CONSENT, WAIVER AND AMENDING AGREEMENT



         THIS CONSENT, WAIVER AND AMENDING AGREEMENT, dated December 22, 2000,
by and among KEYSPAN ENERGY DEVELOPMENT CO. (the "Borrower"), BANK OF MONTREAL
as agent (the "Agent") for the lenders from time to time party to the Credit
Agreement described below, including Bank of Montreal (collectively, the
"Lenders").

                                    RECITALS
                                    --------

A.       The Borrower, the Lenders, and Agent are parties to a Credit Agreement
         dated as of October 13, 2000 (the "Credit Agreement") pursuant to which
         the Lenders have extended certain credit facilities to the Borrower.

B.       The Borrower has notified the Agent and the Lenders of the
         inter-corporate transactions described in Schedule "A" hereto (the
         "Transactions"). The Borrower has requested that, to the extent the
         Lenders' consent or waiver is required, the Lenders consent to the
         Transactions and waive any of the provisions (the "Restrictive
         Provisions") of the Credit Agreement that may limit, restrict or
         prohibit the Borrower from carrying out or participating in the
         Transactions.

C.       The  Lenders  have  agreed to  consent  to the  Transactions  and waive
         the Restrictive  Provisions,  and  have  further  agreed  to amend  the
         Credit Agreement as hereinafter set forth.

D.       Each of the Guaranteeing Subsidiaries has agreed to consent to the
         amendments, consents and waivers effected hereby by concurrently
         herewith executing and delivering confirmations of the Subsidiary
         Guarantees (collectively, the "Subsidiary Confirmations").

E.       To give effect to the Transactions,  the Loan Parties and Solex, or
         some of them, will enter into a Partnership Interest Purchase and Sale
         Agreement, a Partnership  Amending  Agreement and an Assumption
         Agreement (with KeySpan Luxembourg S.a.R.L.) (collectively, the
         "Transaction Documents").

         NOW, THEREFORE, for the sum of Ten ($10.00) Dollars and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties agree as follows:

1.      Defined Terms.
        -------------

         Unless otherwise defined herein, capitalized terms used herein shall
have the meanings, if any, assigned to them in the Credit Agreement.

2.      Consent and Waiver.
        ------------------

         To the extent required by the terms of any of the Loan Documents, the
Lenders and Agent hereby consent to the Transactions and waive any provisions of
any Loan Document that may limit, restrict or prohibit the Borrower or any
Guaranteeing Subsidiary from carrying out or participating in the Transactions,
including without limitation the Restrictive Provisions.

3.      Amendments to Credit Agreement.
        ------------------------------

         The Credit Agreement is amended as of the date first above written as
follows:

(a)  The  definition  of "Funded Debt" in Section 1.1 is amended by adding after
     the reference to "KS Subordination" the words "or the KLUX  Subordination",
     and  by  adding  at the  end of the  definition,  after  the  reference  to
     "Intercorporate Debt", the words "that is the subject of such subordination
     agreements".

(b)  The  definition of  "Guaranteeing  Subsidiary" in Section 1.1 is amended by
     adding after the reference to "GMSFL" the words "Solex Production Ltd.,".

(c)  The  definition  of  "Intercorporate  Debt" in  Section  1.1 is  amended by
     deleting the same and substituting the following:

         "Intercorporate Debt" means Indebtedness of the Borrower or any
         Guaranteeing Subsidiary to Nicodama Beheer V B.V. or KS Luxembourg
         S.A.R.L. which has been subordinated pursuant to the KS Subordination
         or the KLUX Subordination (i) in the case of the Borrower, to the
         Outstandings, and (ii) in the case of any such Guaranteeing Subsidiary,
         to all Indebtedness of it to the Agent or the Lenders pursuant to any
         Loan Document;

(d)  The following definition is added to Section 1.1:

         "KLUX Subordination" means the subordination agreement dated December
         22, 2000 entered into among the Agent (on behalf of the Lenders), the
         Borrower, Keyspan Luxembourg S.A.R.L. and the Guaranteeing Subsidiaries
         in relation, inter alia, to the subordination of Intercorporate Debt of
         any Loan Party to Keyspan Luxembourg S.A.R.L.;

(e)  The definition of  "Partnership"  in Section 1.1 is amended by adding after
     the reference to "Borrower" the words ", Solex Production Ltd.,".

(f)  The  definition of  "Subsidiary"  in Section 1.1 is amended by adding after
     the reference to "GMSL," the words ", Solex Production Ltd.,".

(g)  The  definition  of  "Subsidiary  Guarantee"  in Section  1.1 is amended by
     adding after the reference to "GMSL" the words ", Solex Production Ltd.".

(h)  Section  2.1(ad)  is amended  by  deleting  the  reference  to "GMFSC"  and
     replacing it with "GMSFL and GMSL",  and after the  reference to "Effective
     Date,"  adding the words "and the  Subsidiary  Guarantee  executed by Solex
     Production Ltd. as of December 22, 2000,".

4.      Representations and Warranties.
        ------------------------------

         The Borrower represents and warrants to the Agent and each of the
Lenders (all of which representations and warranties the Borrower hereby
acknowledges are being relied upon by the Lenders and the Agent in entering into
this Agreement) that:

(a)  the  execution,  delivery  and  performance  by  each  Loan  Party  of  the
     Transaction Documents,  this Agreement, the Security executed and delivered
     concurrently  herewith by Solex Production Ltd., the KLUX Subordination and
     the Subsidiary Confirmations (collectively,  the "Amending Documents") have
     been duly authorized by all necessary corporate action, and that the Credit
     Agreement,  as amended by this  Agreement,  and each of the other  Amending
     Documents constitutes the legal, valid and binding obligations of each Loan
     Party  party  thereto   enforceable  against  it  in  accordance  with  its
     respective  terms  except  as  enforceability  may be  limited  by  general
     principles   of  equity   and  by   bankruptcy,   insolvency,   moratorium,
     reorganization or similar laws affecting creditor rights' generally;

(b)  the execution,  delivery and  performance by each Loan Party of each of the
     Amending Agreements to which it is a party will not:

     (i)  violate  any  provision  of  Applicable   Law   (including   financial
          assistance  provisions),  its  articles  or by-laws,  the  Partnership
          Agreement or any resolutions passed by the directors,  shareholders or
          (in the case of the Partnership) partners of such Loan Party; or

     (ii) result in a breach of or  constitute  a default or require any consent
          under, or result in the creation of any Security  Interest (other than
          Permitted Encumbrances) upon any of its property or assets,

         and the execution, delivery and performance by each Loan Party of each
         of the Amending Documents to which it is a party and the validity and
         enforceability thereof does not require any Governmental Authorization
         (other than filings necessary to perfect the Security and such
         Governmental Authorizations which have been obtained) and does not and
         will not contravene any provision of any Governmental Authorization
         applicable to such Loan Party or any of its assets, properties or
         interests;

(c)  the  Transactions  will not result in any material adverse tax consequences
     to any of the Loan Parties and if, for any reason,  the  Transactions  were
     required  to  be  reversed  by  any  applicable  tax   authorities   having
     jurisdiction  and  authority  in  that  regard,  such  reversal  would  not
     reasonably  be expected to have any  adverse  tax  consequence  to any Loan
     Party;

(d)  as of the date hereof,  the  outstanding  Syndicated  Indebtedness  is Cdn.
     $198,022,000 and the outstanding  Indebtedness on account of Intercorporate
     Debt is Cdn. $208,968,000.

(e)  as of the date  hereof,  Schedule  "B"  hereto  accurately  sets  forth the
     corporate structure of the Borrower, its shareholders and its Subsidiaries;

(f)  The  Transactions  do not, when taken together with the Amending  Documents
     and the Transaction Documents:

     (i)  effect any material adverse change to any of the assets or liabilities
          of  any  Loan  Party  from  those  in  existence  prior  to any of the
          Transactions;

     (ii) effect any material change to the ability of any Transaction  Party to
          perform its obligations under the Loan Documents; or

     (iii) affect the legality, validity or enforceability of the Security,

and, save and except as amended hereby or as provided for above in this Section
4, the Borrower hereby repeats each of the representations and warranties set
forth in Section 2.1 of the Credit Agreement (and including Solex Production
Ltd. as a Guaranteeing Subsidiary) and confirms that the same are true and
correct as of the date hereof.

5.      Miscellaneous.
        -------------

(a)  Except as herein expressly amended, all terms,  covenants and provisions of
     the Credit  Agreement are and shall remain in full force and effect and all
     references  therein to such Credit  Agreement shall henceforth refer to the
     Credit Agreement as amended by this Agreement.

(b)  This  Agreement  shall be  binding  upon and  enure to the  benefit  of the
     parties hereto and their respective successors and assigns.

(c)  This  Agreement  shall be governed by and construed in accordance  with the
     laws of the Province of Alberta and of Canada applicable therein.

(d)  This Agreement may be executed in any number of counterparts, each of which
     shall be deemed  an  original,  but all such  counterparts  together  shall
     constitute but one and the same instrument. This Agreement may be delivered
     by any party  thereto  either  in the form of an  executed  original  or an
     executed original sent by facsimile transmission.



<PAGE>



(e)  For the purposes of the Credit Agreement, this agreement shall constitute a
     Loan Document.


                  IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.


                                          KEYSPAN ENERGY DEVELOPMENT CO.


                                            Per: /s/_________________________

                                            Per: /s/_________________________


                                          BANK OF MONTREAL, as Agent


                                            Per: /s/__________________________

                                            Per: /s/__________________________



                                          BANK OF MONTREAL, as Lender

                                            Per: /s/___________________________

                                            Per: /s/___________________________



<PAGE>



                                  Schedule "A"

                               TRANSACTION SUMMARY

--------------------------------------------------------------------------------
Transaction Steps


--------------------------------------------------------------------------------
1. Solex Production Ltd.  ("SPL") loans $9 mm to KeySpan Energy  Development Co.
("KEDC (NS)") in exchange for $9 mm KEDC (NS) note .

--------------------------------------------------------------------------------
2. KEDC (NS) pays interest of $9.1 mm to KeySpan Energy Development Corporation
("KEDC (US)") on $100 mm note owed to KEDC (US) by KEDC (NS) (the "KEDC Note"),
remitting 10 percent of payment to the Canada Customs and Revenue Agency
("CCRA").

--------------------------------------------------------------------------------
3. KEDC (NS) and KEDC (US) renegotiate to increase interest rate on KEDC Note to
8.5 percent.

--------------------------------------------------------------------------------
4. KEDC (US) contributes the issued and outstanding common shares of SPL ("SPL
Shares") having a fair market value $29,410,675 to KeySpan Energy CI Midstream
Ltd. ("KS Caymans") for shares of KS Caymans.

--------------------------------------------------------------------------------
5.  KEDC (US) contributes the KEDC Note to KS Caymans for shares of KS Caymans.

--------------------------------------------------------------------------------
6. KS Caymans transfers the SPL Shares to KeySpan Luxembourg S.A.R.L ("KS
Luxembourg") for equity PEC's of $29,410,675 having an interest rate of 8.5
percent.


--------------------------------------------------------------------------------
7. KS Caymans  transfers the KEDC Note to KS  Luxembourg  for equity PEC's at an
interest of 8.25%.


--------------------------------------------------------------------------------
8. KS Luxembourg  transfers the SPL Shares to KEDC (NS) for preferred  shares of
KEDC (NS).

--------------------------------------------------------------------------------
9. KS Luxembourg transfers the KEDC Note to SPL for a $100 mm note bearing
interest at rate of 8.375% (the "SPL Note").

--------------------------------------------------------------------------------
10. SPL acquires a 31.53% interest in KeySpan Energy Canada Partnership ("KECP")
from KEDC (NS) in exchange for cancellation of the KEDC Note, the $25 mm note
dated October 12, 2000 and the $9 mm note owed by KEDC (NS) to SPL.

--------------------------------------------------------------------------------
11. KEDC (NS) assumes liability for SPL Note in exchange for 1,000,000 SPL First
Preferred Shares having a fair market value equal to $100 mm.

--------------------------------------------------------------------------------
12. KEDC (NS) contributes the $91 mm loan previously made by KEDC (NS)to KECP as
capital contribution to KECP (to maintain percentage interest in KECP).

--------------------------------------------------------------------------------



<PAGE>


<TABLE>

                                  Schedule "B"
<CAPTION>
                             CORPORATE ORGANIZATION
                             ----------------------
<S>           <C>                                                                       <C>
                KeySpanLuxembourg S.a.R.L.
                --------------------------
                |                 |
                |                 |
588 Preferred   |                 |
Shares          |              Nicodama Beheer V.B.V.
                |                   (Netherlands)
                |                   -------------
                |                 |
                |                 | 77 Common Shares
                |                 |
             KeySpan Energy Development Co. (ULC-NS)---------------------------------------
             ---------------------------------------                                       |
                |               |       |       |                                          |
                |               |       |       | 100%                                     |
                |  100%         |       |       |                                          |
                |               |  100% |       KeySpan Energy Facilities Limited          |
                |               |       |       ---------------------------------          |
                |               |       |                                                  |     100%
        TNG Liquids Ltd.        |       |                                                  |
        ----------------        |       |                                                  |
                                |       |                                                  |
                                |       |                                                  |
                        68.46%  |       |                                                  |
                                |       |                                                  |
                                |       KeySpan Energy Canada                              |
                                |       ---------------------                              |
                                |               |                                          |
                                |               |                                    Solex Production Ltd
                                |               |                                    --------------------
                                |               | 0.01%                                    |
                                |               |                                    31.53%|
                             KeySpan Energy Canada Partnership-----------------------------
                             ---------------------------------


</TABLE>