SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1999

[ ] 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.)

P.O. Box 45360, 180 East 100 South, Salt Lake City, Utah84145-0360
(Address of principal executive offices) (Zip Code)

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

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

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

Class Outstanding as of July 31, 1999
Common Stock, $2.50 par value 9,189,626 shares

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

PART I FINANCIAL INFORMATION
Item 1. Financial Statements

QUESTAR GAS COMPANY
STATEMENTS OF INCOME
(Unaudited)

3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1999 1998 1999 1998 1999 1998
(In Thousands)

REVENUES $ 70,174 $ 74,387 $ 242,476 $266,176 $ 453,123 $ 475,763

OPERATING EXPENSES
Natural gas purchases 36,741 41,965 135,463 160,063 256,404 282,116
Operating and maintenance 25,131 23,735 50,012 49,012 97,923 97,525
Depreciation 8,619 7,697 17,285 15,528 35,018 31,386
Other taxes 2,153 2,531 4,379 4,903 7,661 7,788

TOTAL OPERATING EXPENSES 72,644 75,928 207,139 229,506 397,006 418,815

OPERATING INCOME (LOSS) (2,470) (1,541) 35,337 36,670 56,117 56,948

INTEREST AND OTHER INCOME 1,466 1,296 1,971 2,028 3,509 3,677

DEBT EXPENSE (4,743) (4,570) (9,848) (9,696) (19,944) (20,008)

INCOME (LOSS) BEFORE
INCOME TAXES (5,747) (4,815) 27,460 29,002 39,682 40,617

INCOME TAXES (CREDITS) (2,911) (2,434) 10,038 10,669 13,185 12,976

NET INCOME (LOSS) $ (2,836) $ (2,381) $ 17,422 $ 18,333 $ 26,497 $ 27,641

See notes to financial statements

QUESTAR GAS COMPANY
CONDENSED BALANCE SHEETS

June 30, December 31,
1999 1998 1998
(Unaudited)
(In Thousands)

ASSETS
Current assets
Cash and short-term investments $ 3,326
Accounts receivable $ 29,117 $ 36,871 80,512
Inventories 13,357 13,233 22,296
Purchased-gas adjustments 12,506 2,067
Other current assets 1,593 2,929 2,838
Total current assets 44,067 65,539 111,039

Property, plant and equipment 965,535 900,082 948,280
Less allowances for depreciation 401,343 365,909 382,657
Net property, plant and equipment 564,192 534,173 565,623

Other assets 20,833 23,089 23,853

$629,092 $622,801 $ 700,515

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities
Checks outstanding in excess of
cash balances $ 2,398 $ 5,259
Notes payable to Questar
Corporation 5,600 25,000 $ 96,700
Accounts payable and accrued
expenses 42,259 55,515 71,288
Purchased-gas adjustments 1,453
Total current liabilities 51,710 85,774 167,988

Long-term debt 225,000 225,000 225,000
Other liabilities 1,582 5,568 330
Deferred income taxes and investment
tax credits 77,704 77,110 80,023

Common shareholder's equity
Common stock 22,974 22,974 22,974
Additional paid-in capital 81,875 41,875 41,875
Retained earnings 168,247 164,500 162,325
Total common shareholder's equity 273,096 229,349 227,174

$629,092 $622,801 $ 700,515

See notes to financial statements

QUESTAR GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

6 Months Ended
June 30,
1999 1998
(In Thousands)

OPERATING ACTIVITIES
Net income $ 17,422 $ 18,333
Depreciation 18,646 16,668
Deferred income taxes and investment
tax credits (2,319) (9,999)
33,749 25,002
Change in operating assets and
liabilities 40,342 71,908

NET CASH PROVIDED FROM
OPERATING ACTIVITIES 74,091 96,910

INVESTING ACTIVITIES
Capital expenditures (19,960) (24,974)
Proceeds from disposition of property,
plant and equipment 2,745 2,308

NET CASH USED IN INVESTING
ACTIVITIES (17,215) (22,666)

FINANCING ACTIVITIES
Checks outstanding in excess of
cash balances 2,398 5,259
Decrease in notes payable
to Questar Corporation (91,100) (75,000)
Capital contribution 40,000
Payment of dividends (11,500) (11,250)

NET CASH USED IN FINANCING
ACTIVITIES (60,202) (80,991)

DECREASE IN CASH AND
SHORT-TERM INVESTMENTS $ (3,326) $ (6,747)

See notes to financial statements

QUESTAR GAS COMPANY
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)

Note 1 - Basis of Presentation

The interim financial statements reflect all adjustments which are,
in the opinion of management, necessary for a fair presentation of
the results for the interim periods presented. All such adjustments
are of a normal recurring nature. Due to the seasonal nature of the
business, the results of operations for the three- and six-month
periods ended June 30, 1999, are not necessarily indicative of the
results that may be expected for the year ending December 31, 1999.
For further information refer to the financial statements and
footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1998.

Note 2 - Receipt of Contribution of Capital

On June 30, 1999, Questar Gas received a $40 million contribution of
capital from its parent company that was used to repay short-term
debt owed to Questar Corporation.

Item 2. Management's Discussion and Analysis of Financial Conditions
and Results of Operations

QUESTAR GAS COMPANY
June 30, 1999
(Unaudited)

Operating Results

Following is a summary of financial and operating information for the
Company:

3 Months Ended 6 Months Ended 12 Months Ended
June 30, June 30, June 30,
1999 1998 1999 1998 1999 1998
(Dollars In Thousands)

FINANCIAL RESULTS
Revenues
From unaffiliated customers $ 69,952 $ 74,268 $ 242,045 $266,057 $ 451,742 $ 474,887
From affiliates 222 119 431 119 1,381 876
Total revenues 70,174 74,387 242,476 266,176 453,123 475,763
Natural gas purchases 36,741 41,965 135,463 160,063 256,404 282,116
Revenues less natural gas
purchases $ 33,433 $ 32,422 $ 107,013 $106,113 $ 196,719 $ 193,647

Operating income (loss) $ (2,470) $ (1,541) $ 35,337 $ 36,670 $ 56,117 $ 56,948
Net income (loss) (2,836) (2,381) 17,422 18,333 26,497 27,641

OPERATING STATISTICS
Natural gas volumes (in thousands of
decatherms)
Residential and commercial sales 14,145 13,178 46,570 47,492 82,309 84,677
Industrial sales 2,282 2,267 5,222 5,097 9,806 9,614
Transportation for industrial
customers 11,800 13,115 25,151 27,947 52,665 54,683
Total deliveries 28,227 28,560 76,943 80,536 144,780 148,974
Natural gas revenue (per decatherm)
Residential and commercial $ 4.15 $ 4.70 $ 4.65 $ 5.06 $ 4.88 $ 5.02
Industrial sales 2.83 2.90 2.93 3.01 3.01 2.92
Transportation for industrial
customers 0.13 0.11 0.13 0.11 0.13 0.12
Heating degree days
Actual 946 899 3,242 3,291 5,413 5,623
Normal 741 741 3,484 3,484 5,801 5,801
Colder (warmer) than normal 28% 21% (7%) (6%) (7%) (3%)
Number of customers at June 30,
Residential and commercial 665,221 642,399
Industrial 1,356 1,297
Total 666,577 643,696

Revenues less natural gas purchases, or nongas-cost margin, increased
3% in the second quarter and 1% in the first half of 1999 compared
with the same periods of 1998. The increase in the margin resulted
primarily from gas volumes delivered to new customers and more than
offset the effect of lower usage per customer. Temperature adjusted
usage per customer was approximately 3 decatherms lower in the first
half of 1999 compared with the prior year period. Temperatures, as
measured in degree days, were warmer than normal in the 6-and
12-months periods and colder than normal in the second quarter.
However, the impact on earnings of temperature variations from normal
has been mitigated by a weather-normalization adjustment.

The number of customers served by Questar Gas grew by 22,881 or 3.6%
from a year ago to 666,577 as of June 30, 1999. The number of
customer additions for the year ending December 31, 1999 is expected
to be between 20,000 to 22,000.

Volumes delivered to industrial customers decreased 8% in the first
half of 1999 when compared with the same period of 1998 because a
major steel-producing customer reduced operations. The margin earned
from gas delivered to industrial customers is substantially lower
than from gas delivered to residential and commercial customers.

Questar Gas' natural gas purchases decreased in the 1999 periods when
compared with the 1998 periods due to lower sales volumes and lower
gas costs. Sales volumes were 2% lower in the first half of 1999 due
to lower usage per customer. The commodity or gas costs in Utah
rates decreased from $2.27 per Decatherm in the first half of 1998 to
$1.72 per Decatherm in the first half of 1999. The reduction
reflects lower prices paid to producers. The Company files for
adjustment of purchased-gas costs with the Utah and Wyoming Public
Service Commissions on a semiannual basis.

Operating and maintenance expenses were 6% higher in the second
quarter of 1999 and 2% higher in the first half of 1999. Higher
information-technology costs more than offset the effect of
labor-cost savings from an early retirement program effective August
1998. In 1999, the savings amounted to approximately $1.3 million per
quarter. Information technology costs have been rising due to
various projects, such as, enhanced communications, improvements in
accounting and customer information systems, testing for Year 2000
contingencies and changes in billing procedures from its
information-technology provider.

Depreciation expense was higher in the 1999 periods presented when
compared with the 1998 periods primarily as a result of continuing
investment in property, plant and equipment, including data
processing systems. Other taxes, which include payroll taxes, were
lower in 1999 as a result of the early retirement program.

The effective income tax rate was 36.6% in the first half of 1999 and
36.8% in the first half of 1998. The Company realized $939,000 of
tight-sands gas-production credits in the 1999 period and $1,089,000
in the 1998 period.

Liquidity and Capital Resources

Operating Activities

Net cash provided from operating activities in the first half of 1999
was $22,819,000 less than was generated in the first half of 1998.
The decrease in cash flow resulted primarily from timing differences
in the collection of purchased gas costs and payment on accounts to
vendors.

Investing Activities

Capital expenditures were $19,960,000 in the first half of 1999
compared with $24,974,000 in the first half of 1998. Capital
expenditures for calendar year 1999 are estimated at $62.5 million.

Financing Activities

On June 30, 1999, Questar Gas received a $40 million contribution of
capital from its parent company. The proceeds of the capital
contribution plus cash generated from operations allowed the Company
to repay $91.1 million of short-term debt borrowed from Questar
Corporation. Loan balances owed to Questar as of June 30, amounted
to $5.6 million in 1999 after the contribution of capital and $25
million in 1998. Capital expenditures for the remainder of 1999 are
expected to be financed with net cash flow provided from operating
activities and borrowings from Questar.

Regulatory and Other Matters

Questar Gas filed an application on November 25, 1998 with the Public
Service Commission of Utah (PSCU) to recover the costs associated
with a contract for the removal of carbon dioxide from the gas
stream. The contract covers the costs of a new plant being
constructed and operated by an affiliate of Questar Gas. The
Division of Public Utilities and the Committee of Consumer Services
have filed testimony questioning the Company's decision to enter into
the contract and opposing pass-through rate coverage for the costs
under the contract. The Committee objected to any cost recovery in
rates for the plant processing costs. Hearings were held on the
issues June 22 and 23. Briefs are to be filed by August 27 and reply
briefs are due September 13. The contract's annual cost of service
ranges between $7.5 - $8.5 million.

Declining usage of gas per customer and increasing operating costs
may cause Questar Gas to file a general rate case. The last general
rate case filed by the Company was in 1995.

Cost savings from consolidating operations enabled Questar Gas to
file on June 10, 1999 for a decrease in general rates in Wyoming.
The decrease is in effect on an interim basis pending hearings and
will reduce annualized revenues by $735,000.

Questar Gas requested pass-through commodity cost increases in Utah
and Wyoming in the second quarter of 1999. The Company was authorized
to collect on an interim basis beginning in the third quarter of
1999, annualized revenues of $16,865,000 in Utah rates and $380,262
in Wyoming rates.

Year 2000 Issues

Questar Corporation established a team to address the issue of
computer programs and embedded computer chips being unable to
distinguish between the year 1900 and the year 2000 (Y2K). The team
has identified 56 projects that are in varying stages of remediation
and a scope that includes Questar and its affiliated companies. The
projects fit into the general classifications of application
software, infrastructure, non-information technology equipment and
critical third-party associations. The estimated cost of the Y2K
project is $5.1 million. Questar Gas' portion of Y2K costs are
estimated to be $2.3 million. The Company expects to be Y2K ready
before the end of 1999. 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.

The infrastructure section of the plan addresses hardware and systems
software other than applications software. Currently, there are 20
projects identified: 0 in start-up, 4 in assessment, 3 in
remediation, 1 in testing and 12 completed and deemed to be Y2K
ready.

The applications software section addresses either the conversion or
replacement of applications software that is not Y2K compliant.
Currently, there are 35 projects in this section: 4 in start-up, 1 in
assessment, 3 in remediation, 3 in testing and 24 completed and
deemed to be Y2K compliant.

Non-information technology equipment 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. Because this section has unique characteristics and is
large, the Company has employed the services of a consultant to
assist in the effort. The project is currently scheduled to be
completed by September 30, 1999.

Inquiries of critical third parties have been taking place with more
contacts scheduled. Contacting parties is scheduled to be completed
by the end of the third quarter 1999. Contingency plans for dealing
with third-party issues will be developed by the end of 1999.

Additional information regarding Questar Gas' Y2K program can be
viewed in Form 10-K for December 31, 1998, filed with the Securities
and Exchange Commission or on Questar's website at
www.questarcorp.com.

Forward-Looking Statements

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

Important assumptions and other significant factors that could cause
actual results to differ materially from those discussed in
forward-looking statements include changes in: general economic
conditions, gas prices and availability of gas supplies, competition,
regulatory issues, weather conditions and other factors beyond the
control of the Company. These other factors include the rate of
inflation, the adverse effects of failure to achieve Y2K compliance
and adverse changes in the business or financial condition of the
Company.

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

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

a. On June 7, 1999, the Public Service Commission of Utah
(PSCU) denied a motion for summary judgment in the application filed
by Questar Gas Company (Questar Gas or the Company) seeking
pass-through treatment of processing costs incurred to remove carbon
dioxide from gas volumes. The Division of Public Utilities and the
Committee of Consumer Services filed the motion seeking a legal
determination that such costs were not eligible for pass-through
treatment. After holding hearings on June 22 and 23, 1999, the PSCU
requested the Company and state agencies to file briefs on the merits
of the issues. See the Company's Report on Form 10-Q for the quarter
ended March 31, 1999, Item 1. Legal Proceedings.

b. On June 11, 1999, the Company filed concurrent applications
with the Public Service Commission of Wyoming (the PSCW), requesting a
general rate decrease of $735,000 and a pass-through commodity cost
increase of $380,262. The PSCW, at an open meeting held on July 29,
1999, authorized Questar Gas to reflect the overall decrease in its
rates on an interim basis effective August 1, 1999. The PSCW has
scheduled an audit of Questar Gas's records in conjunction with the
rate case and will hold hearings after the audit is completed. The
PSCW is monitoring the Company's case before the PSCU involving the
appropriate treatment of costs incurred to remove carbon dioxide and
has indicated that this issue will also be reviewed by it in
conjunction with Questar Gas's pass-through and general rate cases.

c. Questar Gas filed a semi-annual gas cost pass-through
application with the PSCU on June 16, 1999. The Company's
application, which reflects an increase of commodity costs, results in
an annual revenue increase of $16,865,000. The PSCU, by an interim
order, authorized Questar Gas to reflect the requested increase in
rates effective July 1, 1999.

d. The PSCU has scheduled public hearings for September 29,
1999, to consider the merits of a municipality's request that the
Company be required to transport gas to it for resale to residents of
the community. Although it previously ruled that it had the
jurisdiction to determine whether Questar Gas could be required to
offer such service, the PSCU has not determined whether "public
interest" supports it.

e. Questar Gas and several other affiliates of Questar
Corporation are named defendants in an action filed by Jack J.
Grynberg, an independent producer, in Colorado's federal district
court and have officially been served copies of the complaint. The
action was filed under the Federal False Claims Act in early 1998, but
the complaint was sealed until the Department of Justice declined to
prosecute it. The complaint is one of approximately 76 actions filed
by the producer against pipelines and their affiliates. The district
court granted the motion filed by the Questar defendants to stay the
proceedings pending a determination of procedural issues relating to
the consolidation of the cases. The producer's complaints allege
mismeasurement of the heating content of natural gas volumes and
understatement of the value of gas on which royalty payments are due
the federal government. The complaint filed against the Questar
defendants does not include a claim for specific monetary damages.

f. Questar Gas is also involved in two other actions filed by
Mr. Grynberg. One case is currently on appeal to the Tenth Circuit
Court of Appeals, which has not yet scheduled a hearing date. As a
result of acquiring gas purchase contracts from its affiliate, the
Company is responsible for any judgment rendered in a lawsuit that was
tried before a Wyoming district court jury in late 1994. The jury
awarded several million dollars to Mr. Grynberg, but the presiding
federal district court judge, in June of 1998, entered a judgment that
overturned most provisions of the jury verdict. Mr. Grynberg is
appealing the trial judge's action.

Pending the resolution of the appeal by the Tenth Circuit, the
same federal district court judge has stayed action in another case
filed by Mr. Grynberg against Questar Gas and its affiliates alleging
fraud and antitrust violations in addition to the same claims heard in
the first case for a subsequent period of time.

Item 6. Exhibits and Reports on Form 8-K

a. The following exhibit has been filed as part of this report.

Exhibit No. Exhibit

10.1. Joint Annual Management Incentive Plan adopted by
Questar Gas Company, Questar Pipeline Company and
Questar Regulated Services Company as amended and
restated effective May 18, 1999.

b. The Company did not file a Current Report on Form 8-K during
the quarter.

SIGNATURES

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

QUESTAR GAS COMPANY
(Registrant)

August 13, 1999 /s/ D. N. Rose
D. N. Rose
President and Chief Executive
Officer

August 13, 1999 /s/ S. E. Parks
S. E. Parks
Vice President, Treasurer, and
Chief Financial Officer

EXHIBIT INDEX

Exhibit
Number Exhibit

10.1. Joint Annual Management Incentive Plan adopted by Questar
Gas Company, Questar Pipeline Company and Questar Regulated
Services Company as amended and restated effective May 18,
1999.