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                 September 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 Nine Months Ended September 30, 2000 and 1999             3

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

        Statement of Cash Flows -
        Nine Months Ended September 30, 2000 and 1999                       6

        Notes to Financial Statements                                       7

Item 2. Management's Discussion and Analysis Of Financial
           Condition and Results of Operations                               10



                     Part II.   OTHER INFORMATION

Item 6 - Exhibits and Reports on Form 8-K                                    14


Signatures                                                                   15




                                        2

<PAGE>


<TABLE>
                                                          STATEMENT OF INCOME
                                                             (Unaudited)
                                                       (IN THOUSANDS OF DOLLARS)
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                            Three Months            Three Months               Nine Months               Nine Months
                                                Ended                   Ended                     Ended                     Ended
                                            September 30,          September 30,             September 30,             September 30,
                                                2000                    1999                      2000                      1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                       <C>                      <C>                       <C>
REVENUES                               $       95,229     $              72,956     $             512,470     $             441,228
                                       --------------     ---------------------     ---------------------     ---------------------
OPERATING EXPENSES
Purchased gas                                  43,517                    28,102                   242,464                   195,690
Operations and maintenance                     28,785                    33,340                   102,219                    86,457
Depreciation, depletion and
     amortization                              10,374                     7,155                    30,550                    21,394
Operating taxes                                19,400                    16,953                    66,557                    61,446
                                       --------------     ---------------------     ---------------------     ---------------------
Total Operating Expenses                      102,076                    85,550                   441,790                   364,987
                                       --------------     ---------------------     ---------------------     ---------------------

OPERATING INCOME                               (6,847)                  (12,594)                   70,680                    76,241
OTHER INCOME                                       12                       449                     2,245                       945
                                       --------------     ---------------------     ---------------------     ---------------------
INCOME BEFORE INTEREST
   CHARGES  AND INCOME TAXES                   (6,835)                  (12,145)                   72,925                    77,186
INTEREST CHARGES                               13,501                    11,603                    38,228                    38,264
INCOME TAXES                                   (7,341)                   (8,585)                   11,437                    13,344
                                       --------------     ---------------------     ---------------------     ---------------------
NET INCOME (LOSS)                      $      (12,995)    $             (15,163)    $              23,260     $              25,578
                                       ==============     =====================     =====================     =====================
</TABLE>










               See accompanying Notes to the Financial Statements.





                                        3

<PAGE>


<TABLE>
                                                             BALANCE SHEET
                                                       (IN THOUSANDS OF DOLLARS)

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

CURRENT ASSETS
   Customer accounts receivable                                $                 79,271     $                122,889
   Accounts receivable, intercompany                                             45,924                       43,405
   Other accounts receivable                                                     62,088                      117,738
   Allowance for uncollectible accounts                                          (7,814)                      (5,310)
   Gas in storage, at average cost                                              107,125                       72,741
   Materials and supplies, at average cost                                        7,031                        5,507
   Other                                                                            516                        1,445
                                                                     ------------------           ------------------
                                                                                294,141                      358,415
                                                                     ------------------           ------------------


PROPERTY
   Gas                                                                        1,468,351                    1,393,533
   Accumulated depreciation                                                    (266,602)                    (245,956)
                                                                     ------------------           ------------------
                                                                              1,201,749                    1,147,577
                                                                     ------------------           ------------------
DEFERRED CHARGES
   Regulatory assets                                                            190,913                      179,742
   Deferred income tax                                                           27,694                       52,065
   Other                                                                          1,684                          373
                                                                     ------------------           ------------------
                                                                                220,291                      232,180
                                                                     ------------------           ------------------
TOTAL ASSETS                                                   $              1,716,181     $              1,738,172
                                                                     ==================           ==================
</TABLE>












               See accompanying Notes to the Financial Statements.



                                        4

<PAGE>


<TABLE>
                                                             BALANCE SHEET
                                                       (IN THOUSANDS OF DOLLARS)

<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                  SEPTEMBER 30, 2000              December 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
                                                                                   (Unaudited)                        (Audited)
<S>                                                                                  <C>                             <C>
LIABILITIES AND CAPITALIZATION

CURRENT LIABILITIES
   Current maturities of long-term debt                            $                           -  $                     397,000
   Accounts payable and accrued expenses                                                 123,416                        142,481
   Taxes accrued                                                                          (1,019)                         5,005
   Customer deposits                                                                       3,986                          3,845
                                                                        ------------------------       ------------------------
                                                                                         126,383                        548,331
                                                                        ------------------------       ------------------------

INTERCOMPANY ACCOUNTS PAYABLE, LONG-TERM                                                 227,794                        258,079
                                                                        ------------------------       ------------------------

DEFERRED CREDITS AND OTHER LIABILITIES
   Regulatory liabilities                                                                 27,269                         20,888
   Operating reserves and other                                                           82,498                         81,896
                                                                        ------------------------       ------------------------
                                                                                         109,767                        102,784
                                                                        ------------------------       ------------------------

CAPITALIZATION
   Premium on capital stock                                                              657,862                        657,862
   Retained earnings                                                                      18,471                         (4,788)
                                                                        ------------------------       ------------------------
    Total common shareholders' equity                                                    676,333                        653,074
   Long-term debt                                                                        575,904                        175,904
                                                                        ------------------------       ------------------------
TOTAL CAPITALIZATION                                                                   1,252,237                        828,978
                                                                        ------------------------       ------------------------

TOTAL LIABILITIES AND CAPITALIZATION                               $                   1,716,181  $                   1,738,172
                                                                        ========================       ========================
</TABLE>










               See accompanying Notes to the Financial Statements.



                                        5

<PAGE>



<TABLE>
                                                        STATEMENT OF CASH FLOWS
                                                             (Unaudited)
                                                       (IN THOUSANDS OF DOLLARS)
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                                                 NINE MONTHS ENDED                    Nine Months Ended
                                                                SEPTEMBER 30, 2000                    September 30, 1999
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                                  <C>
OPERATING ACTIVITIES
Net Income                                                  $              23,260        $                     25,578
ADJUSTMENTS TO RECONCILE NET INCOME TO
  NET CASH PROVIDED BY (USED IN)
  OPERATING ACTIVITIES
    Depreciation and amortization                                          30,550                              21,394
    Deferred income tax                                                    23,639                              49,670
CHANGES IN ASSETS AND LIABILITIES
    Accounts receivable                                                    99,253                              54,706
    Materials and supplies and
         gas in storage                                                   (35,908)                            (12,292)
    Accounts payable and accrued expenses                                 (25,134)                              9,130
    Other                                                                 (12,202)                            (22,901)
                                                                ------------------------------------------------------
Net Cash Provided by Operating Activities                                 103,458                             125,285
                                                                ------------------------------------------------------

INVESTING ACTIVITIES
Capital expenditures                                                      (76,173)                            (61,344)
                                                                ------------------------------------------------------
Net Cash (Used in) Investing Activities                                   (76,173)                            (61,344)
                                                                ------------------------------------------------------

FINANCING ACTIVITIES
Issuance of long-term debt                                                400,000                                   -
Repayment of long-term debt                                              (397,000)                                  -
Intercompany accounts payable
     - long-term debt                                                     (30,285)                            (63,941)
                                                                ------------------------------------------------------
Net Cash (Used in) Financing Activities                                   (27,285)                            (63,941)
                                                                ------------------------------------------------------
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  September  30,  2000,  and the results of its
    operations  for the three  and nine  months  ended  September  30,  2000 and
    September  30,  1999,  as well as cash  flows  for  the  nine  months  ended
    September  30,  2000 and  September  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



                                        7

<PAGE>



    of the former MGP sites, their period and magnitude of operation,  generally
    observed cleanup  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 September 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 $5.8 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 the Long Island Power  Authority  ("LIPA")
    that   matured  in  June  1999.   The  Medium   Term  Notes  are  fully  and
    unconditionally  guaranteed by the Parent. Currently, $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 LIPA. Accordingly, accrued interest related to these
    notes is recorded as an  intercompany  payable.  At  September  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
    September 30, 2000 and December 31, 1999.

    The balance of intercompany  accounts payable amounted to $227.8 million and
    $258.1  million at September  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 $0.4
    million and $1.5 million for the three and nine months ended  September  30,
    2000,  respectively and $1.3 million and $2.8 million for the three and nine
    months  ended  September  30, 1999,  respectively.  These  billings  reduced
    operating expenses in the accompanying Statement of Income.

6.    ACQUISITION OF EASTERN ENTERPRISES

    On November 8, 2000, the Parent acquired Eastern Enterprises ("Eastern"),  a
    Massachusetts  business  trust  and the  parent  of  several  gas  utilities
    operating  in  Massachusetts.  Also on  November 8, 2000,  Eastern  acquired
    EnergyNorth,  Inc.,  the parent of a gas  utility  operating  in central New
    Hampshire. The acquisitions are valued at approximately $2.5 billion - $1.96
    billion in equity and the  assumption  of $550  million in debt.  The Parent
    will  ultimately  finance  the  acquisitions  by  issuing  $1.65  billion in
    long-term debt and the balance with commercial paper. The Agreement and Plan
    of Merger is  included  as an  exhibit  to the  Parent's  Form 10-K filed on
    December 31, 1999.

    Following the closing of these transactions,  the Parent became 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,  are
    subject to regulation by the Securities and Exchange Commission ("SEC").


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 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  instruments.  As of September 30, 2000, the Company did not have
    any derivative instruments.



                                        9

<PAGE>




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


RESULTS OF OPERATIONS

NET REVENUES AND GAS SALES QUANTITIES
<TABLE>
The table below  highlights net revenues and sales  quantity  statistics for the
Company for the periods indicated.
<CAPTION>
                                                                                                       (IN THOUSANDS OF DOLLARS)
------------------------------------------------------------------------------------------------------------------------------------
                                                   Three Months           Three Months            Nine Months            Nine Months
                                                      Ended                  Ended                   Ended                  Ended
                                                  September 30,          September 30,           September 30,         September 30,
                                                       2000                   1999                    2000                  1999
----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                    <C>                    <C>                    <C>
Revenues                                      $       95,229 $               72,956  $              512,470  $             441,228
Purchased gas                                         43,517                 28,102                 242,464                195,690
Revenue taxes                                          4,036                  3,335                  21,109                 21,674
----------------------------------------------------------------------------------------------------------------------------------
Net Revenues                                          47,676                 41,519                 248,897                223,864
----------------------------------------------------------------------------------------------------------------------------------
Firm gas sales (MDTH)                                  5,740                  5,008                  42,138                 38,510
Firm transportation (MDTH)                               754                    720                   4,023                  3,723
Transportation -
    Electric Generation (MDTH)                        14,711                 32,352                  45,342                 61,763
Other sales (MDTH)                                     2,353                  5,334                  16,269                 18,189
Warmer than normal                                    N/A                     N/A                    5.9%                   9.7%
------------------------------------------------------------------------------------------------------------------------------------
</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 third  quarter of 2000,  compared to the
third quarter of last year, by $6.2 million or 14.8%.  For the nine months ended
September  30,  2000,  net gas  revenues  increased  by $25.0  million  or 11.1%
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.



                                       10

<PAGE>



The increase in gas costs for the three and nine months ended September 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 nine
months ended September 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 decreased by $4.6 million,  or 13.7%, in the
third quarter of 2000 compared to the corresponding  quarter last year. However,
for the nine months ended  September  30, 2000 compared to the nine months ended
September 30, 1999,  operations and  maintenance  expense has increased by $15.8
million,  or 18.2%  reflecting,  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 the effects of 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.








                                       11

<PAGE>



OTHER EXPENSES

The  increase in  interest  expense for the  quarter  ended  September  30, 2000
compared to the  corresponding  period last year is due to the  issuance of $400
million of medium term notes in February 2000.  Income tax expense  reflects the
level of pre-tax  income for the  quarter and nine months  ended  September  30,
2000, compared to the corresponding periods last year.


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 September 30, 2000, the Company
had an  intercompany  accounts  payable of $227.8  million  due to the  Parent's
corporate and administrative  subsidiary. In addition, at September 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
September 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 $76.2 million for the nine months ended September 30,
2000,  and $61.3 million for the nine months ended  September 30, 1999.  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.







                                       12

<PAGE>



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. Currently, $200 million of Medium Term
Notes remain available for issuance under the shelf registration statement.

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.  On November 30, 2000,  the Company's  rate agreement
with  the  NYPSC  expires.  Under  the  terms  of  the  agreement,  current  gas
distribution  rates will remain in effect for 2001 unless  either the Company or
the NYPSC  initiate a rate  proceeding.  The Company does not intend to initiate
such a proceeding and at this time the Company has no reason to believe that the
NYPSC will initiate a proceeding.  Therefore,  the Company  expects  current gas
distribution  rates to remain in effect through 2001.  (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
September 30, 2000, the Company has expended a total of $5.8 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



                                       13

<PAGE>



are:  general economic  trends;  available  sources and cost of gas; 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.


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  September
30, 2000.





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




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<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: November 14, 2000                         /s/ Anne C. Jordan
                                              ----------------------------------
                                                    Anne C. Jordan
                                              Vice President and Chief Financial
                                              Officer

Date: November 14, 2000                        /s/ Paul R. Nick
                                              ----------------------------------
                                                   Paul R. Nick
                                              Controller and Chief Accounting
                                              Officer





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