UNITED STATES 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, 2000
                               -------------------------------------
                                                                  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 number 1-14161
                                               --------

                          KEYSPAN GAS EAST CORPORATION
                         ------------------------------
             (Exact name of Registrant as specified in its charter)

               New York                                     11-3434848
----------------------------------                   ---------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


              175 East Old Country Road, Hicksville, New York 11801
          ------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)



                                 (631) 755-6650
                                ----------------
              (Registrant's telephone number, including area code)


 (Former name, former address and former fiscal year, if changed since last
  report)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

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

   Class of Common Stock                             Outstanding
---------------------------            ----------------------------------------
      $.01 par value                   All Common stock, 100 shares, are held by
                                                KeySpan Corporation

The  registrant  meets  the  conditions  set  forth  in  Generation  Instruction
(H)(1)(a)  and (b) of Form  10-Q and is  therefore  filing  this  form  with the
reduced disclosure format.


<PAGE>




                          KEYSPAN GAS EAST CORPORATION

                                      INDEX
                                      -----

                     Part I.   FINANCIAL INFORMATION                    Page No.
                                                                        --------

Item 1. Financial Statements

        Statement of Income -
        Three and Six Months Ended June 30, 2000 and 1999                    3

        Balance Sheet -
        June 30, 2000 and December 31, 1999                                  4

        Statement of Cash Flows -
        Three and Six Months Ended June 30, 2000 and 1999                    6

        Notes to Financial Statements                                        7

Item 2. Management's Discussion and Analysis Of Financial
        Condition and Results of Operations                                 11



                           Part II. OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K                                   15


Signatures                                                                  16




                                        2

<PAGE>


<TABLE>
                                                          STATEMENT OF INCOME
                                                             (Unaudited)
                                                       (IN THOUSANDS OF DOLLARS)
<CAPTION>
---------------------------------------------------------------------------------------------------------------
                                      THREE MONTHS     Three Months        SIX MONTHS          Six Months
                                          ENDED            Ended              ENDED               Ended
                                      JUNE 30, 2000    June 30, 1999      JUNE 30, 2000       June 30, 1999
---------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>               <C>                   <C>
REVENUES                         $      118,582     $     99,972     $      417,241        $       368,274
                                 --------------     ------------     --------------        ---------------
OPERATING EXPENSES
Purchased gas                            54,946           40,090            198,947                167,588
Operations and maintenance               31,791           24,648             73,434                 53,122
Depreciation, depletion and
     amortization                        11,337            7,071             20,176                 14,239
Operating taxes                          19,866           18,319             47,157                 44,492
                                 --------------     ------------     --------------        ---------------
Total Operating Expenses                117,940           90,128            339,714                279,441
                                 --------------     ------------     --------------        ---------------

OPERATING INCOME                            642            9,844             77,527                 88,833
OTHER INCOME                                179               (8)             2,233                    497
                                 --------------     ------------     --------------        ---------------
INCOME BEFORE INTEREST
   CHARGES  AND INCOME TAXES                821            9,836             79,760                 89,330
INTEREST CHARGES                         12,527           13,189             24,727                 26,658
INCOME TAXES                             (4,327)          (1,169)            18,778                 21,926
                                 --------------     ------------     --------------        ---------------
NET INCOME (LOSS)                $       (7,379)    $     (2,184)    $       36,255        $        40,746
                                 ==============     ============     ==============        ===============
</TABLE>










               See accompanying Notes to the Financial Statements.






                                        3

<PAGE>


<TABLE>
                                                             BALANCE SHEET
                                                       (IN THOUSANDS OF DOLLARS)

<CAPTION>
----------------------------------------------------------------------------------------------------------
                                                             JUNE 30, 2000            December 31, 1999
----------------------------------------------------------------------------------------------------------
                                                             (Unaudited)                (Audited)
<S>                                                          <C>                        <C>
ASSETS

CURRENT ASSETS
   Customer accounts receivable                        $       117,189     $              122,889
   Accounts receivable, intercompany                            45,924                     43,405
   Other accounts receivable                                   118,929                    117,738
   Allowance for uncollectible accounts                        (10,478)                    (5,310)
   Gas in storage, at average cost                              48,665                     72,741
   Materials and supplies, at average cost                       5,915                      5,507
   Other                                                           614                      1,445
                                                            ----------                 ----------
                                                               326,758                    358,415
                                                            ----------                 ----------


PROPERTY
   Gas                                                       1,439,001                  1,393,533
   Accumulated depreciation                                   (260,008)                  (245,956)
                                                            ----------                -----------
                                                             1,178,993                  1,147,577
                                                            ----------                -----------
DEFERRED CHARGES
   Regulatory assets                                           190,239                    179,742
   Deferred income tax                                          31,752                     52,065
   Other                                                         1,143                        373
                                                            ----------                -----------
                                                               223,134                    232,180
                                                            ----------                -----------
TOTAL ASSETS                                           $     1,728,885     $            1,738,172
                                                            ==========                ===========

</TABLE>











               See accompanying Notes to the Financial Statements.



                                        4

<PAGE>


<TABLE>
                                                             BALANCE SHEET
                                                       (IN THOUSANDS OF DOLLARS)

<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                JUNE 30, 2000          December 31, 1999
-----------------------------------------------------  ----- ---------------------------------------------------
                                                                  (Unaudited)              (Audited)
LIABILITIES AND CAPITALIZATION
<S>                                                                 <C>                     <C>
CURRENT LIABILITIES
   Current maturities of long-term debt                $                    -  $              397,000
   Accounts payable and accrued expenses                              136,809                 142,481
   Taxes accrued                                                        9,350                   5,005
   Customer deposits                                                    4,031                   3,845
                                                             ----------------        ----------------
                                                                      150,190                 548,331
                                                             ----------------        ----------------

INTERCOMPANY ACCOUNTS PAYABLE, LONG-TERM                              203,691                 258,079
                                                             ----------------        ----------------

DEFERRED CREDITS AND OTHER LIABILITIES
   Regulatory liabilities                                              26,510                  20,888
   Operating reserves and other                                        83,262                  81,896
                                                             ----------------        ----------------
                                                                      109,772                 102,784
                                                             ----------------        ----------------

CAPITALIZATION
   Premium on capital stock                                           657,862                 657,862
   Retained earnings                                                   31,466                  (4,788)
                                                              ---------------        ----------------
    Total common shareholders' equity                                 689,328                 653,074
   Long-term debt                                                     575,904                 175,904
                                                              ---------------        ----------------
TOTAL CAPITALIZATION                                                1,265,232                 828,978
                                                             ----------------        ----------------

TOTAL LIABILITIES AND CAPITALIZATION                   $            1,728,885  $            1,738,172
                                                             ================        ================
</TABLE>












               See accompanying Notes to the Financial Statements.



                                        5

<PAGE>



<TABLE>
                                                        STATEMENT OF CASH FLOWS
                                                             (Unaudited)
                                                       (IN THOUSANDS OF DOLLARS)

<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                             THREE MONTHS           Three Months        SIX MONTHS        Six Months
                                                                ENDED                  Ended               ENDED             Ended
                                                            JUNE 30, 2000          June 30, 1999       JUNE 30, 2000   June 30, 1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                   <C>                 <C>               <C>
OPERATING ACTIVITIES
Net Income (Loss)                                        $       (7,379)   $           (2,184)    $        36,255     $      40,746
ADJUSTMENTS TO RECONCILE NET INCOME TO
  NET CASH PROVIDED BY (USED IN)
  OPERATING ACTIVITIES
    Depreciation and amortization                                11,337                 7,071              20,176            14,239
    Deferred income tax                                          13,598                21,600              18,950            44,695
CHANGES IN ASSETS AND LIABILITIES
    Accounts receivable                                          48,890                86,218               7,158            11,753
    Materials and supplies and
         gas in storage                                         (33,972)              (29,515)             23,668            28,018
    Accounts payable and accrued expenses                        15,382               (31,626)             (1,327)          (20,725)
    Other                                                        (6,085)                9,964              (6,539)              236
                                                         --------------------------------------------------------------------------
Net Cash Provided by Operating Activities                        41,771                61,528              98,341           118,962
                                                         --------------------------------------------------------------------------

INVESTING ACTIVITIES
Capital expenditures                                            (25,058)              (20,984)            (46,953)          (37,780)
                                                         --------------------------------------------------------------------------
Net Cash (Used in) Investing Activities                         (25,058)              (20,984)            (46,953)          (37,780)
                                                         --------------------------------------------------------------------------

FINANCING ACTIVITIES
Issuance of long-term debt                                            -                     -             400,000                 -
Repayment of long-term debt                                           -                     -            (397,000)                -
Intercompany accounts payable
     - long-term debt                                           (16,713)              (40,544)            (54,388)          (81,182)
                                                         --------------------------------------------------------------------------
Net Cash (Used in) Financing Activities                         (16,713)              (40,544)            (51,388)          (81,182)
                                                         --------------------------------------------------------------------------
Net Increase in Cash and Cash Equivalents                             -                     -                   -                 -
                                                         ==========================================================================
Cash and cash equivalents at
    beginning of period                                      $        -      $              -        $          -      $          -
Net Increase in cash and cash equivalents                             -                     -                   -                 -
                                                         --------------------------------------------------------------------------
Cash and Cash Equivalents at                                 $        -      $              -        $          -      $          -
     End of Period  (See Note 5)
                                                         ==========================================================================
</TABLE>




               See accompanying Notes to the Financial Statements.



                                        6

<PAGE>



NOTES TO FINANCIAL STATEMENTS

    KeySpan Gas East Corporation, d/b/a KeySpan Energy Delivery Long Island (the
    "Company") is a wholly owned subsidiary of KeySpan Corporation d/b/a KeySpan
    Energy (the "Parent").  The Company  provides gas  distribution  services to
    approximately  478,000  customers in the Long Island  counties of Nassau and
    Suffolk and the Rockaway Peninsula of the Borough of Queens.

1.    BASIS OF PRESENTATION

    In  the  opinion  of  the  Company,  the  accompanying  unaudited  Financial
    Statements contain all adjustments necessary to present fairly the financial
    position  of the  Company  as of  June  30,  2000,  and the  results  of its
    operations  and cash flows for the three and six months  ended June 30, 2000
    and June 30, 1999. The accompanying  financial  statements should be read in
    conjunction  with  the  financial  statements  and  notes  included  in  the
    Company's 1999 Annual Report on Form 10-K.  Income from interim  periods may
    not be indicative of future results. Certain  reclassifications were made to
    conform prior period financial  statements with the current period financial
    statement presentation.  Other than as noted,  adjustments were of a normal,
    recurring nature.

2.    REVENUES

    The gas distribution  business is influenced by seasonal weather conditions.
    Annual gas revenues are  substantially  realized  during the heating  season
    (November  1 to April  30) as a result of the large  proportion  of  heating
    sales,  primarily  residential,  compared  with  total  sales.  Accordingly,
    results of operations for gas distribution  operations historically are most
    favorable in the three  months  ended March 31, with  results of  operations
    being  next  most   favorable  in  the  three  months  ended   December  31.
    Historically,  results  for  the  quarters  ended  June  30  are  marginally
    profitable  or  unprofitable,  and  losses  are  generally  incurred  in the
    quarters ended September 30.

    The  Company  operates  under a  utility  tariff  that  contains  a  weather
    normalization adjustment that largely offsets shortfalls or excesses of firm
    net revenues  (i.e.,  revenues  less gas costs and revenue  taxes)  during a
    heating season due to variations from normal weather.

3.    ENVIRONMENTAL MATTERS

    The Company has  identified  nineteen  manufactured  gas plant ("MGP") sites
    which  were   historically   owned  or  operated  by  the  Company  (or  its
    predecessors).  These former sites, some of which are no longer owned by the
    Company,   have  been  identified  to  the  New  York  State  Department  of
    Environmental  Conservation  ("DEC") for inclusion on appropriate waste site
    inventories.

    The Company  presently  estimates the cost of its MGP-related  environmental
    cleanup activities will be approximately $76 million;  which amount has been
    accrued  by the  Company  as its  current  best  estimate  of its  aggregate
    environmental  liability for known sites. The currently-known  conditions of
    the former MGP sites,  their period and  magnitude of  operation,  generally
    observed cleanup



                                        7

<PAGE>



    requirements and costs in the industry,  current land use and ownership, and
    possible reuse have been  considered in establishing  contingency  reserves.
    The  Company  believes  that in the  aggregate,  the accrued  liability  for
    investigation  and  remediation  of  the  MGP  sites  identified  above  are
    reasonable   estimates  of  likely  cost  within  a  range  of   reasonable,
    foreseeable costs.

    Eleven sites identified are currently the subject of Administrative  Consent
    Orders  ("ACO")  with  the DEC and one  identified  site is  subject  to the
    negotiation of an agreement under the DEC's Voluntary Clean-up Program.  The
    Company's  remaining MGP sites may not become subject to ACOs in the future;
    accordingly no liability has been accrued for these sites.

    The current  rate plan in effect  provides  for  recovery  of  environmental
    costs.  At June 30, 2000,  the Company has  reflected a regulatory  asset of
    approximately $79 million. Expenditures incurred to date by the Company with
    respect to MGP-related activities total $5.7 million.

4.    ISSUANCE OF LONG-TERM DEBT

    The Company filed a shelf  registration  statement  with the  Securities and
    Exchange  Commission ("SEC") in December 1999 for the issuance of up to $600
    million of Medium Term Notes.  On February 1, 2000,  the Company issued $400
    million  7.875%  Notes due  February  1,  2010.  The net  proceeds  from the
    issuance were used to repay the Parent for its costs in  extinguishing  $397
    million of promissory  notes due LIPA that matured in June 1999.  The Medium
    Term Notes are fully and  unconditionally  guaranteed by the Parent. At June
    30, 2000,  $200 million of Medium Term Notes remain  available  for issuance
    under the shelf registration statement.

5.    RELATED PARTY TRANSACTIONS

    The Company engages in various  transactions  with affiliates of the Parent.
    In  addition,  all  cash  collected  from the  Company's  gas  customers  is
    collected and held by the Parent's corporate and administrative  subsidiary.
    Further,  all  payments to third  parties for  Company  payables,  including
    labor, are made by the Parent's corporate and  administrative  subsidiary on
    behalf of the Company. The Company is also obligated to reimburse the Parent
    for  the  Company's  allocated  share  of  principal  and  interest  on  the
    promissory   notes  due  to  the  Long  Island  Power  Authority   ("LIPA").
    Accordingly,  accrued  interest  related to these  notes is  recorded  as an
    intercompany  payable.  At June 30, 2000 and December 31, 1999,  the Company
    had current  intercompany  accounts receivable balances of $45.9 million and
    $43.4 million  respectively,  from the Parent's corporate and administrative
    subsidiary. These balances approximate twelve months of interest payments on
    the Company's  long-term debt  outstanding at June 30, 2000 and December 31,
    1999.

    The balance of intercompany  accounts payable amounted to $203.7 million and
    $258.1 million at June 30, 2000 and December 31, 1999,  respectively.  These
    balances  reflect,  primarily,  the  Company's  allocated  pension and other
    postretirement liability due to the Parent, as well as natural gas purchases
    and taxes payable.




                                        8

<PAGE>



    The Company incurs expenses related to services it provides to affiliates of
    the  Parent.  These  expenses  are offset by  intercompany  billings  to the
    various  affiliates  of the  Parent  for which  the  Company  provides  such
    services.  Billings  to various  affiliates  of the Parent  amounted to $0.6
    million and $1.0  million for the three and six months  ended June 30, 2000,
    respectively  and $0.7 million and $1.5 million for the three and six months
    ended June 30, 1999, respectively. These billings reduced operating expenses
    in the accompanying Income Statement.

6.    ACQUISITION OF EASTERN ENTERPRISES

    On  November  4,  1999,  the  Parent  and  Eastern  Enterprises  ("Eastern")
    announced that the companies had signed a definitive  merger agreement under
    which the Parent will  acquire all of the common stock of Eastern for $64.00
    per share in cash,  subject to adjustment.  The Agreement and Plan of Merger
    is  included  as an exhibit to the  Parent's  Form 8-K filed on  November 5,
    1999. The  transaction has a total value of  approximately  $2.5 billion and
    will be accounted for utilizing purchase accounting.

    In connection with the merger, Eastern has amended its merger agreement with
    EnergyNorth,  Inc. ("EnergyNorth") to provide for an all cash acquisition by
    Eastern of  EnergyNorth  shares at a price per share of  $61.13,  subject to
    adjustment.  The  restructured  EnergyNorth  merger  is  expected  to  close
    contemporaneously  with the  KeySpan/Eastern  transaction.  The  EnergyNorth
    transaction  has a total  value  of  approximately  $250  million.  Proforma
    financial  statements  for the  Eastern  and  EnergyNorth  transactions  are
    included as an exhibit to the Parent's June 30, 2000 Form 10-Q.

    Following the closing of these transactions,  the Parent will become subject
    to the  regulation  of the SEC as a  registered  holding  company  under the
    Public  Utility  Holding  Company  Act of 1935,  as  amended.  As such,  the
    corporate  and  financial  activities  of the Parent  and its  subsidiaries,
    including  such entities'  ability to pay dividends,  will be subject to SEC
    regulation.  The  merger  is  conditioned  upon  the  approval  of the  SEC.
    Shareholders of both Eastern and  EnergyNorth,  as well as the New Hampshire
    Public  Utility  Commission  (with  respect  to  Eastern's   acquisition  of
    EnergyNorth) have approved the transactions. The Parent anticipates that the
    transaction will be consummated in the fourth quarter of 2000, but is unable
    to determine when or if the required SEC approval will be obtained.

     Eastern owns and operates Boston Gas Company,  Colonial Gas Company,  Essex
     Gas Company,  Midland  Enterprises  Inc.,  Transgas  Inc.,  and  ServicEdge
     Partners, Inc.

7.    NEW FINANCIAL ACCOUNTING STANDARDS

     In June 1999, the Financial  Accounting  Standards  Board  ("FASB")  issued
     Statement of Financial  Accounting  Standard ("SFAS") No. 137,  "Accounting
     for  Derivative  Instruments  and  Hedging  Activities  -  Deferral  of the
     Effective  Date of SFAS No. 133." SFAS No. 137 defers the effective date of
     SFAS No. 133 to fiscal years  beginning  after July 15,  2000.  The Company
     will therefore adopt SFAS No. 133 in the first quarter of fiscal year 2001.
     SFAS No. 133 establishes accounting



                                        9

<PAGE>



    and  reporting   standards  for  derivative   instruments  and  for  hedging
    activities.  It requires that an entity  recognize all derivatives as either
    assets or  liabilities  in the  statement of financial  position and measure
    those instruments at fair value.

    In June  2000,  the  FASB  issued  SFAS No.  138,  "Accounting  for  Certain
    Derivative Instruments and Certain Hedging Activities - An Amendment of FASB
    Statement  No  133."  SFAS No.  138  amends  the  accounting  and  reporting
    standards of SFAS No. 133 for a number of transactions. The most significant
    amendment  to SFAS 133 as it  relates  to the  Company  is that  the  normal
    purchases and normal sales exception found in SFAS 133 may now be applied to
    contracts that implicitly or explicitly permit net settlement, and contracts
    that have a market mechanism to facilitate net settlement.  Therefore, under
    SFAS  138,  the  Company's  gas  procurement  contracts  are not  considered
    derivative financial  instruments.  As of June 30, 2000, the Company did not
    have any derivative financial instruments.






                                       10

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

NET REVENUES AND GAS SALES QUANTITIES

The table below  highlights net revenues and sales  quantity  statistics for the
Company for the periods indicated.
<TABLE>
<CAPTION>
                                                                                                       (IN THOUSANDS OF DOLLARS)
-----------------------------------------------------------------------------------------------------------------------------------
                                                   Three Months           Three Months             Six Months             Six Months
                                                      Ended                  Ended                   Ended                   Ended
                                                  June 30, 2000          June 30, 1999           June 30, 2000         June 30, 1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                     <C>                    <C>                    <C>
Revenues                                      $    118,582 $               99,972  $              417,241  $             368,274
Purchased gas                                       54,946                 40,090                 198,947                167,588
Revenue taxes                                        5,283                  5,439                  17,073                 18,339
--------------------------------------------------------------------------------------------------------------------------------
Net Revenues                                        58,353                 54,443                 201,221                182,347
--------------------------------------------------------------------------------------------------------------------------------
Firm gas sales (MDTH)                                9,519                  8,261                  36,398                 33,502
Firm transportation (MDTH)                           1,009                    831                   3,269                  3,003
Transportation -
    Electric Generation (MDTH)                      17,845                 20,923                  30,631                 29,411
Other sales (MDTH)                                   3,273                  4,130                  13,916                 12,855
Warmer than normal                                    8.7%                  14.2%                    5.9%                   9.1%
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
                  An MDTH is 10,000 therms (British  Thermal Units) and reflects
                     the heating content of approximately one million cubic feet
                     of  gas.  A  therm   reflects   the   heating   content  of
                     approximately 100 cubic feet of gas.


Net gas revenues  increased  during the second quarter of 2000,  compared to the
second  quarter of last year, by $3.9 million or 7.2%.  For the six months ended
June 30, 2000, net gas revenues  increased by $18.9 million or 10.4% compared to
the corresponding period of last year. The increase in net gas revenues for both
periods was due to continued gas sales growth. Long Island has a low natural gas
saturation rate and significant  gas-sales growth  opportunities are believed to
be available.  The Company  estimates that less than 30% of the  residential and
the multi-family markets, and 70% of the commercial market currently use natural
gas for space  heating.  The Company  will  continue to seek growth  through the
expansion  of its  distribution  system as well as  through  the  conversion  of
residential homes from oil-to-gas for space heating purposes, and the pursuit of
opportunities to grow multi- family, industrial and commercial markets.




                                       11

<PAGE>



The  increase  in gas costs for the three and six  months  ended  June 30,  2000
compared to the  corresponding  periods last year was due to the increase in gas
sales  growth and  generally  higher gas  prices.  Variations  in gas costs have
little impact on operating  results as the Company's  current gas rate structure
includes a gas adjustment  clause,  pursuant to which variations  between actual
gas costs and gas cost recoveries are deferred and  subsequently  refunded to or
collected from customers.

Firm gas sales and transportation  quantities increased during the three and six
months ended June 30, 2000, respectively over the corresponding periods in 1999,
due to an increase in firm sales resulting from gas-sales growth and an increase
in firm gas  transportation  quantities as the Company continues its natural gas
deregulation  initiatives.  The  Company's  net  margins  are  not  affected  by
customers  opting to  purchase  their gas  supply  from  sources  other than the
Company,  since distribution  rates charged to transportation  customers are the
same as those charged to full sales service customers.

Transportation   quantities   related  to  electric   generation   reflects  the
transportation of gas to the Parent's electric generating  facilities located on
Long Island. Net revenues from these services are minimal.

Other sales quantities include on-system  interruptible  quantities,  off-system
sales  quantities  (sales made to  customers  outside of the  Company's  service
territory)  and related  transportation.  A subsidiary  of the Parent,  which is
responsible  for gas  procurement  and off-system  sales,  has an agreement with
Coral Energy  Resources,  L.P., a subsidiary  of Shell Oil Company  ("Coral") in
which Coral assists in the origination,  structuring, valuation and execution of
energy-related  transactions on behalf of the Company.  A sharing exists between
gas ratepayers and the Company for  off-system gas  transactions;  the remaining
profits on such transactions are then shared with Coral. The Company also shares
in revenues arising from certain transactions initiated by Coral.

OPERATING EXPENSES

Operations and  maintenance  expense  increased by $7.1 million,  or 29%, in the
second quarter of 2000 compared to the  corresponding  quarter last year, and by
$20.3 million, or 38% for the six months ended June 30, 2000 compared to the six
months ended June 30, 1999.  Operations and maintenance  expense in both periods
reflects,   generally,  higher  labor  costs  and  associated  employee  benefit
expenses,  additional provisions for uncollectible accounts and higher marketing
costs and  incentives  related to the Company's gas expansion  initiatives.  The
increase in depreciation and amortization  expense generally  reflects continued
property  additions and the amortization of certain  regulatory items previously
deferred and now being recovered through revenue recovery  mechanisms.  Further,
operating  taxes which include state and local taxes on property have  increased
as the applicable property base and tax rates generally have increased.

OTHER EXPENSES

Income tax expense  reflects  the lower level of pre-tax  income for the quarter
and six months ended June 30, 2000,  compared to the corresponding  periods last
year.




                                       12

<PAGE>



LIQUIDITY, CAPITAL EXPENDITURES AND FINANCING

LIQUIDITY

The Company does not maintain a cash balance.  All cash  generated from billings
to  customers  for gas  service is  maintained  by the  Parent's  corporate  and
administrative  subsidiary.  Further,  all payments to third parties for Company
payables, including labor, are made by the Parent's corporate and administrative
subsidiary on behalf of the Company.  (See Note 5 to the  Financial  Statements,
"Related Party  Transactions".) The Company records as an intercompany  accounts
receivable  or  intercompany  accounts  payable to the  Parent's  corporate  and
administrative   subsidiary  the  difference  between  the  cash  received  from
customers compared to third party payments. At June 30, 2000, the Company had an
intercompany  accounts  payable of $203.7 million due to the Parent's  corporate
and administrative  subsidiary.  In addition, at June 30, 2000 the Company had a
current  intercompany  accounts  receivable  balance of $45.9  million  from the
Parent's corporate and administrative subsidiary, approximating twelve months of
interest payments on the Company's long-term debt outstanding at June 30, 2000.

The Company  estimates  that cash provided  from  operating  activities  will be
sufficient  for the  Company  to satisfy  its  obligations  for the  foreseeable
future. To the extent the Company requires  additional  funding, on a short-term
basis,  the  Company  has the  ability to borrow such funds from the Parent or a
Parent subsidiary.

CAPITAL EXPENDITURES

Capital  expenditures  were $25.1  million and $47.0 million for the quarter and
six months ended June 30, 2000, respectively. The Company's capital expenditures
for the quarter and six months ended June 30, 1999 were $21.0  million and $37.8
million,  respectively.  Capital expenditures were primarily for the renewal and
replacement of mains and services and for the expansion of the gas  distribution
system on Long  Island.  The amount of capital  expenditures  is  reviewed on an
ongoing  basis and can be  affected by timing,  scope and changes in  investment
opportunities.

FINANCING

The Company  has an  effective  shelf  registration  statement  on file with the
Securities  and  Exchange  Commission  for the issuance of up to $600 million of
Medium Term Notes.  On February 1, 2000,  the Company issued $400 million 7.875%
Notes due February 1, 2010.  The net proceeds  from this  issuance  were used to
repay the Parent for its costs in extinguishing $397 million of promissory notes
due  LIPA  that   matured  in  June  1999.   The  notes  issued  are  fully  and
unconditionally  guaranteed  by the Parent.  At June 30,  2000,  $200 million of
Medium Term Notes remain  available  for issuance  under the shelf  registration
statement.






                                       13

<PAGE>




GAS DISTRIBUTION - RATE MATTERS

By  orders  dated  February  5,  1998 and  April  14,  1998 the  Public  Service
Commission  of the  State of New  York  ("NYPSC")  approved  a  Stipulation  and
Agreement  ("Stipulation")  among KeySpan Energy  Delivery New York, Long Island
Lighting Company,  the Staff of the NYPSC and six other parties that established
gas rates for the Company.  (For more  information on these  agreements refer to
the Company's Annual Report on Form 10-K for the year ended December 31, 1999.)

ENVIRONMENTAL MATTERS

The Company is subject to various  federal,  state and local laws and regulatory
programs  related  to  the   environment.   Ongoing   environmental   compliance
activities,  which  have  not  been  material,  are  charged  to  operation  and
maintenance activities. The Company estimates that the remaining minimum cost of
its  MGP-related  environmental  cleanup  activities will be  approximately  $76
million and has recorded a related  liability  for such amount.  Further,  as of
June 30, 2000, the Company has expended a total of $5.7 million.  (See Note 3 to
the Financial Statements "Environmental Matters".)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Form 10-Q concerning expectations, beliefs,
plans,  objectives,   goals,  strategies,   future  events  or  performance  and
underlying  assumptions and other  statements which are other than statements of
historical facts, are "forward-looking statements" within the meaning of Section
21E of the  Securities  Exchange Act of 1934, as amended.  Without  limiting the
foregoing, all statements relating to the Company's future outlook,  anticipated
capital  expenditures,  future cash flows and  borrowings,  pursuit of potential
future  acquisition  opportunities  and sources of funding  are  forward-looking
statements.  Such  forward-looking  statements reflect numerous  assumptions and
involve  a number of risks and  uncertainties  and  actual  results  may  differ
materially from those discussed in such statements. Among the factors that could
cause actual results to differ  materially  are:  available  sources and cost of
fuel;  federal  and state  regulatory  initiatives  that  increase  competition,
threaten cost and investment recovery,  and impact rate structures;  the ability
of the Company to successfully  reduce its cost structure;  inflationary  trends
and interest rates;  and other risks detailed from time to time in other reports
and other  documents  filed by the  Company  with the  Securities  and  Exchange
Commission.  For any of these  statements,  the Company claims the protection of
the  safe  harbor  for  forward-looking  information  contained  in the  Private
Securities Litigation Reform Act of 1995, as amended.




                                       14

<PAGE>



PART II OTHER INFORMATION
-------------------------

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

(27)*  Financial  Data  Schedule on Schedule U-T for the quarter  ended June 30,
2000.





-------------------------
*Filed Herewith




                                       15

<PAGE>


                          KEYSPAN GAS EAST CORPORATION

                                    SIGNATURE

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



                                                 KEYSPAN GAS EAST CORPORATION
                                                 ----------------------------
                                                        (Registrant)



Date: August 10, 2000                            /s/ Anne C. Jordan
                                             ---------------------------------
                                                     Anne C. Jordan
                                                  Vice President and Chief
                                                  Financial Officer

Date: August 10, 2000                            /s/ Paul R. Nick
                                             ---------------------------------
                                                     Paul R. Nick
                                                 Controller and Chief Accounting
                                                 Officer





                                       16