EMPLOYMENT AGREEMENT


           This  Agreement (the  "Agreement")  dated as of November 8, 2000 (the
"Effective Date") between KeySpan Corporation  ("KeySpan") and Chester R. Messer
II (the  "Executive")  sets forth the understanding and agreement of the parties
as to the terms on which the  Executive  is to be  employed  by KeySpan  and its
subsidiaries from and after the Effective Date.

           1. Certain  Recitals.  Prior to the Effective Date, the Executive was
an executive  employee of Eastern  Enterprises  ("Eastern").  Upon the Effective
Date,  Eastern  was  acquired  and merged with and into a merger  subsidiary  of
KeySpan, KeySpan Energy Delivery New England ("KeySpan N.E."). The Executive and
KeySpan as  successor  by merger are parties to an  employment  agreement  dated
September  22, 1999 (the "1999  Agreement"),  pursuant to which the Executive is
entitled to certain  compensation and benefits during  employment and in certain
cases thereafter as set forth in Appendix 1.

           2. Terms of Employment;  In General. The Executive  acknowledges that
subject  to  Section  2(b) he has  agreed  to serve  KeySpan  from and after the
Effective Date at an annual rate of base salary,  determined by KeySpan, that is
not less than $366,100  base salary with an annual  target  incentive of 50% and
long-term  incentive  opportunity  of 100% of base  pay in 2001 and for the year
2000, target annual and long-term incentive opportunities no less than the level
of award  opportunity  currently  provided by Eastern by taking on the following
responsibilities:  President,  KeySpan  N.E.  for a period of two years from the
Effective  Date.  The  Executive  agrees  that  the  terms  of  the  Executive's
employment  hereunder  shall be governed by the 1999  Agreement,  subject to the
following modifications:

                     (a)  References  in the 1999  Agreement  to  employment  by
           Eastern  Enterprises  shall be  deemed  modified  as  appropriate  to
           reflect the fact that the Executive is employed  hereunder by KeySpan
           N.E.

                     (b) The parties  acknowledge  that a "change in control" of
           Eastern has occurred. If the Executive terminates his employment with
           KeySpan,  for "Good  Reason" or is  terminated  by  KeySpan  "without
           cause" (as those  terms are defined in the 1999  Agreement)  from the
           Effective  Date  and  during  the  term of this  Agreement  or if the
           Executive  terminates  his  employment  with  KeySpan  for any reason
           during the period  between the start of the 20th month and the end of
           the 24th month of this  Agreement  with written notice to the KeySpan
           Board of  Directors,  he will be entitled to certain  benefits as set
           forth  in  Section  9 and  Section  10 of the 1999  Agreement,  which
           benefits  in the  aggregate  will be no less than those  benefits  to
           which Executive was entitled pursuant to the 1999 Agreement in effect
           on the Effective Date.  Notwithstanding the foregoing,  the Executive
           agrees that his employment by KeySpan in accordance with the terms of
           this Agreement  (including,  without limitation,  the Executive's job
           responsibilities, compensation, benefits and perquisites as described
           herein) shall not  constitute  "Good Reason" for purposes of the 1999
           Agreement.


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<PAGE>



                    (i)  If the  KeySpan  Board  determines  that  Executive  is
               permanently and totally disabled after the expiration of a 90 day
               period,  KeySpan  will pay  Executive  benefits  provided  for in
               accordance  with section 9 and section 10 of the  Agreement  upon
               the  termination  of  Executive's  employment.  The Company  will
               maintain long-term  disability  coverage at a benefit level equal
               to  70% of  base  pay,  such  benefits  will  commence  upon  the
               expiration  of a  180-day  disability  period.  As  part  of such
               disability  benefit,  Executive  agrees to enroll in the  KeySpan
               contributory  plan, which provides a benefit level of 60% of base
               pay to a  maximum  of  $200,000.  This  insured  benefit  will be
               supplemented  by KeySpan to provide  you the total 70%  described
               above.

                    (ii) If Executive  should die before the  expiration of this
               Agreement,  his spouse or designated  beneficiary pursuant to the
               Agreement will receive  change of control  payments in the amount
               of three times his base pay and target bonus  ("Change of Control
               Benefits") in addition to the life  insurance  benefits set forth
               in Appendix I.

                         (a) The Change of Control Benefits set forth above will
                    be  paid  directly  to  his  designated   beneficiary   from
                    corporate assets. The Executive acknowledges and agrees that
                    KeySpan may fund these  Change of Control  Benefits  through
                    the purchase of life  insurance.  Executive  understands and
                    agrees  that  KeySpan  is the owner and  beneficiary  of the
                    insurance  contract  and KeySpan  has all rights,  title and
                    interest therein and thereto. Executive will cooperate fully
                    with KeySpan and the  insurance  company in the  application
                    and the purchase of such life insurance policy.

                    (iii)  Additionally,  if  Executive  should  die  before the
               expiration of this  Agreement,  KeySpan will provide  medical and
               dental  benefits to Executive's  spouse for the maximum period of
               three  years  from the  Effective  Date  together  with  whatever
               benefits are  otherwise  available  under  applicable  retirement
               plans.  KeySpan  agrees that  Executive's  spouse,  or his estate
               shall receive the right to purchase his auto in  accordance  with
               the terms of the 1999 Agreement.

                         (c) Executive  acknowledges  that he has an outstanding
                    loan  pursuant to the Eastern  Officer Loan  Program,  which
                    will be paid to  KeySpan  within  210 days of the  Effective
                    Date.

                         (d) Section 12 and Section 24 of the 1999 Agreement are
                    amended   and   restated   to  delete  all   references   to
                    Massachusetts  and  insert  New  York in  their  place.  The
                    Company  agrees  to  reimburse   Executive's   attorney  for
                    reasonable  fees  incurred for the sole purpose of reviewing
                    the application of New York law to this  Agreement.  KeySpan
                    will pay such  attorney  directly  within  thirty days after
                    receipt of this bill.


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           3. Conversion to KeySpan Agreement.  Upon or at any time prior to the
second anniversary of the Effective Date (the "Expiration Date"), the Executive,
if at the time he is still  employed by KeySpan N.E.,  may be permitted to enter
into a change of control  agreement  with KeySpan in the form then  generally in
effect  between the  Company and  similarly  situated  officers (a  "Replacement
Agreement") in lieu of the 1999 Agreement.

           4.  Termination of Agreement and 1999  Agreement.  This Agreement and
the 1999 Agreement,  notwithstanding  any provision in the 1999 Agreement to the
contrary, shall terminate and be of no further force and effect upon the earlier
to occur of the Expiration Date or the execution by the Executive and KeySpan of
a Replacement Agreement.

           Notwithstanding the above, if the Executive terminates his employment
with KeySpan,  for "Good Reason" or is terminated by KeySpan "without cause" (as
those  terms are  defined in the 1999  Agreement)  from the  Effective  Date and
during the term of this Agreement or if the Executive  terminates his employment
with  KeySpan  for any reason  during the period  between  the start of the 20th
month and the end of the 24th month of this Agreement with written notice to the
KeySpan Board of Directors,  the obligations of KeySpan under section 9, section
10 and section 12 of the 1999 Agreement and Section 2b. of this Agreement.  will
survive the expiration or termination of this Agreement.

           5. Duty to Mitigate  and Right of Offset.  KeySpan and the  Executive
hereby  stipulate that all payments and benefits  contemplated by this Agreement
and the 1999 Agreement shall be payable without any duty on the Executive's part
to mitigate  damages and without  offset by any earnings which the Executive may
receive from other  employment  subsequent to the termination of his employment.
Nothing in this  Agreement  will prevent  KeySpan from having a right of offset,
counterclaim, self-help or other like remedies on KeySpan's part with respect to
payment owed by Executive in connection with his employment by KeySpan,  Eastern
and with  respect to any other  employment  based claims  involving  payment and
benefits not contemplated by this Agreement.

           6.  Miscellaneous.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York and may be modified only by
a written instrument executed by the parties.  This Agreement may be executed in
one or more  counterparts,  all of which  shall be  considered  one and the same
agreement and each of which shall be deemed an original.




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<PAGE>


           IN WITNESS WHEREOF,  KeySpan has caused this Agreement to be executed
by a duly authorized officer and the Executive has executed this Agreement,  all
as of the Effective Date.


                                                 KEYSPAN CORPORATION


                                                 -------------------
                                                 Robert B. Catell




                                                 --------------------
                                                 Chester R. Messer II