Exhibit 10.11

                        Supplemental Retirement Agreement


     This Agreement (the "Supplemental  Retirement  Agreement") dated as of July
1, 2002 (the  "Effective  Date") between KeySpan  Corporation  ("KeySpan" or the
"Company") and Gerald Luterman,  65 Old Hill Road,  Westport,  Connecticut 06880
(the  "Executive")  sets forth the understanding and agreement of the parties as
to certain  additional terms on which the Executive  continues to be employed by
KeySpan.

     WHEREAS,  Executive  is an Executive  Vice  President  and Chief  Financial
Officer  of KeySpan  who became an  employee  of KeySpan on July 29,  1999,  and
became a participant  in the Employees  Retirement  Plan of KeySpan  Energy (the
"ERP") on November 1, 1999 and the KeySpan Executive  Supplemental  Pension Plan
("KESPP");

     WHEREAS,  Executive may have limited  pension  benefits due to shorter than
normal  service at  retirement  and the Company  desires to enhance  Executive's
pension; and

     WHEREAS, on June 26, 2002, KeySpan's  Compensation and Nominating Committee
recommended and on June 26, 2002 KeySpan's Board of Directors authorized through
a Resolution (the  "Resolution")  that the proper officers provide an individual
supplemental retirement agreement with Executive;

     NOW THEREFORE,  the Company and Executive agree that Executive will receive
an enhanced pension benefit through this Supplemental  Retirement  Agreement and
the parties agree as follows;

          1.   Upon  Executive's  election  to  retire  in  accordance  with the
               provisions  of the  ERP,  Executive's  pension  benefit  will  be
               increased  and  Executive  will be paid  other  retiree  benefits
               pursuant to this Agreement.

          2.   Executive's supplemental retirement benefit will be determined as
               follows:

                    a. If Executive retires on or after the third anniversary of
               the  adoption  of  the   Resolution,   when  Executive   retires,
               Executive's pension benefit pursuant to the ERP and KESPP will be
               calculated  by  multiplying  the  qualified  pension  benefit and
               benefit under KESPP by a percentage of 35% of the amount  accrued
               under the respective plans. If the Executive retires prior to the
               third anniversary,  vesting of this Supplemental  Benefit will be
               pro-rata (one-third) on each annual anniversary of the three year
               period.



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                    b.  An  amount  determined  at age  62  shall  be the  final
                    Supplemental Retirement amount to be provided for retirement
                    on or after February 1, 2006.

               The Supplemental  Benefit will be paid pursuant to the retirement
               plan annuity option  elected by the Executive  under the ERP. The
               Supplemental  Benefit  provided  under  this  agreement  will  be
               applicable to any survivor  option,  if any, is elected under the
               ERP.

          3.   In the event of the Executive's death in active service, then the
               Executive's Supplemental Benefit will be determined utilizing the
               Participant's  qualified  survivor benefit payable at the date of
               the  Participant's  death  multiplied  by a percentage  of 35%. A
               survivor pension benefit under this agreement will be provided to
               the Executive's spouse pursuant to the survivor provisions in the
               ERP

               In the event of the Executive's Disability as defined in the ERP,
               then the  Executive's  Supplemental  Benefit  will be  determined
               utilizing the Participant's disability retirement benefit payable
               at the date of the disability  determined in accordance  with the
               ERP, multiplied by a percentage of 35%. The Supplemental  Benefit
               will be paid  pursuant  to the  retirement  plan  annuity  option
               elected by the Executive under the ERP. The Supplemental  Benefit
               provided  under this agreement will be applicable to any survivor
               option, if any, is elected under the ERP.

          4.   In the event Executive's employment is terminated:

               (a) after a "Change  of  Control"  as such term is defined in the
               KeySpan Senior Executive Change of Control Plan,

               (b) by the Company for any reason other than for "Cause"; or

               (c) by the  Participant  after the  occurrence  of Good Reason as
               such term is  defined  below  and on or before 90 days  after the
               occurrence of Good Reason;

then the  Company  agrees  that the  Executive's  Supplemental  Benefit  will be
determined utilizing the Participant's qualified benefit and benefit under KESPP
payable at the date of termination multiplied by a percentage of 35%.

               Cause for termination ("Cause") shall mean Employee's:


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               (i) continued  material  failure or inability to achieve required
               performance   results,  or  to  perform  in  a  competent  manner
               following written notice and opportunity to improve  performance,
               (ii) conduct that  constitutes  dishonesty or knowing and willful
               breach of fiduciary  duty;  (iii)  insubordination  or refusal to
               perform  assigned  duties or comply with directions of the Board;
               (iv) conviction by a court of competent  jurisdiction or entry of
               a plea of no  contest  for a  crime  involving  any act of  moral
               turpitude or  unlawful,  dishonest,  or unethical  conduct that a
               reasonable  person would  consider  damaging to the reputation of
               the Company or improper and  unacceptable  conduct by an Employee
               thereof.

          Good Reason shall mean any of the following:

               (A) without Employee's  express written consent,  (i) any action,
               or  failure  to take  action,  by the  Company,  the Board or the
               shareholders  of the  Company by the  Company  that  results in a
               diminution in the Executive's position, authority, titles, duties
               or  responsibilities,  or (ii) if  Employee  is  notified  by the
               Executive's  immediate  supervisor  or the Chairman  and/or Chief
               Executive Officer that a recommendation will be made to the Board
               of Directors of the Company that  Executive's  employment will be
               terminated after a Change of Control.

               Any isolated,  insubstantial  and inadvertent  action that is not
               taken in bad faith and is remedied by the Company  promptly after
               receipt of notice  thereof from the Executive does not constitute
               "Good Reason";

               (B) a material breach by the Company of any material provision of
               this  Agreement  which,  if  capable of being  remedied,  remains
               unremedied  for more than 15 days after written notice thereof is
               given by Employee to the company;

               (C) without  Employee's  written  consent,  the relocation of the
               principal  executive offices of the Company to a location outside
               the greater New York area;

          For purposes of this agreement,  any good faith  determination of Good
          Reason made by the Employee shall be conclusive.

     5.   In addition,  Executive will be eligible to participate in the retiree
          medical and dental benefits  program  provided under the group retiree
          benefit plans.  At the time of Executive's  retirement,  the Executive


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          will be  required  to pay the  full  group  rate of this  coverage  to
          participate  in the plans.  The  Company  will pay to  Executive  upon
          completion of enrollment, a monthly supplemental amount grossed up for
          income taxes (less employee  contributions in effect at retirement) to
          pay for such group  retiree  benefits.  This monthly  amount will be a
          fixed amount determined at retirement based upon the then current cost
          of the retiree  medical and dental plans. If Executive is under age 65
          at  retirement,  the amount  will be adjusted at age 65 to reflect the
          cost of medical and dental coverage at age 65. Once the amount of this
          supplement at age 65 is determined, it will remain at this amount as a
          monthly lifetime supplemental payment to the Executive.

          Additionally,  if Executive  retires prior to the third anniversary of
          the adoption of the Resolution,  the monthly  supplemental amount will
          be pro-rated  based upon the three year vesting  provided  pursuant to
          paragraph 2a.

          If the Executive does not enroll in the group plans in accordance with
          this paragraph, no supplemental payment will be made to Executive.

     6.   Any payment due hereunder will be paid from general assets.

     7.   KeySpan  and  Executive  agree that should  such  additional  benefits
          earned or accrued  pursuant  to this  Agreement  be  determined  to be
          subject to Section 280G of the Internal  Revenue Code,  KeySpan agrees
          that such  additional  benefits  will be  eligible  for  "Gross Up" in
          accordance with the provisions of the KeySpan Senior  Executive Change
          of Control Plan.

     8.   Executive  agrees not to  disclose  the terms and  conditions  of this
          Supplemental Retirement Agreement or any confidential information made
          available to or learned by him in the course of the performance of his
          duties at KeySpan  and with  respect to the  business  of KeySpan  and
          described in KeySpan 's Statement on Ethical Business Conduct. Any and
          all  confidentiality  agreements and all other agreements  executed by
          Executive as an employee of KeySpan that  contained  provisions not to
          disclose  any  confidential  information  are  incorporated  into this
          Agreement.  The term  "confidential"  means  information  disclosed to
          Executive  or  known,  learned,  created  or  observed  by  him  as  a
          consequence  of, or  through  his  employment  by  KeySpan  concerning
          KeySpan or any  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  KeySpan  or any of its  subsidiaries  or
          affiliated  companies,  including,  but not  limited  to,  information
          concerning mailing lists, publicity, data, research, copyrights, 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.


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          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  record  of
          confidential  information prepared by Executive or which came into his
          possession during the period of employment with KeySpan are and remain
          the property of KeySpan and upon termination of Executive' employment,
          all such  records  and  copies  thereof  shall  either be left with or
          returned to KeySpan.

     9.   Executive  agrees that the  restrictions  contained  in Paragraph 8 of
          this  Agreement are  necessary  for the  protection of KeySpan and any
          breach  thereof  will  cause  KeySpan  damage  for  which  there is no
          adequate  remedy  at  law  and  he  consents  to  the  issuance  of an
          injunction  in  favor of  KeySpan  and its  subsidiaries,  affiliates,
          successors   and  assigns   enjoining  the  breach  of  the  aforesaid
          restrictions by any court of competent jurisdiction.  Executive agrees
          that the  rights of KeySpan  to obtain an  injunction  granted by this
          Paragraph  of the  Agreement  shall not be  considered a waiver of the
          rights of KeySpan to assert any other remedies they may have at law or
          in equity.

     10.  Executive  recognizes and acknowledges that while employed by KeySpan,
          he  had  access  to  certain  confidential  and  proprietary  business
          information  for KeySpan,  including,  but not limited to,  client and
          customer   information  and  customer  lists,  all  of  which  are  of
          substantial  value  to  KeySpan  in its  business.  Executive  further
          acknowledges  that  disclosure of this  information to a competitor of
          KeySpan may result in damage to KeySpan's  business and a loss of good
          will.

          In  consideration  thereof,  Executive  agrees  that from July 1, 2002
          through the second  anniversary of his retirement,  neither  Executive
          nor any corporation,  partnership or other entity controlled by, under
          common  control with, or presently  controlling  Executive will (a) in
          the New York City  metropolitan  area and in any area  outside the New
          York City Metropolitan area wherein KeySpan owns and operates lines of
          business including Texas; New Hampshire, New Jersey; Ohio Connecticut;
          Rhode  Island;  Massachusetts;  Canada;  Northern  Ireland and Mexico,
          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
          KeySpan,  its  subsidiaries,   affiliated  companies,   successors  or
          assigns,  (b) in the New York City Metropolitan  area, and in any area
          outside the New York City  Metropolitan  area wherein KeySpan owns and
          operates  lines  of  business  including  Texas;  New  Jersey;   Ohio,
          Connecticut; Rhode Island; Massachusetts; Canada; Northern Ireland and
          Mexico,  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 business  entity or with any individual  engaged


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<PAGE>


          in,  the same or  similar  business  as  KeySpan  , its  subsidiaries,
          affiliated  companies and assigns,  (c) solicit  business or otherwise
          deal  directly or  indirectly  with any  customers or persons who were
          employees  of  customers  or vendors  of  KeySpan,  its  subsidiaries,
          affiliated  companies  and  assigns,  at any  time,  (d)  directly  or
          indirectly  divert or attempt to divert from KeySpan , any business in
          which it has been  engaged  during the term of  Executive'  employment
          with  KeySpan,  or in which it might  reasonably be expected to become
          engaged,  (e) directly or indirectly interfere or attempt to interfere
          with the relationships  between KeySpan, its subsidiaries,  affiliated
          companies  and  assigns,  their  customers,  employees of customers or
          vendors,  (f)  directly  interfere  or attempt to  interfere  with the
          relationship of employer-employee or principal and agent of any person
          bearing such  relationship to KeySpan , its  subsidiaries,  affiliated
          companies  and assigns,  nor directly  divert or attempt to divert any
          such  person  from  employment  or  representation  of  KeySpan,   its
          subsidiaries,  affiliated  companies and assigns;  provided,  however,
          that 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.

          Damages  cannot  compensate  KeySpan  in  the  event  of a  breach  or
          violation of this Paragraph and, injunctive relief being essential for
          the protection of KeySpan and its successors and assigns,  in addition
          to other  applicable  remedies,  KeySpan  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.

          Notwithstanding  the above,  if  Executive's  employment is terminated
          pursuant to Section 4a., Section 4b., or Section 4c., then the Company
          agrees that such  provision is not  applicable  to  Executive  and all
          restrictions  pursuant to this provision will be waived by the Company
          with respect to Executive's subsequent employment.

     11.  Executive  understands neither this Supplemental  Retirement Agreement
          nor  participation  in the  ERP or  KESPP  constitute  a  contract  of
          employment,  nor does it impose on the  Executive or the Company,  any
          obligation  for the  Executive  to remain an  employee  or change  the
          status  of  the  Executive's  employment  or  the  Company's  policies
          regarding termination of employment.

     12.  This Agreement shall bind any successor of KeySpan,  its assets or its
          businesses   (whether  direct  or  indirect,   by  purchase,   merger,
          consolidation or otherwise), in the same manner and to the same extent
          that KeySpan would be obligated  under this Agreement if no succession
          had taken place.


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          In the case of any  transaction in which a successor  would not by the
          foregoing provision or by operation of law be bound by this Agreement,
          KeySpan shall require such successor  expressly and unconditionally to
          assume  and  agree  to  perform   KeySpan's   obligations  under  this
          Agreement,  in the same  manner and to the same  extent  that  KeySpan
          would be required to perform if no such succession had taken place.

     13.  In the event of any litigation or other proceeding arising out of this
          Agreement after a Change of Control attributable to the subject matter
          of this  Agreement or  enforcement  of rights  asserted in good faith,
          which is initiated by the  Executive,  the  successor to KeySpan shall
          reimburse the  Executive  for all costs and expenses  relating to such
          litigation or other proceeding,  including  reasonable  attorneys fees
          and expenses,  promptly upon receipt of a written demand therefore and
          regardless  of whether such  litigation  results in any  settlement or
          judgment or order in favor of any party.

     14.  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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     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



                                           By:  /s/
                                                --------------------------------




                                           By:  /s/
                                                --------------------------------
                                                    Gerald Luterman













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