Exhibit 10.13

                              EMPLOYMENT AGREEMENT


            AGREEMENT,  made as of the 5th day of December, 1997 between KEYSPAN
ENERGY  DEVELOPMENT  CORPORATION  (the  "Company"),  a New York corporation with
offices at One MetroTech  Center,  Brooklyn New York 11201, and H. NEIL NICHOLS,
residing at 7 Blackwell Court, Unionville, Ontario L3R 0C2 (the "Executive").

            WHEREAS, the Company desires to employ the Executive as
its President, and

            WHEREAS, the Executive desires to accept such
employment,

            NOW, THEREFORE,  in consideration of the premises and for other good
and  valuable   consideration,   the  receipt  and   sufficiency   of  which  is
acknowledged, the parties agree as follows:

1.    Scope of Employment.

      (a) The Company  hereby  employs the Executive as its  President,  and the
Executive hereby accepts such employment by the Company subject to the terms and
conditions set forth herein.  In his capacity as President,  the Executive shall
have and may exercise all such  powers,  duties and  functions as are normal and
customary  to such  positions  and as may from time to time be  assigned  to the
Executive by the Board of  Directors  of the Company (the  "Board") and shall at
all times and in all respects  comply with the directions and regulations of the
Company and/or as established by the Board.

      (b) The Executive shall  faithfully serve the Company to the utmost of the
Executive's  abilities and shall use the Executive's best efforts to promote the
interests  thereof  and  shall  devote  all of the  Executive's  business  time,
attention,  skill and efforts exclusively to such duties,  except insofar as the
Executive has the prior written consent of the Board to do otherwise.



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      (c) The Executive shall comply with such directives,  policies and manuals
as the Company may issue from time to time to its officers and employees.

2.    Term of Employment.

      The Term of Employment  shall  commence on December 5th, 1997 and continue
through and  including  the  earlier of the  following  dates (the  "Termination
Date"):

               (i)  December 4, 2000 (the "Expiration Date");

               (ii) the date of the death of the Executive;

               (iii)the date of the termination of the Executive's employment by
                    the Company pursuant to Section 7 of this Agreement; or

               (iv) the date of the resignation of the Executive from employment
                    pursuant to Section 6 of this Agreement.


3.    Compensation.

      (a) In consideration of the services  rendered by the Executive during the
Term of  Employment  hereunder,  including,  but not limited  to,  service as an
officer or director of the Company or of any  subsidiary  or affiliate  thereof,
and in consideration of the Executive's  covenants regarding  non-competition in
Section 10 hereof,  the Company agrees to pay the Executive an annualized salary
of Two Hundred Twenty-five  Thousand dollars ($225,000),  less withholding taxes
and other amounts required by applicable laws (the "Base Salary"), to be paid in
monthly installments.

      (b) The  Executive  shall  be  eligible  to  participate  in an  incentive
compensation  plan  established  by  the  Company,  subject  to  the  terms  and
conditions  of the plan as they may be modified from time to time, to provide an
annual  incentive  compensation  award (with a target award equivalent to 35% of
Base Salary and a maximum award equivalent to 70% of Base Salary), as determined
by the Board upon its review of the Company's performance, progress and profits,
and the goals and  expectations  established  by the Board,  and the  individual
performance of the Executive.


      (c) The Executive  shall be eligible to  participate in The KeySpan Energy
Corporation  Long-Term  Performance  Incentive  Compensation  Plan (the "Plan"),
subject to the terms and  conditions of the Plan as it may be modified from time
to time. Pursuant to the Plan and such additional


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terms as may be set by the Board or a Committee of the Board under the Plan, the
Executive shall receive a grant of Twenty Thousand (20,000)  non-qualified stock
options,  to  become  vested  over  a  three-year  vesting  schedule,  and to be
exercisable  not later than the tenth (10th)  anniversary  date of the grant. In
accordance  with the Plan,  the option price for the stock  options  shall be at
least equal to One Hundred percent (100%) of the fair market value of a share on
the date the options are granted. Such grant shall be made at the meeting of the
Board of Directors of KeySpan Energy Corporation.

      (d) The Company shall pay to the Executive,  within thirty (30) days after
execution of this Agreement, the sum of One Hundred Thousand Dollars ($100,000),
less applicable  withholding  taxes,  for  transportation  and related  expenses
incurred or to be incurred by the  Executive in traveling  between his residence
and the Company's offices.

      (e) In the event the Executive is terminated for cause, or resigns for any
reason prior to the  termination of this  agreement,  he agrees to reimburse the
Company a pro rata  portion of the  $100,000  payment  indicated in Section 3(d)
hereof based upon length of employment to date of termination or resignation.

      (f) The Executive  shall be reimbursed  for reasonable  business  expenses
incurred  in  connection  with  the  performance  of his  duties  hereunder,  in
accordance with the Company's policies as they may be amended from time to time.

      (g) The Executive shall be subject to annual reviews for all components of
compensation.



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4.    Benefits.

      (a) The Executive  shall be eligible to  participate  in the group medical
and dental plans  established  and/or  offered by the Company for the benefit of
employees of the Company and their eligible dependents, subject to the terms and
conditions  of such  plans,  as they may be  modified  from  time to  time,  and
applicable laws and regulations.

      (b) The Executive  shall be eligible to  participate in The KeySpan Energy
Corporation  Employees' Savings Plan or in another defined  contribution (401(k)
retirement  plan  established  and  maintained by the Company for the benefit of
employees of the Company,  subject to the terms and  conditions of such plan, as
it may be amended from time to time, and applicable laws and regulations.

      (c) The Company  shall cover the  Executive at the  Company's  expense for
workers' compensation and statutory disability insurance.

      (d) The  Executive  shall  not be  eligible  to  participate  in any other
benefit  plans that may be  established  and/or  offered by the  Company for the
benefit  of its  employees  and their  eligible  dependents,  including  but not
limited to group life insurance, long-term disability and retirement plans.

      (e) Effective January 1, 1998, the Executive shall be eligible for 25 paid
vacation days per year upon the terms and  conditions of the Company's  policies
as they may be  amended  from  time to  time.  Unused  vacation  days may not be
carried over from year to year. Upon  termination of the Executive's  employment
for any reason,  the Executive shall be entitled to unused accrued  vacation pay
for that calendar year through the date of termination.


5. Termination by the Executive.

      The Executive may terminate employment at any time prior to the Expiration
Date  upon the  Executive's  giving  the  Company  notice of  termination  to be
effective in not less than 30 days.



6. Termination by the Company.

      (a) For Cause. The Executive's employment may be terminated by the Company
for cause at any time.  Actions or omissions by the Executive  which entitle the
Company to terminate  employment for cause shall include, but not be limited to,
(i) failure of the Executive in the judgment of


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the Company to perform  satisfactorily the Executive's  assigned duties; or (ii)
the  Executive's  arrest or indictment  for, or conviction of, a crime involving
moral  turpitude,  dishonesty,  theft,  a breach  of trust,  unethical  business
conduct  or  conduct  which,  in the  judgment  of the  Company  may  impair the
Company's reputation;  or (iii) failure of the Executive to devote substantially
all of his  time and  business  attention  exclusively  to the  business  of the
Company and his duties  hereunder  as required  by this  Agreement;  or (iv) the
inability of the Executive to perform the Executive's duties hereunder,  whether
by reason of injury or illness  (mental or physical) or otherwise,  for a period
in excess of ninety (90)  calendar  days;  or (v) any act of  dishonesty,  gross
negligence or other  serious  misconduct by the Executive in the judgment of the
Company;  or (vi)  violation  by the  Executive  of any other  material  term or
condition  of this  Agreement.  Upon  the  Company's  giving  notice  that it is
terminating  employment  for cause,  the  Termination  Date shall be the date on
which  such  notice is mailed or  hand-delivered  to the  Executive,  unless the
notice states otherwise,  and the Executive shall not be entitled to receive any
other  compensation  or  payments  hereunder  (except  as such  compensation  or
payments relate to the Executive's services prior to the Termination Date).

      (b) Other Than For Cause. The Executive's  employment may be terminated by
the  Company  at any time and for any or no  reason  upon the  Company's  giving
notice that it is terminating  employment  other than for cause.  In such event,
the Company may discharge the Executive immediately or as of such future date as
the Company may determine to be appropriate.




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7.    Severance Payment.

      (a) Upon the  termination  of the  Executive's  employment  other than for
cause as  described  in  Section  6(b)  hereof,  the  Company  shall  pay to the
Executive an amount  equal to twelve  months Base Salary if  termination  occurs
within first year of hire, nine months Base Salary if termination  occurs within
second year,  six months Base Salary if  termination  occurs  within three years
hereunder,  to be paid  monthly or in a lump sum as  determined  by the Company,
less such  withholding  and  deductions as may be required by law. The Executive
shall not be eligible for the  severance  payment  described in this Section for
termination of employment for any other reason.

      (b) As a  precondition  to receiving  the severance  payment  described in
Section 7(a) hereof,  the Executive agrees to execute and deliver to the Company
a general release,  in a form acceptable to the Company,  releasing the Company,
its parent,  subsidiary and affiliated companies and their officers,  directors,
employees  and agents from any and all causes of action that the  Executive  may
have arising out of the Executive's employment, this Agreement or anything else.
      (c) Notwithstanding  anything contained in this Section 7 to the contrary,
the Executive shall not be eligible for any severance  payment  hereunder if the
Company or any of its parent, subsidiary or affiliated companies shall offer the
Executive  comparable  employment  within thirty (30) days of termination of the
Executive's employment hereunder and the Executive accepts such offer.


8.    Ownership of Employee Developments.

      All copyrights,  patents,  trade secrets,  or other intellectual  property
rights associated with any ideas, concepts, techniques,  inventions,  processes,
or works of authorship that the Executive  develops or creates during the course
of  performing  work for the  Company or its  clients  (collectively,  the "Work
Product")  shall  belong  exclusively  to the Company  and shall,  to the extent
possible,  be  considered a work made by the  Executive for hire for the Company
within the meaning of Title 17 of the United States Code. To the extent the Work
Product  may not be  considered  work  made by the  Executive  for  hire for the
Company,  the Executive agrees to assign and automatically assign at the time of
creation of the Work Product,  without any requirement of further consideration,
any right, title, or interest the Executive may have in such Work Product.  Upon
request of the Company, the Executive shall take such further actions, including
execution and delivery of instruments  of  conveyance,  as may be appropriate to
give


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full and proper effect to such assignment.

9.    Confidentiality.

      (a) As a fiduciary of the Company,  the  Executive  agrees not to disclose
any  confidential  information  made available to or learned by the Executive in
the course of the performance of the Executive's  duties at the Company and with
respect to the business of the Company.

      For  the  purposes  of  this  Section,   the  term  "confidential"   means
information disclosed to the Executive or known, learned, created or observed by
the Executive as a consequence of, or through the Executive's  employment by the
Company  concerning the Company or any parent,  subsidiary or affiliated company
which is  presently  existing  or which may be formed  in the  future,  which is
confidential,  secret or otherwise  not  generally  known in the  industry,  and
pertains directly or indirectly to the business activities,  products, services,
customers  or  processes  of Company or any of its  subsidiaries  or  affiliated
companies,  including, but not limited to, information concerning mailing lists,
publicity,  data,  research,  copy,  other printed matter,  photographs,  films,
reproductions,  finances,  processes,  trade secrets,  business plans,  customer
lists and records,  potential customer lists, customer billing and other related
information.

      The Executive shall not take any original or copy of any document or other
papers, computer diskettes,  methods, procedures, etc., containing or disclosing
such confidential information or documents or summaries containing the substance
of any part  thereof.  Any  records  of  confidential  information  prepared  by
Executive  or which came into the  Executive's  possession  during the period of
employment  with the Company are and remain the property of the Company and upon
termination of Executive's employment, all such records and copies thereof shall
either be left with or returned to Company.

      (b) The Executive agrees that the  restrictions  contained in Section 9(a)
of this  Agreement are necessary  for the  protection of the Company  during and
following the Terms of Employment  hereunder,  and any breach thereof will cause
the  Company  damage for which  there are no  adequate  remedies  at law and the
Executive  consents to the issuance of an injunction in favor of the Company and
its successors and assigns enjoining the breach of the aforesaid restrictions by
any court of competent jurisdiction. The Executive agrees that the rights of the
Company to obtain an injunction granted by this paragraph of the Agreement shall
not be  considered  a waiver of the  rights of the  Company  to assert any other
remedies they may have at law or in equity.



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10.   Non-competition.

      (a) The Executive  acknowledges that, while serving Company, the Executive
will have  numerous,  extensive  and  controlling  contacts  with the  Company's
customers  and will  provide  unique and special  services to the  Company.  The
Company  and the  Executive  acknowledge  that  the  Executive  will be privy to
confidential  information  of  the  Company  and  its  parent,   subsidiary  and
affiliated  companies  and their  customers  and,  therefore,  if the  Executive
competes  with the Company,  the Company would suffer a  considerable  financial
loss in that  among  other  things it would lose the value of some or all of its
good will.

      In  consideration  of employment  with the Company under the terms of this
Agreement,  the Executive  agrees that during the Term of Employment and for one
(1) year thereafter,  neither the Executive nor any corporation,  partnership or
other entity controlled by, under common control with, or presently  controlling
the Executive  will (i) in the  northeast,  travel,  canvas or advertise for, or
otherwise assist, render services to, become employed by, be a consultant to, or
invest  in any  business  entity  or with any  individual  engage  in, or engage
directly  or  indirectly  in,  any  line or  lines  of  business  carried  on or
contemplated  which,  directly or indirectly,  is a competitor of the Company or
its parent,  subsidiary  and  affiliated  companies,  (ii)  solicit  business or
otherwise  deal  directly or  indirectly  with any customers or persons who were
employees of customers or vendors of the Company at any time,  (iii) directly or
indirectly  divert  or  attempt  to  divert  from  the  Company  or its  parent,
subsidiary and affiliated  companies,  any business in which it has been engaged
during the term of the Executive's  employment with the Company,  or in which it
might  reasonably  be expected to become  engaged,  (iv)  directly or indirectly
interfere or attempt to interfere  with the  relationships  between the Company,
its customers, employees of customers or vendors, and (v) directly or indirectly
interfere or attempt to interfere with the relationship of  employer-employee or
principal and agent of any person  bearing such  relationship  to the Company or
its parent,  subsidiary  and  affiliated  companies,  nor directly or indirectly
divert or attempt to divert any such person from employment or representation of
the  Company or its  parent,  subsidiary  and  affiliated  companies;  provided,
however,  that  the  Executive  shall  not be  prohibited  by the  terms of this
paragraph  from  investing  in and owning not more than one percent  (1%) of the
outstanding  shares of common stock of any corporation,  the shares of which are
publicly  traded  pursuant  to  the  Securities  Exchange  Act of  1934,  and/or
passively invest as a limited partner in any non-publicly traded security.

      (b)   The Executive agrees to promptly notify the


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Company if the Executive  receives any offer of employment  that involves or may
involve any activity  described in Section 10(a) hereof if the employment  might
commence  during or within one (1) year after the termination of the Executive's
employment with the Company. Such notice shall be in writing and shall contain a
complete  description  of the terms of the offer,  including  the  position  and
compensation  offered.  After the  Executive  has so notified the  Company,  the
Executive  agrees that the Company  may inform  such  potential  employer of the
existence of this  Agreement,  including the  provisions of this Section 10, and
once the  Executive  has  indicated  that he  intends to accept the offer if the
Company so permits, the Company shall have ten (10) days to elect:

          (i)  To  convince  the  Executive  to stay at the same or a  different
               salary, compensation, or terms; or

          (ii) To release the  Executive  from any of the  restrictions  in this
               Section 10, but only with  respect to the  particular  employment
               position offered to the Executive; or

          (iii)To insist  upon full  compliance  with the  restrictions  in this
               Section 10.


      (c) The Executive agrees that damages cannot compensate the Company in the
event of a breach or  violation of this  Section  and,  injunctive  relief being
essential for the protection of the Company and its  successors and assigns,  in
addition to other applicable remedies, Company may obtain such injunctive relief
in the event of any such breach or violation  and may assert any other  remedies
it may have at law or in equity.

      (d) The Executive has carefully read and considered the provisions of this
Section 10 and agrees  that the  restrictions  are fair and  reasonable  and are
reasonably  required for the  protection  of the  interests of the Company.  The
Executive understands that the restrictions  contained in this Section may limit
his  ability to engage in a  business  similar to the  Company's  business,  but
acknowledges  that he will  receive  sufficiently  high  remuneration  and other
benefits from the Company hereunder to justify such restrictions.

11.   Miscellaneous.

      (a)  Withholding  Taxes.  The Company  shall  withhold  from all  payments
hereunder  all  applicable  taxes which it is  required  to withhold  therefrom,
unless the Executive has  otherwise  paid such taxes or made other  arrangements
satisfactory to the Company.


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      (b)  Notices.  Any  notice  or other  communication  provided  for in this
Agreement  shall be in writing and  delivered by mail or by hand, in the case of
the  Company,  to  KeySpan  Energy  Development  Corp.,  One  MetroTech  Center,
Brooklyn,  New York 11201,  Attn:  W. P.  Parker,  Jr.;  and, in the case of the
Executive,  to the address as it appears in the first paragraph  hereof, or such
other address as the Executive may provide to the Company.



      (C) Waiver. This Agreement may not be modified,  altered or amended except
by a written  instrument signed by the parties.  Any waiver or any breach of any
provision  hereof,  or of any  right  or  power  by  any  party  on one or  more
occasions,  shall not be  construed as a waiver of, or a bar to, the exercise of
such  right or power on any  other  occasion  or as a waiver  of any  subsequent
breach.

      (d)  Severability.  The  unenforceability  or  invalidity of any provision
hereof  shall in no way  affect  the  enforceability  or  validity  of any other
provision.

      (e) Binding Effect; Successors.  This Agreement shall inure to the benefit
of and shall be binding upon the Company and its  successors and assigns and the
Executive and the Executive's heirs. The Executive may not assign,  transfer, or
otherwise  dispose of this Agreement,  or any of the parties' rights  hereunder,
without prior written consent of the Company, and any such attempted assignment,
transfer or other disposition without such consent shall be null and void.

      (f) Entire  Agreement.  This Agreement  constitutes  the entire  agreement
between the parties and supersedes any prior or contemporaneous  agreement among
the  parties  with  respect  to the  terms  and  conditions  of the  Executive's
employment.

      (g)  Controlling  Law. This Agreement  shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York applicable to
contracts  made  and to be  performed  therein,  without  giving  effect  to the
principles thereof relating to the conflict of laws. Any action in law or equity
arising out or relating to this  Agreement  shall be  commenced  in the New York
State court of appropriate jurisdiction located in Kings County, New York or the
U.S. District Court for the Eastern District of New York.



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            IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.


                              KEYSPAN ENERGY DEVELOPMENT CORP.



/s/ H. Neil Nichols           By:/s/ Robert B. Catell
-------------------              --------------------
H. NEIL NICHOLS                    Robert B. Catell