5,801)              5,462       5,465       5,307
  Warmer than normal                                6%          6%          9%

Number of customers at December 31,
   Residential and commercial                 662,084     640,496     617,241
   Industrial                                   1,308       1,200         990
                                              663,392     641,696     618,231
</TABLE>
<PAGE>

Revenues, less natural gas purchases, decreased $3,471,000 in 1998 when compared
with 1997 as a result of lower usage per customer in 1998 and switching between
rate classifications.  These downward pressures were partially offset by
increased sales due to the addition of new customers. Revenues, net of gas
costs, increased $9,762,000 in 1997 when compared with 1996 primarily from
higher heating demand caused by colder temperatures and customer additions.

Usage of gas per retail customer fell during the first half of 1998 after
increasing in the first half of 1997. This reduced usage appears to have been a
reaction to rising gas costs included in rates during the latter part of 1997
and first part of 1998. Usage per customer had stabilized by the end of 1998,
coinciding with lower gas costs.  A rate surcharge, associated with constructing
a distribution pipeline into southern Utah and in effect for the past 10 years,
began phasing out in September of 1997.  Also, some general-service customers,
who met higher load-factor standards in 1998, shifted to firm commercial rates
that have a lower margin.

Questar Gas added 21,696 customers in 1998 and 23,465 customers in 1997,
representing increases of 3.4% and 3.8%, respectively.  Customer additions in
1999 are expected to reach 20,000 to 21,000.

Temperatures were warmer than normal for the three years presented.  The revenue
impact of this warmer-than-normal temperature trend was mitigated as a result of
a weather-normalization adjustment, which was part of a 1995 rate settlement.
Virtually all of Questar Gas' residential and commercial volumes were covered
under the weather-normalization adjustment in 1998 and 1997 compared with about
50% in 1996.

Gas deliveries to industrial customers increased 7% in 1998 and 5% in 1997
compared with the prior year.  The increases were due to the effects of a strong
regional economy, which produces expansion of operations and addition of
industrial customers. 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.

Questar Gas' natural gas purchases increased in 1998 and 1997, resulting in a
rising natural gas-cost component allowed in rates.  The gas-cost component in
Utah rates was also increased in 1998 and 1997 in an effort to recover sharply
increased natural gas-purchase costs incurred during the 1996-1997 heating
season.  By the end of 1998, those costs had been substantially recovered.  The
balance in the purchased gas cost account had decreased from $37.3 million at
December 31, 1997 to $2.1 million at December 31, 1998.  In response to requests
by Questar Gas, regulatory agencies approved on an interim basis decreases in
gas costs charged to customers.  The winter residential and small commercial
customer gas-cost component for Utah decreased from $3.20 per dth to $2.78
beginning in January 1999 and from $2.88 to $2.63 per dth in Wyoming.

Questar Gas' operating and maintenance expenses decreased by 5% in 1998 compared
with 1997 as a result of lower labor costs and capitalizing costs associated
with installing new computer systems. Labor costs were $2 million lower in 1998
due to a reduction in the number of employees following an early retirement
program offered to employees of Regulated Services.  Operating and maintenance
expenses increased 5% in 1997 due primarily to the costs of serving an expanding
customer base, higher labor costs and modernization of key computer systems.  In
1997, Questar Gas and Questar Pipeline combined functions common to
gas-distribution and gas-transmission operations in order to eliminate
duplications.

Depreciation expense was higher in 1998 compared with 1997 primarily as a result
of increased investment in property, plant and equipment.  Interest expense was
higher in 1998 due primarily to an issuance of $50 million of medium-term notes
with an average interest rate of 6.88 % in the third and fourth quarters of
1997.

The effective income tax rate was 33.5% in 1998, 31.7% in 1997 and 1996. The
effective income tax rate was below the combined federal and state statutory
rate of about 38% primarily due to  income tax credits received from production
of gas from certain properties. These credits amounted to $2,217,000 in 1998,
$2,686,000 in 1997 and $3,246,000 in 1996.


LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Net cash provided from operating activities increased in 1998 compared to 1997
due primarily to the collection of purchased-gas costs and accounts receivable
from natural gas distribution customers and the timing of payments of accounts
payable associated with construction.

Investing Activities

Following is a summary of capital expenditures for 1998 and 1997, and a forecast
of 1999 expenditures.

<TABLE>
<CAPTION>
                                              1999
                                           Estimated      1998        1997
                                                      (In Thousands)
<S>                                       <C>         <C>         <C>
New-customer service                          $35,100     $35,106     $30,794
Distribution system                            11,200      15,338      10,507
Buildings                                         600         396       5,388
Computer software and hardware                  3,700      14,859       9,083
General                                         9,400      10,629       9,603
                                              $60,000     $76,328     $65,375
</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 used net cash provided from operating activities to fund 1998
capital expenditures and dividend payments. Questar Gas borrowed $50 million of
medium-term notes and increased short-term debt by $23.8 million in 1997.
Forecasted 1999 capital expenditures of $60 million 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 $96.7 million at December 31, 1998
with an interest rate of 5.71% and $100 million at December 31, 1997 with an
interest rate of 6.02%.

Questar Gas' capital structure at December 31, 1998 was composed of 50%
long-term debt and 50% common equity. Moody's and Standard and Poor's have rated
the Company's long-term debt A1 and A+, respectively.

Year 2000
               
Introduction

     Questar Gas is addressing the issue of computer programs and 
embedded computer chips being unable to distinguish between the year 
1900 and the year 2000 ("Y2K").

     In a coordinated effort with its parent Questar Corporation's Y2K 
project team, the basic approach is to provide company-wide management 
and coordination combined with distributed compliance responsibility 
at the various business units.  The Y2K team is responsible for 
fostering awareness; establishing company-wide strategy; coordinating 
Questar Gas action items and information; and providing periodic 
internal status reports.  The effort is designed to be consistent with 
the Questar Corporation's Y2K project and the prudent efforts of 
publicly traded companies of similar size, business, and complexity.

     Questar InfoComm, Inc. (an affiliate which provides information 
technology services) is responsible for Y2K compatibility of all 
communications systems; networks (LANs and WANs); corporate-wide 
applications and operating systems; mainframe resident commercial 
off-the-shelf products; and for developing, implementing and 
coordinating testing procedures.
 
General

     The Y2K team operates under a written plan (the "Plan") 
addressing infrastructure, applications software (infrastructure and 
applications software are sometimes collectively referred to as "IT 
systems"), outside suppliers and customers, and process control and 
instrumentation containing embedded chips (non-IT systems).  The 
Company's in-house programmers and systems analysts (including those 
of Questar InfoComm, Inc.) are primarily responsible for the 
conversion and testing of certain non-compliant application software 
code. In addition, the services of outside consultants and programmers 
were engaged to assist with project management and completion of 
coding for certain software programs. The general phases common to all 
business units are:

     (1) Inventory
     (2) Prioritization
     (3) Project start-up
     (4) Assessment
     (5) Remediation
     (6) Testing; and
     (7) Project closeout.

Implementation of the Plan is generally proceeding on schedule. 

Status

Inventory and Assessment. The inventory and assignment of priority for 
each business unit were essentially completed in September 1998. 
Throughout the ongoing Y2K project, these inventory listings continue 
to be monitored.  Material items were defined as those the Company 
believed to involve a risk to the safety of individuals; or which may 
cause damage to property or the environment; or which may affect the 
Company's ability to provide gas production, transportation, or 
delivery. 
 
Projects Planning. Based on the inventory and determined priorities, 
more than 45 individual items have been combined into 4 projects. 
Project managers have been assigned, standard project documentation 
has been established, training sessions are being held with the 
various project managers, and standard management reporting forms have 
been devised and are being utilized. All of the foregoing activities 
comprise what has been defined as "project start-up."

Applications Software. The applications software section of the Plan 
addresses both the conversion of applications software that is not Y2K 
compliant and the replacement of such software.  The testing phase of 
this section is scheduled for completion by the third quarter of 1999. 
The testing phase is conducted as the software is remediated or 
replaced.  Currently there are 4 projects identified in this section: 
0 in start-up, 2 in assessment, 0 in remediation, 1 in testing, and 1 
completed and deemed to be Y2K ready.  Contingency planning for this 
section began in the third quarter of 1998 and will  be completed by 
mid-1999.

Non-IT Equipment. Inventory and assessment phases are in progress for 
non-IT systems. This section of the Plan is considered to be one 
project and addresses hardware, software and associated embedded 
computer chips used in the operation of all facilities operated by the 
Company.  This section presents unique problems in that it is often 
difficult to determine whether embedded chips have a date function 
that present a Y2K problem.  It is also difficult to take certain 
critical systems, such as compressors and pipeline valves, off-line 
for testing. Because of this, the Company has engaged the services of 
a consultant, Stone & Webster, to help with this effort. The Company 
believes the replacement, repair and testing of non-IT systems 
equipment is on schedule to be completed by third quarter 1999. As of 
December 31, 1998, the embedded chip project is active and in the 
assessment phase. Contingency planning for this section began in the 
third quarter of 1998 and will be completed by year end 1999.

Testing. The testing phases of the Plan are underway.  The Company has 
developed a testing procedure and guidelines to help system users and 
project managers develop their specific test plans and to ensure 
consistency in testing. The Company has assembled a test facility 
which duplicates, in essential details, the production environment.  
The test facility is in operation.  Critical systems already tested 
and determined to be Y2K ready include the SCADA gas control system 
and the company's internal telephone system (including switches) which 
connects to the local access provider. Other critical systems 
currently in the test facility include customer information systems 
(CIS) and gas measurement. Responsible project managers and system 
users continue to develop their test plans and schedule testing in the 
facility.

Critical Third Parties. The outside vendors and customers section of 
the Plan includes the process of identifying and prioritizing critical 
suppliers and customers and communicating with them about their plans 
and progress in addressing their Y2K problems. The various business 
units have formed Project teams which have begun the detailed 
evaluation of the most critical third parties and to elicit required 
information.  The process of evaluating these external agents 
commenced in the third quarter of 1998 and first contacts with vendors 
have been made. This process is scheduled for completion by mid-1999, 
with follow-up reviews scheduled through the remainder of 1999. This 
procedure will include the development of contingency plans, scheduled 
for the second quarter of 1999, with completion by late 1999.  The 
Company estimates that this section was on schedule at December 31, 
1998.

Costs

     The total cost associated with efforts to become Y2K compliant is 
not expected to be material to the Company's financial position.  The 
current expense estimate of the Y2K project is $2.3 million.  The 
expense estimate is expected to change as the project progresses. 
Funds for the project are included in existing operating budgets.

Risks

     Failure to correct a material Y2K problem could result in an 
interruption, or a failure of, certain normal business activities or 
operations.  Such failures could materially and adversely affect the 
Company's results of operations, liquidity and financial condition.  
Due to the general uncertainty inherent in the Y2K problem - resulting 
in part from the uncertainty of the Y2K readiness of outside suppliers 
and customers and the embedded chip problems - the Company is unable 
to determine at this time whether the consequences of Y2K failures 
will have a material impact on the Company's results of operations, 
liquidity or financial condition. The Y2K project has reduced and is 
expected to continue to significantly reduce the Company's level of 
uncertainty about the Y2K problem and, in particular, about the Y2K 
compliance and readiness of its material outside vendors and 
customers.  The Company believes that the possibility of significant 
interruptions of normal operations is not significant.

Forward-Looking Statements

     This annual report contains some forward looking statements about 
future operations and expectations of Questar Gas.  Management 
believes they are reasonable representations of Questar Gas's expected 
performance at this time.  Actual results may vary from management's 
stated expectations and projections.

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.*3Annual Management Incentive Plan adopted by Questar Gas 
        Company, Questar Pipeline Company, and Questar Regulated 
        Services Company as amended and restated effective May 19, 
        1998.  (Exhibit No. 10.1. to Form 10-Q Report for Quarter 
        Ended June 30, 1998.)

  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 did not file a Current Report on Form 8-K 
during the last quarter of 1998.


                    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, 1998

                        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, 1998, 1997 and 
     1996

     Balance sheets -- December 31, 1998 and 1997

     Statements of common shareholder's equity -- Years ended December 
     31, 1998, 1997 and 1995 

     Statements of cash flows -- Years ended December 31, 1998, 1997 
     and 1996

     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, 1998 and 1997, 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, 1998.  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 generally accepted auditing 
standards.  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, 1998 and 1997, and the results of its 
operations and its cash flows for each of the three years in the 
period ended December 31, 1998, in conformity with generally accepted 
accounting principles.


/s/ Ernst & Young LLP
Salt Lake City, Utah
February 8, 1999


QUESTAR GAS COMPANY
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                                              1998        1997        1996
                                                     (In Thousands)
<S>                                       <C>         <C>         <C>
REVENUES
  From unaffiliated customers                 475,754     445,684     368,905
  From affiliated companies                     1,069       2,539       3,023
                                              476,823     448,223     371,928

OPERATING EXPENSES
  Natural gas purchases
    From affiliated companies                 142,699     137,062     128,919
    From unaffiliated parties                 138,305     111,871      53,481
      Total natural gas purchases             281,004     248,933     182,400
  Operating and maintenance                    96,923     101,719      97,110
  Depreciation and amortization                33,261      31,160      28,309
  Other taxes                                   8,185       8,174       8,071

    TOTAL OPERATING EXPENSES                  419,373     389,986     315,890

    OPERATING INCOME                           57,450      58,237      56,038

INTEREST AND OTHER INCOME                       3,566       3,388       3,033

DEBT EXPENSE                                  (19,792)    (19,119)    (16,637)

    INCOME BEFORE INCOME TAXES                 41,224      42,506      42,434

INCOME TAXES                                   13,816      13,492      13,446

    NET INCOME                                 27,408      29,014      28,988

</TABLE>

See notes to financial statements.

<PAGE>
QUESTAR GAS COMPANY
BALANCE SHEETS
<TABLE>
<CAPTION>


ASSETS
                                                            December 31,
                                                          1998        1997
                                                           (In Thousands)
<S>                                                   <C>         <C>
CURRENT ASSETS
  Cash and short-term investments                           3,326       6,747
  Accounts receivable                                      43,280      46,054
  Unbilled gas accounts receivable                         36,444      37,302
  Accounts receivable from affiliates                         788       3,131
  Inventories, at lower of average cost
   or market
    Gas stored underground                                 18,248      15,829
    Materials and supplies                                  4,048       4,518
      Total inventories                                    22,296      20,347
  Purchased-gas adjustments                                 2,067      37,251
  Prepaid expenses and deposits                             2,838       4,356
    TOTAL CURRENT ASSETS                                  111,039     155,188

PROPERTY, PLANT AND EQUIPMENT
  Distribution                                            685,710     641,226
  Production                                               97,870      97,870
  General                                                 115,117      98,974
  Construction in progress                                 49,583      44,866
                                                          948,280     882,936
  Less allowances for depreciation
   and amortization                                       382,657     354,761
    NET PROPERTY, PLANT AND EQUIPMENT                     565,623     528,175

OTHER ASSETS
  Income taxes recoverable from customers                   5,050       6,371
  Unamortized costs of reacquired debt                      8,609       9,102
  Other                                                    10,194       6,015
    TOTAL OTHER ASSETS                                     23,853      21,488

                                                          700,515     704,851
</TABLE>
<PAGE>

LIABILITIES AND SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
                                                            December 31,
                                                          1998        1997
                                                           (In Thousands)
<S>                                                   <C>         <C>
CURRENT LIABILITIES
  Notes payable to Questar                                 96,700     100,000
  Accounts payable and accrued expenses
    Accounts and other payables                            41,756      36,924
    Accounts payable to affiliates                         17,240      14,599
    Federal income taxes                                    2,113       3,112
    Other taxes                                             5,612       5,304
    Interest                                                4,567       4,548
      Total accounts payable and
         accrued expenses                                  71,288      64,487
    TOTAL CURRENT LIABILITIES                             167,988     164,487

LONG-TERM DEBT                                            225,000     225,000

OTHER LIABILITIES
  Unbilled gas revenues                                                 5,180
  Other                                                       330         809
    TOTAL OTHER LIABILITIES                                   330       5,989

DEFERRED INVESTMENT TAX CREDITS                             6,011       6,392

DEFERRED INCOME TAXES                                      74,012      80,717

COMMITMENTS AND CONTINGENCIES - Note 5

COMMON SHAREHOLDER'S EQUITY
  Common stock - par value $2.50 per
     share; authorized
    50,000,000 shares; issued and
      outstanding 9,189,626 shares                         22,974      22,974
  Additional paid-in capital                               41,875      41,875
  Retained earnings                                       162,325     157,417
    TOTAL COMMON SHAREHOLDER'S EQUITY                     227,174     222,266

                                                          700,515     704,851

</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, 1996                    22,974      41,875     143,796
  1996 net income                                                      28,988
  Payment of dividends
    Preferred stock                                                      (391)
    Common stock                                                      (21,000)
Balances at December 31, 1996                  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

</TABLE>

See notes to financial statements.

<PAGE>

QUESTAR GAS COMPANY
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                  Year Ended December 31,
                                              1998        1997        1996
                                                    (In Thousand)
<S>                                       <C>         <C>         <C>
OPERATING ACTIVITIES
  Net income                                  $27,408     $29,014     $28,988
  Depreciation and amortization                35,772      33,739      31,214
  Deferred income taxes                        (6,705)      6,180      13,146
  Deferred investment tax credits                (381)       (382)       (383)
                                               56,094      68,551      72,965
  Changes in operating assets and
     liabilities
    Accounts receivable                         5,975     (24,425)      1,609
    Inventories                                (1,949)     (5,052)      5,620
    Prepaid expenses and deposits               1,518         155        (668)
    Accounts payable and accrued expenses       7,800      (5,183)      4,758
    Federal income taxes                         (999)      4,221       2,862
    Purchased-gas adjustments                  35,184     (13,041)    (33,392)
    Other                                      (8,024)     (3,722)     (3,258)
    NET CASH PROVIDED FROM
       OPERATING ACTIVITIES                    95,599      21,504      50,496

INVESTING ACTIVITIES
  Capital expenditures                        (76,328)    (65,375)    (51,657)
  Proceeds from disposition of property,
    plant and equipment                         3,108       2,761       2,990
     NET CASH USED IN INVESTING
       ACTIVITIES                             (73,220)    (62,614)    (48,667)

FINANCING ACTIVITIES
  Redemption of preferred stock                            (4,876)       (129)
  Issuance of long-term debt                               50,000
  Change in notes payable to Questar           (3,300)     23,800      20,100
  Payment of dividends                        (22,500)    (22,942)    (21,391)
    NET CASH PROVIDED FROM (USED IN)
      FINANCING ACTIVITIES                    (25,800)     45,982      (1,420)
 Change in cash and short-term investments     (3,421)      4,872         409
Beginning cash and short-term investments       6,747       1,875       1,466
    ENDING CASH AND SHORT-TERM
       INVESTMENTS                              3,326       6,747       1,875

</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), formerly Mountain Fuel Supply,
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 4.3% in 1998. The costs of gas wells were
amortized using the units-of-production method at $.17 per Mcf of natural gas
production in 1998.

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 $797,000 in 1998, $261,000 in
1997 and $277,000 in 1996.

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.

Reclassification:  Certain reclassifications were made to the 1997 and 1996
financial statements to conform with the 1998 presentation.


Note 2 - Debt

Questar makes loans to Questar Gas under a short-term borrowing arrangement.
Short-term notes payable to Questar totaled $96.7 million at December 31, 1998
with an interest rate of 5.71% and $100 million at December 31, 1997 with an
interest rate of 6.02%.

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, 1998 and no long-term
debt provisions restricting the payment of dividends.

Cash paid for interest was $19,963,000 in 1998, $17,933,000 in 1997 and
$16,346,000 in 1996.


Note 3 - Financial Instruments and Credit Management Activities

The carrying amounts and estimated fair values of the Company's financial
instruments were as follows:
<TABLE>
<CAPTION>

                                          December 31, 1998       December 31, 1997
                                          Book        Estimated   Book        Estimated
                                          Value       Fair Value  Value       Fair Value
                                                      (In Thousands)
<S>                                       <C>         <C>         <C>         <C>
Financial assets
    Cash and short-term investments             3,326       3,326       6,747       6,747
Financial liabilities
    Short-term loans                           96,700      96,700     100,000     100,000
    Long-term debt                            225,000     257,766     225,000     255,615
</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 and customer deposits 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,
                                              1998        1997        1996
                                                    (In Thousands)
<S>                                       <C>         <C>         <C>
Federal
  Current                                      16,773       5,334        (678)
  Deferred                                     (5,057)      6,636      12,906
State
  Current                                       2,876       1,107         254
  Deferred                                       (395)        797       1,347
Deferred investment tax credits                  (381)       (382)       (383)
                                               13,816      13,492      13,446
</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,
                                              1998        1997        1996
                                                     (In Thousands)
<S>                                       <C>         <C>         <C>
  Income before income taxes                   41,224      42,506      42,434

  Federal income taxes at statutory rate       14,428      14,877      14,852
  State income taxes, net of federal
   income tax benefit                           1,613       1,155       1,512
  Tight-sands gas production credits           (2,217)     (2,686)     (3,246)
  Investment-tax credits                         (381)       (382)       (383)
  Deferred taxes related to regulated
    assets for which deferred taxes were
    not provided in prior years                   922         921         921
  Other                                          (549)       (393)       (210)
    Income tax expense                         13,816      13,492      13,446

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

Significant components of the Company's deferred tax liabilities and assets were
as follows:

<TABLE>
<CAPTION>
                                                December 31,
                                              1998        1997
                                               (In Thousands)
<S>                                       <C>         <C>
Deferred tax liabilities
  Property, plant and equipment                77,519      74,694
  Purchased-gas adjustments                       785      14,155
  Other                                         6,706       7,135
    Total deferred tax liabilities             85,010      95,984

Deferred tax assets
  Alternative minimum tax and production
    credit carryovers                           6,056       7,866
  Unbilled revenues                                         1,968
  Other                                         4,942       5,433
    Total deferred tax assets                  10,998      15,267
       Net deferred tax liabilities            74,012      80,717

</TABLE>

Cash paid for income taxes was $18,985,000 in 1998 and $1,516,000 in 1997.
Questar Gas applied an overpayment of 1995 income taxes to more than offset
payment of 1996 taxes.


Note 5 - Rate Matters, Litigation and Commitments

Questar Gas last filed general rate cases in 1995.  Questar Gas was granted a
return on rate base between 10.22% and 10.34% in Utah and 10.54% in Wyoming in
1995 rate cases.  A rate of return on equity was not specified. Currently, the
Company does not plan to file a general rate case in 1999.

Questar Gas has filed an application with PSCU to recover the costs associated
with the a new carbon dioxide processing plant that is being built to deal with
the low Btu problem in coal seam gas. The Company is proposing that costs be
handled as gas costs eligible for pass-through treatment.  Some parties in the
case are reviewing the Company's conclusion that the plant is the best and
cheapest alternative to address the Btu problem and the Company's proposal for
pass-through treatment of costs. Hearings in conjunction with the application
will be held during April of 1999.

In an order issued December 31, 1998, the PSCU rejected the request of the Utah
Division of Public Utilities to deny Questar Gas recovery of approximately $7.6
million in costs paid by Questar Gas to Questar Gas Management for field
gathering of Questar Gas' system supplies.

As a result of acquiring Questar Pipeline's gas purchase contracts in 1994,
Questar Gas is responsible for any judgment rendered against Questar Pipeline in
a lawsuit that was tried before a Wyoming federal district court jury in 1994.
The jury awarded several million dollars to the producer from whom Questar
Pipeline purchased gas.  However, in a ruling issued June 2, 1998, the trial
judge set aside all aspects of the jury's verdict, except for $500,000 related
to certain take-or-pay contract issues.   The producer is pursuing an appeal at
the U. S. Court of Appeals for the 10th Circuit.

This same producer has recently filed additional claims against the Company and
its affiliates in the same court and with the same presiding judge.  The new
lawsuit, which is currently assigned to the same judge presiding over the
earlier litigation, updates the claims in the original lawsuit for the period
since the trial and adds new claims of fraud and antitrust violations.  The
Company has informed the producer that it will make any payments for the period
subsequent to the date covered by the original trial once the presiding judge
enters judgment and rules on pending post-trial motions.  The Company's
management believes that the producer's new allegations of fraud and antitrust
violation are without merit.

Questar Gas files for adjustment of purchased-gas costs with the PSCU and the
PSCW on a semiannual basis.  Because of lower forecasted gas prices and the fact
that prior gas cost increases have been largely recovered, Questar Gas received
approval to reduce annual gas costs in rates by $1.1 million in Utah and
$356,000 in Wyoming effective July 1, 1998.  Also, in January 1999, Questar Gas
received approval, pending a final order, to further reduce annual gas costs by
$39.3 million in Utah and $801,000 in Wyoming.

In March 1998, the PSCW approved Questar Gas' gas-merchant unbundling proposal
that was offered in 1997. Under this plan, a transportation-service option is
extended to residential and commercial customers as well as industrial customers
each year.  Customers choosing transportation service are allowed to secure gas
supplies directly from producers and marketers and pay Questar Gas a fee for
transportation services. Questar Gas continues to offer a traditional bundled
service as well. In 1998, no competitors qualified under the program.  Questar
Gas expects that the option of unbundled service in Wyoming will not have a
material effect on earnings. Questar Gas will maintain its current structure in
Utah.  As of  December 31, 1998, Questar Gas served 21,858 customers in Wyoming,
representing 3% of its total customers.

Questar Gas was involved in an environmental clean-up action on a site that
included numerous other parties. Recently, the parties have agreed to dismiss
Questar Gas from the case.

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.

Each year, Questar Gas purchases significant quantities of natural gas under
numerous gas-purchase contracts with varying terms and conditions.  Purchases
under these agreements totalled $100,058,000 in 1998, $122,106,000 in 1997 and
$67,249,000 in 1996.   Historically, gas-purchase contracts extended over many
years.  Current practice, however, sets contract terms for anywhere from one day
up to one year. As of February 1, 1998, substantially all long-term contracts
had expired.


Note 6 - 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, 1998, 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 anticipated regulatory treatment.

Pension expense was $1,865,000 in 1998, $1,847,000 in 1997 and $2,820,000 in
1996.

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.  Costs of postretirement benefits other than
pensions were $1,844,000 in 1998, $1,993,000 in 1997 and $2,424,000 in 1996.
Both the PSCU and the PSCW allow Questar Gas to recover future 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, 1998, the Company had a $623,000 regulatory asset
that it is amortizing over the next six 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 75%,
increasing to 80% in 1999, of the employees' 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 $1,616,000 in 1998,
$1,552,000 in 1997 and $1,893,000 in 1996.


Note 7 - Related Party Transactions

Regulated Services began providing administrative, technical and accounting
support in 1997 and charged Questar Gas $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 800,000 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 purchased
transportation and storage services from Questar Pipeline amounting to
$67,528,000 in 1998, $64,924,000 in 1997 and $61,078,000 in 1996, 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
$1,050,000 in 1998, $2,347,000 in 1997 and $2,768,000 in 1996. 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 $58,482,000 in 1998,
$49,887,000 in 1997 and $53,119,000 in 1996.

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 $9,047,000 in 1998, $12,472,000 in 1997 and $14,515,000
in 1996.  Questar Gas purchased various other field-related services from
Questar Gas Management amounting to $418,000 in 1998 and $1,167,000 in 1997.

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

Questar Gas has a 13-year lease with Interstate Land, an affiliate, for some
space in an office building located in Salt Lake City, Utah. The annual lease
payment for the next five years is $1,155,000.

Questar InfoComm Inc. is an affiliated company that provides data processing and
communication services to Questar Gas.  The Company paid Questar InfoComm
$16,480,000 in 1998, $19,875,000 in 1997 and $16,343,000 in 1996.

Questar charges Questar Gas for certain administrative functions amounting to
$4,714,000 in 1998, $5,518,000 in 1997 and $5,746,000 in 1996. These costs are
included in operating and maintenance expenses and are allocated based on each
affiliated company's proportional share of revenues less gas costs; property,
plant and equipment; and labor costs.  Management believes that the allocation
method is reasonable.

Questar Gas incurred debt expense to Questar of  $2,403,000 in 1998, $3,575,000
in 1997 and $1,906,000 in 1996.  The Company received interest income from
affiliated companies of $126,000 in 1997.


Note 8 - 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, 1998.  Wexpro develops and produces gas reserves owned by the
Company.  See Note 7 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 Million   (In Thousands
                                          Cubic Feet)    of Barrels)
<S>                                       <C>         <C>
  Proved Developed Reserves
    Balance at January 1, 1996                389,440         662
      Revisions of estimates                    4,365         (44)
      Extensions and discoveries                2,812           2
      Production                              (36,740)        (56)
    Balance at December 31, 1996              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


</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 27th day of March, 1998.

                              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
*G. L. Nordloh                Director
*D. N. Rose                   Director
*Harris H. Simmons            Director


March 27, 1998                *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    Annual Management Incentive Plan adopted by Questar Gas 
            Company, Questar Pipeline Company, and Questar Regulated 
            Services Company as amended and restated effective May 19, 
            1998.  (Exhibit No. 10.1. to Form 10-Q Report for Quarter 
            Ended June 30, 1998.)

 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 did not file a Current Report on Form 8-K 
during the last quarter of 1998.