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                                                                     EXHIBIT 10.

                    TEXAS EASTERN PRODUCTS PIPELINE COMPANY
                   1997 EMPLOYEE INCENTIVE COMPENSATION PLAN





         Texas Eastern Products Pipeline Company ("TEPPCO") hereby establishes,
effective as of January 1, 1997, the Texas Eastern Products Pipeline Company
1997 Employee Incentive Compensation Plan providing as follows:

I.       PURPOSE

         The Plan is intended to provide a method whereby eligible employees of
TEPPCO may be motivated through personal financial gain linked to the
performance of TEPPCO Partners, L.P. (the "Partnership"), to strive to further
enhance the Partnership's financial performance.

II.      DEFINITIONS

         Unless the meaning is clearly different when used in context, these
terms shall have the meanings set forth below.  Wherever applicable, the
masculine pronoun as used herein shall be deemed to mean the feminine, the
feminine pronoun the masculine, the singular the plural and the plural the
singular.

         A.      "Attainable Earnings Level" shall mean the earnings level,
expressed in terms of net income, that the Committee determines, for purposes
of this Plan, that the Partnership might expect for its fiscal year coinciding
with a particular Plan Year, assuming current business activity, expected new
projects, and some growth or other improvement.

         B.      "Award Amount" shall have the meaning set forth in Article
V.B. of this Plan.

         C.      "Board" shall mean the Board of Directors of TEPPCO.

         D.      "Eligible Employee" shall mean a person who is a regular,
full-time employee of TEPPCO and performs services on a full-time
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basis for TEPPCO and/or the Partnership, but who is not eligible to participate
in the TEPPCO MICP and who is not a member of the Committee identified in
Article III.

         E.      "L.P. Unit" shall mean a single unit representing a limited
partnership interest in TEPPCO Partners, L.P.

         F.      "Incentive Unit" shall mean an award unit attributable to a
specified earnings level as set forth in Article V, but shall not represent or
be construed in any way as being a L.P. Unit.

         G.      "Net Income" shall mean the Partnership's year end net income
as set forth in the Partnership's publicly reported consolidated financial
statements for the Partnership's fiscal year, except, that the Committee, in
its sole discretion, may adjust net income to disregard any financial item that
it determines to be inappropriate for Plan purposes and may utilize such
adjusted net income as net income for all Plan purposes.

         H.      "PanEnergy" shall mean PanEnergy Corp. and its Subsidiaries.

         I.       "Plan" shall mean the Texas Eastern Products Pipeline Company
1997 Employee Incentive Compensation Plan.

         J.      "Plan Year" shall mean each 12-month period beginning on
January 1 and ending on December 31, with the initial Plan Year beginning
January 1, 1997.

         K.      "Stretch Earnings Level" shall mean the earnings level,
expressed in terms of net income, that the Committee determines, for purposes
of the Plan, that the Partnership might expect for its fiscal year coinciding
with a particular Plan year, assuming better than anticipated operating
conditions, growth or other earnings improvement.

         L.      "Subsidiary" shall mean any corporation in which





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PanEnergy directly or indirectly owns more than 50% of the issued and
outstanding voting stock.

         M.      "Sustainable Earnings Level" shall mean the earnings level,
expressed in terms of net income, that the Committee determines, for purposes
of this Plan, that the Partnership might expect for its fiscal year coinciding
with a particular Plan Year, assuming continuation of base business and normal
operating conditions.

         N.      "TEPPCO MICP" shall mean the Texas Eastern Products Pipeline
Company Management Incentive Compensation Plan.

III.     ADMINISTRATION AND INTERPRETATION

         A.      The Plan shall be administered by a committee of the Board
consisting of not less than three members appointed by the Board and serving at
the Board's pleasure (the "Committee").  Each member of the Committee shall be
a member of the Board and no Committee member shall be eligible to participate
in the Plan.  Any vacancy occurring in the membership of the Committee shall be
filled by appointment by the Board.

         B.      The Committee shall, in its discretion, have full authority to
administer and interpret the Plan and to make all determinations under the
Plan, and may prescribe, amend, and rescind rules and procedures and take such
other action as it deems necessary or advisable for the administration of the
Plan, except as otherwise expressly reserved to the Board in the Plan.  Any
interpretation, determination or other action made or taken by the Committee
shall be final, binding and conclusive upon all parties.

         C.      The Committee may authorize persons other than its members to
carry out its duties, including the authority to approve an individual's
becoming a Participant, subject to the limitations





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and guidelines set by the Committee.  Subject to the provisions of the Plan,
any person to whom such authority is delegated may continue to be a Participant
provided that any non-ministerial determination with respect to such person's
participation in the Plan shall be made directly by the Committee and
independent of such delegation.

IV.      ELIGIBLE EMPLOYEES

         A.      Each individual who is an Eligible Employee on January 1,
1997, shall become a Participant for the 1997 Plan Year.

         B.      An individual who is an Eligible Employee on the first day of
any subsequent Plan Year shall become a Participant for such Plan Year.

         C.      Except as otherwise provided in Section A above, in the case
of an individual who is an Eligible Employee during a Plan Year, but not on the
first day of such Plan year, the individual shall become a Participant for such
Plan Year only with the approval of the Committee or its authorized
representative.





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V.       AWARDS

         A.      During April of the 1997 Plan Year, and during January of each
subsequent Plan Year, the Committee shall determine the sustainable Earnings
Level, the Attainable Earnings Level and the Stretch Earnings Level, each with
a corresponding number of Incentive Units, that shall apply to each Participant
for such Plan Year, and shall cause such information to be communicated to such
Participants.  Following the end of a Plan Year and the public announcement of
the Partnership's net income for the Partnership's fiscal year coinciding with
the Plan Year, the Committee shall credit each Participant for the Plan Year
who is an Eligible Employee as of the last day of such Plan Year with the
appropriate number of Incentive Units, determined on the basis of which one, if
any, of the Sustainable, Attainable or Stretch Earnings Levels has been
achieved by such net income.  For purposes of the preceding sentence, a
Participant who ceases to be an Eligible Employee on account of death,
disability or retirement under a retirement plan in which TEPPCO participates,
nevertheless, shall be deemed to be an  Eligible Employee as of the last day of
such Plan Year.

         B.      The Committee shall credit each Participant for a Plan Year
with an Award Amount for the Plan Year equal to the dollar amount produced by
multiplying the total number of Incentive Units credited to such participant
for such Plan Year times the total quarterly cash distributions paid by the
Partnership on one (1) L.P. Unit with respect to the Partnership's fiscal
quarters covered by such Plan Year.  It is intended that the resulting monetary
amount will be substantially equivalent to the total distributions that would
have been paid by the Partnership to the Participant had the Participant been
the owner during the respective period of a





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number of L.P. Units equal to the number of Incentive Units credited to the
Participant for the Plan Year.  Notwithstanding the foregoing, in the case of a
Participant who is not an Eligible Employee for any portion of a Partnership
fiscal quarter covered by a Plan Year (other than on account of termination
after TEPPCO employment by reason of death, disability or retirement under a
retirement plan in which TEPPCO participates), such Participant shall not
receive credit for any distributions paid by the Partnership with respect to
such fiscal quarter.

VI.      PAYMENT OF AWARDED AMOUNT

         A.      A Participant's Award Amount for a Plan Year shall be paid in
a cash lump sum, subject to withholding for taxes and other lawful purposes, as
of February 15 following the close of the Plan Year (except that if February 15
is not a business day, the first succeeding business day).

         B.      If a Participant dies before payment of an unforfeited Award
Amount, such unpaid Award Amount shall be paid to the Participant's surviving
spouse, or if no surviving spouse exists, to the Participant's estate or legal
representative.

VII.     LIMITATIONS

         A.       No Participant or any other person shall have any interest in
TEPPCO, the Partnership, TE Products Pipeline Company, Limited Partnership, or
PanEnergy, any fund or in any specific asset or assets of TEPPCO, the
Partnership, TE Products Pipeline Company, Limited Partnership, or PanEnergy by
reason of participation in the Plan.  No Participant shall have the right to
assign, pledge or otherwise dispose of or otherwise encumber any Plan benefit,
nor shall such Participant's contingent interest in such benefit be subject to
garnishment, attachment, transfer by





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operation of law, or any legal process.

         B.      Participation in the Plan does not confer any right of
continued TEPPCO employment or any right to receive any payment under the Plan.

         C.      Any unpaid Award Amount credited to a Participant shall be
forfeited in the following circumstances (unless the Committee, in its sole
discretion, determines otherwise):

                 1.       The Participant engages in willful, deliberate or
                          gross misconduct during TEPPCO employment; or

                 2.       If the Participant engages in activities competitive
                          with, or activities otherwise to the detriment of,
                          TEPPCO, the Partnership or PanEnergy, following
                          termination of TEPPCO employment.

VIII.    NATURE OF PLAN

         The obligation to make cash payments under the Plan shall be a
general, unsecured obligation of TEPPCO payable solely from the general assets
of TEPPCO, and no Participant shall have any interest in any assets of TEPPCO
by virtue of this Plan.  Nothing in this Article VIII shall be construed to
prevent TEPPCO from implementing or setting aside funds in a grantor trust
subject to the claims of TEPPCO's creditors.  The establishment and operation
of the Plan or the setting aside of any funds shall not be deemed to create a
trust.  Legal and equitable title to any funds set aside for the purposes of
the Plan, other than any grantor trust subject to the claims of TEPPCO's
creditors, shall remain in TEPPCO and shall remain subject to the general
creditors of TEPPCO, present and future.

IX.      AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

         The Board may at any time amend, suspend or terminate the





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Plan, in whole or in part, except that no amendment, suspension or termination
shall reduce any Award Amount credited to a Participant prior to the date of
such amendment, suspension or termination.  The Texas Eastern Products Pipeline
Company 1995 Employee Incentive Compensation Plan shall terminate as of the
1997 Plan Year, except for any awards to be made thereunder.

X.       SUCCESSORS AND ASSIGNS

         The provisions of the Plan shall be binding upon TEPPCO and its
successors and assigns and upon the Participant, his or her surviving spouse,
estate (including heirs, legatees, executors and administrators) or other legal
representative.

XI.      GOVERNING LAW

         The Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of Texas applicable to transactions that
take place entirely within the State of Texas, and, where applicable, the laws
of the United States of America.



         IN WITNESS WHEREOF, the undersigned have executed this Plan this 29th
day of January, 1997.

                                  TEXAS EASTERN PRODUCTS PIPELINE COMPANY



ATTEST:



  John Merli                      By:   W. L. Thacker               
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