Exhibit 10.18

                       OFFICERS' DEFERRED STOCK UNIT PLAN
                                       OF
                             KEYSPAN SERVICES, INC.



     The Board of Directors of KeySpan Services,  Inc. and Board of Directors of
KeySpan  Corporation (the  "Corporation")  adopted this Officers  Deferred Stock
Unit Plan (the  "Plan")  effective  July 1, 2002.  The terms of the Plan are set
forth below.

1.         Purpose of the Plan

     The purpose of the Plan is to provide a method for certain Officers who are
employees of KeySpan  Services Inc. and its  subsidiaries  ("KSI") to acquire an
additional  proprietary  interest in the  Corporation  and to further  align the
interests of the Officers with the  Corporation's  shareholders.  It is intended
that the Plan will meet the requirements of Rule (b-3) promulgated under Section
16(b) of the Securities Exchange Act of 1934, as amended,  and the Plan shall be
interpreted accordingly.

2.         Definitions

          (i)  "Annual  Stock  Unit"  shall  mean the  number of stock  units of
     KeySpan Common Stock on an annual basis and deferred under this Plan.

          (ii) "Beneficiary"  shall mean a person or entity determined to be the
     Participant's Beneficiary pursuant to Section 9 hereof.

          (iii)  "Board  of  Directors"  or  "Board"  shall  mean  the  Board of
     Directors of KeySpan Corporation.

          (iv)  "Change  of  Control"  shall mean the  occurrence  of any of the
     following events following the Effective Date:

          a.   The  acquisition by any  individual,  entity or group (within the
               meaning  of  Section  13(d)(3)  or  14(d)(2)  of  the  Securities
               Exchange  Act of  1934,  as  amended  (the  "Exchange  Act"))  (a
               "Person")  of  beneficial  ownership  (within the meaning of Rule
               13d-3  promulgated  under  the  Exchange  Act)  of 20% or more of
               either  (x) the then  outstanding  shares of common  stock of the
               Parent  (the  "Outstanding  Common  Stock")  or (y) the  combined
               voting power of the then  outstanding  voting  securities  of the
               Parent  entitled to vote  generally  in the election of directors
               (the "Outstanding Voting Securities");  provided,  however,  that
               for purposes of this subsection  (i), the following  acquisitions
               shall not  constitute  a Change of Control:  (A) any  acquisition
               directly from the Parent,  (B) any acquisition by the Parent, (C)


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               any  acquisition by any employee  benefit plan (or related trust)
               sponsored  or  maintained  by  the  Parent  or  any   corporation
               controlled  by  the  Parent  or  (D)  any   acquisition   by  any
               corporation pursuant to a transaction which complies with clauses
               (A) , (B) and (C) of paragraph (iii) below; or

          b.   Individuals  who, as of the Effective Date,  constitute the Board
               (the  "Incumbent  Board")  cease for any reason to  constitute at
               least a  majority  of the  Board;  provided,  however,  that  any
               individual  becoming a director  subsequent to the Effective Date
               whose  election,  or  nomination  for  election  by the  Parent's
               shareholders,  was  approved  by a vote of at least a majority of
               the  directors  then  comprising  the  Incumbent  Board  shall be
               considered  as  though  such  individual  were  a  member  of the
               Incumbent  Board,  but  excluding,  for  this  purpose,  any such
               individual whose initial  assumption of office occurs as a result
               of an actual or threatened  election  contest with respect to the
               election or removal of directors  or other  actual or  threatened
               solicitation  of proxies or  consents by or on behalf of a Person
               other than the Board; or

          c.   Consummation of a reorganization, merger or consolidation or sale
               or other disposition of all or substantially all of the assets of
               the Parent or the acquisition of assets of another corporation (a
               "Business  Combination"),  in each case,  unless,  following such
               Business  Combination,  (A)  all  or  substantially  all  of  the
               individuals   and  entities  who  were  the  beneficial   owners,
               respectively,  of the  Outstanding  Common Stock and  Outstanding
               Voting Securities  immediately prior to such Business Combination
               beneficially  own,  directly  or  indirectly,  more  than 60% of,
               respectively, the then outstanding shares of common stock and the
               combined voting power of the then outstanding  voting  securities
               entitled to vote  generally in the election of directors,  as the
               case may be, of the  corporation  resulting  from  such  Business
               Combination  in  substantially  the  same  proportions  as  their
               ownership,  immediately prior to such Business Combination of the
               Outstanding Common Stock and Outstanding  Voting  Securities,  as
               the  case  may be,  (B) no  Person  (excluding  the  Parent,  any
               employee  benefit  plan (or related  trust) of the Parent or such
               corporation    resulting   from   such   Business    Combination)
               beneficially  owns,  directly  or  indirectly,  20% or  more  of,
               respectively,  the then outstanding shares of common stock of the
               corporation  resulting  from  such  Business  Combination  or the
               combined voting power of the then outstanding  voting  securities
               of such corporation entitled to vote generally in the election of
               directors except to the extent that such ownership  existed prior
               to the  Business  Combination  and (C) at least a majority of the
               members of the board of  directors of the  corporation  resulting
               from such  Business  Combination  were  members of the  Incumbent
               Board at the time of the execution of the initial  agreement,  or
               of  the  action  of  the  Board,   providing  for  such  Business
               Combination; or

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          d.   Approval  by  the  shareholders  of  the  Parent  of  a  complete
               liquidation or dissolution of the Parent.

     (e) "Code" shall mean the Internal Revenue Code of 1986 as amended.

     (f)  "Compensation"  shall mean the annual cash award as  determined by the
KSI  Board to be paid to a  Participant  pursuant  to the KSI  Officer's  Annual
Incentive Compensation Program.

     (g)  "Corporation"  or  "KeySpan " shall  mean  KeySpan  Corporation  , the
sponsor of this Plan or its successors or assigns.

     (h) "Effective Date" shall mean July 1, 2002.

     (i)  "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

     (j) "Parent shall mean KeySpan Corporation d/b/a KeySpan Energy.

     (k)  "Participant"  shall  mean  an  Officer  who  participates  in the KSI
Officer's Annual Incentive  Compensation  Program and who has been designated to
be a  Participant  by the  Board  or by the  KeySpan  Officer(s)  who  has  been
delegated such authority by the Board, as indicated on Appendix I hereto.

     (l) "Plan" shall mean this KeySpan  Service Inc.  Officers'  Deferred Stock
Unit Plan

     (m)  "Retirement"  shall  mean  retirement   pursuant  to  a  Participant's
qualified  pension plan or termination by a Participant  after attainment of the
age of 55.

     (n) "Stock Unit  Account"  shall mean a book account  maintained by KeySpan
reflecting the stock units of KeySpan Common Stock ("Common  Stock") credited to
the  Participant  as a  result  of the  deferral  of  Compensation  and any such
additional  stock units of KeySpan Common Stock as shall be credited  thereto in
respect of dividends paid on KeySpan common stock pursuant to Section 5(d).

3.         Participation

     Officers  of KSI who  participate  in the KSI  Officer's  Annual  Incentive
Compensation  Program and designated by the Board shall  participate in the Plan
as of the Effective Date. All future Officers of the Corporation  shall commence
participation  in the Plan  immediately  upon  becoming a KSI  Officer and being
designated by the Board as a Participant in the Plan.  Designated  Officers must
file an election in accordance with the requirements of Section 4 within 30 days
of such designation.

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4.         Form of Elections

     Each Participant  shall execute annually an election form for each calendar
year in  which  the  Plan is in  force.  Each  election  form  shall  state  the
percentage by which the  Participant's  Compensation  shall be reduced and shall
state whether  Participant  elects to receive cash compensation or defer between
10% and 50% of the annual  Award to purchase  stock units.  Elections  above 10%
must be made in 5% increments.

               (i) The deferral  election  shall be in the form  required by the
          Corporation  and shall be delivered to the  Corporation  no later than
          December 31 of the calendar  year  immediately  preceding the calendar
          year for which the deferral election is made.

5.          Stock Unit Account, and Maintenance of Stock Unit Accounts

     (a)  Participant  deferred  stock units shall be credited to the Stock Unit
Account in the name of such Participant on the first business day of the quarter
following  the  quarter in which such  deferral  has been made.  Each stock unit
shall be in the form of an unfunded  bookkeeping  entry and shall  represent one
full or  fractional  share of the  Common  Stock of the  Corporation.  No actual
shares of common stock or certificates  thereof shall be purchased or held under
the Plan until distribution is required in accordance with paragraph 6 hereof.

     (b) The number of stock units  credited  pursuant to this Section  shall be
determined  by utilizing the lower of either (i) the average of the high and low
price per share of KeySpan Common Stock on the first trading day of the calendar
quarter  or (ii) the  average  of the high and low price  per  share of  KeySpan
Common  Stock on the last  trading  day of the  calendar  quarter,  in which the
contributions  are received.  Such stock equivalents are to be computed to three
decimal  places  and  credited  as of the  first  business  day  of the  quarter
following the quarter in which credits shall have occurred.

     (c) Each Participant  Award at the time of a deferral will be credited with
a 20% match deferral. Such match will be made with additional stock units in the
manner determined in (b) above and will be deposited in the Stock Unit Account.

     (d) Each Participant  account will be credited as of the dividend date with
an amount equivalent to the amount of any dividend payable on KeySpan shares for
each stock unit or fraction of an unit in the  Participant's  Stock Unit Account
as of such  date  ("Dividend  Equivalent").  Such  Dividend  equivalent  will be
determined  by the actual  dividend paid from time to time in respect of KeySpan
issued and outstanding common stock.


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     (e) Dividend  Equivalents  as  described  in  paragraph  (d) above shall be
credited to the Participant's Stock Unit Account as of the dividend payment date
in the form of as many  additional  stock  units  (and any  fractions  of a unit
computed  to three  decimal  points) as could be  purchased  with such  Dividend
Equivalents  based on the average of the high and low price per share of KeySpan
common  stock on such  dividend  payment  date or, if no trading  occurs on such
stock on the dividend  payment date, on the trading day  immediately  succeeding
such date.

     (f) In the event that the number of  outstanding  shares of KeySpan  common
stock   shall  be   changed   by  reason  of  stock   split-ups,   combinations,
recapitalization,  mergers,  consolidations,  spin-offs  or the like,  the Board
shall  make such  adjustments  as it deems  appropriate  in the  number of units
credited to the Stock Unit Accounts hereunder.

     (g) At the time of distribution,  all stock units will be converted, issued
and  distributed  to  Participants  as  KeySpan  Common  Stock  certificates  in
accordance with the final election set forth in Paragraph 6 below.

6.         Form and Timing of Distribution

     (a) No  distribution  shall  be made to a  Participant  hereunder  prior to
retirement, death, termination of service or Change of Control.

     (b) Upon  Retirement,  all  stock  units in the  Participant's  Stock  Unit
Account  will be  distributed  in  accordance  with  the  Participant's  form of
election.  A Participant may request a distribution of the Stock Unit Account by
electing either of the following distribution options (i), (ii) or (iii) below:

               (i)  a lump  sum  distribution  of  KeySpan  Common  Stock to the
                    Participant  on January 31st of the year  following the date
                    of Participant's Retirement

               (ii) deferral of the  distribution  of the Stock Unit Account for
                    up  to 5  years  after  Retirement.  During  the  additional
                    deferral period,  Dividend  Equivalents shall be credited to
                    the  Stock  Unit  Account.  At the  end  of  the  additional
                    deferral period,  the Stock Unit Account will be distributed
                    in  KeySpan  Common  Stock  on  January  31st  of  the  year
                    following the end of the additional deferral period.

               (iii)the  Participant  may elect to receive  distribution  of the
                    Stock Unit Account in equal annual  installments  payable on
                    January 31st of the year  following  Retirement,  commencing
                    either  immediately or up to 5 years after  Retirement,  the
                    number of which shall be specified in writing in  accordance
                    with the Participant's  election, but in no event shall such
                    number exceed 5. Dividend  Equivalents  shall be credited on
                    the unpaid  Stock Unit  Account in  accordance  with Section
                    5(d).

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<PAGE>


                    (a)  If the Participant dies after  distributions  hereunder
                         have  commenced,  the remaining Stock Unit Account will
                         be converted to KeySpan Common Stock and distributed to
                         the Participant's Beneficiary or estate on January 31st
                         of the year following the Participant's Death.


     The election of the distribution  form must be delivered to the Corporation
no later than December 31st of the year prior to  Participant's  Retirement  and
the final election form is irrevocable.



     (c) Upon  Participant's  Death before  commencement of benefits,  all stock
units in the  Participant's  Stock Unit  Account  will be  converted  to KeySpan
Common  Stock and  distributed  to the  Participant's  Beneficiary  or estate on
January 31st of the year following the Participant's Death.

     (d) Upon  Change of  Control,  all stock  units  and  Dividend  Equivalents
thereon in the  Participant's  Stock Unit Account  will be  converted  into cash
utilizing  the stock price on the last  trading day before the Change of Control
and such  cash  balance  must be  distributed  immediately  upon the  Change  of
Control.

     (e) Upon  termination of employment due to a Participant's  Disability,  as
defined in the KeySpan  Management  Long Term  Disability  Plan,  the Stock Unit
Account  will be  converted  to  KeySpan  Common  Stock and  distributed  to the
Participant on January 31st of the year following the Participant's  termination
due to such Disability.

     (f) For all other terminations,  including for Cause, or resignations,  all
stock units,  excluding the aggregate  Corporation match and dividend equivalent
thereon,  in the  Participant's  Stock Unit Account will be converted to KeySpan
Common Stock on the date of such  termination or resignation  and distributed on
January  31st  of  the  year  following  such  resignation  or  termination.  No
Corporation match nor Dividend  Equivalent thereon will be credited or converted
to KeySpan Common Stock if a Participant  terminates employment pursuant to this
paragraph.

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

          (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.

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<PAGE>


7.         Forfeitures

     Each   Participant's   deferrals   hereunder   shall  be   non-forfeitable.
Corporation  matches pursuant to paragraph 5c will be forfeited if a Participant
terminates for reasons described in paragraph 6f.

8.         Other Benefit Plans

     Deferrals  made to the  Plan by the  Participant  will be  included  in the
definition  of  "Compensation"  utilized in the KeySpan  Executive  Supplemental
Pension  Plan,  if  participating  in  a  KeySpan  qualified  pension  plan  for
calculation of the benefits due under that Plan.  Corporation match and Dividend
Equivalents  are not included in such  definition  for  calculation  of benefits
under that Plan.


9.         Beneficiary

     Each Participant  shall have the right to designate in writing from time to
time a  Beneficiary  or  Beneficiaries  by  filing  a  written  notice  of  such
designation with the Corporation.  In the event a Beneficiary  designated by the
Participant  does not survive the  Participant  and no successor  Beneficiary is
selected, or in the event no valid designation has been made, such Participant's
Beneficiary shall be such  Participant's  estate. In the event the Participant's
Beneficiary is the Participant's  estate,  no distribution  shall be made unless
the Corporation  shall have been furnished with such evidence as the Corporation
may deem  necessary  to  establish  the  validity  of the  distribution  and the
Corporation  may distribute the Stock Unit Account to the  Participant's  estate
without liability for any tax or other  consequences  which might result or, may
take such other action as the Corporation deems to be appropriate.

10.        Counterparts

     Any direction to defer amounts associated with this Plan may be executed in
two or more  counterparts,  any one of which shall be deemed an original without
reference to the others.

11.        Termination or Amendment

     The Plan may be terminated at any time by the Board of Directors.  The Plan
may be  amended  by the Board of  Directors  from  time to time in any  respect;
provided,  however,  except to the extent any  amendment  is necessary to assure
continued  exemption  under  Rule  16b-3  promulgated  under  Section  16 of the
Exchange  Act,  no  such  amendment  may  reduce  the  amounts  accrued  to  any
Participant's  Stock Unit  Account  without  the  affected  Participant's  prior
written consent.

     Subject  to the  preceding  paragraph,  the Board may  delegate  to certain
officers of KeySpan,  the right to amend the Plan for the purposes of clarifying
or finalizing the Plan and such  amendments  shall be effective  without further
action of the Board.


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<PAGE>



12.        Claims

     For  purposes  of  handling  claims  with  respect to this  Plan,  the Vice
President of  Compensation  and Benefits is the Plan  Administrator.  An initial
claim for benefits under the Plan must be made by the  Participant or his or her
Beneficiary in accordance  with the terms of the Plan through which the benefits
are provided. Not later than 90 days after receipt of such a claim, the Board or
its designee will render a written  decision on the claim to the  Participant of
Beneficiary,  unless special  circumstances require the extension of such 90-day
period. If such extension is necessary,  the Board or its designee shall provide
the Participant or the  Participant's  Beneficiary with written  notification of
such extension  before the expiration of the initial 90-day period.  Such notice
shall  specify the reason or reasons for such  extension and the date by which a
final decision can be expected. In no event shall such extension exceed a period
of 90 days from the end of the  initial  90-day  period.  In the event the Board
denies the claim of a Participant  or the  Beneficiary  in whole or in part, the
Plan Administrator's  written notification shall specify, in a manner calculated
to be understood by the Participant or Beneficiary, the reason for the denial; a
reference  to the Plan or  other  document  or form  that is the  basis  for the
denial;  a description of any additional  material or information  necessary for
the  Participant or  Beneficiary to perfect the claim;  an explanation as to why
such information or material is necessary;  and an explanation of the applicable
claims procedure.

     Should the claim be denied in whole or in part and  should the  Participant
or Beneficiary be dissatisfied  with the Board's  disposition of the Participant
or Beneficiary's  claim, the Participant or Beneficiary may have a full and fair
review of the claim by the Corporation upon written request  therefor  submitted
by the  Participant  or Beneficiary or the  Participant  or  Beneficiary's  duly
authorized  representative  and received by the Corporation within 60 days after
the  Participant  or  Beneficiary   receives  written   notification   that  the
Participant  or  Beneficiary's  claim has been denied.  In connection  with such
review,  the Participant or Beneficiary or the Participant or Beneficiary's duly
authorized  representative  shall be entitled to review pertinent  documents and
submit the Participant or Beneficiary's views as to the issues, in writing.  The
Corporation  shall act to deny or accept the claim within 60 days after  receipt
of the  Participant or  Beneficiary's  written request for review unless special
circumstances  require the extension of such 60-day period. If such extension is
necessary,  the Corporation  shall provide the  Participant or Beneficiary  with
written  notification  of such  extension  before the expiration of such initial
60-day period.  In all events,  the Corporation  shall act to deny or accept the
claim within 120 days of the receipt of the Participant or Beneficiary's written
request  for  review.  The action of the  Corporation  shall be in the form of a
written notice to the  Participant  or Beneficiary  and its contents shall be in
the form of a written notice to the  Participant or Beneficiary and its contents
shall include all of the  requirements  for action on the original  claim. In no
event may a Participant  or  Beneficiary  commence legal action for benefits the
Participant or Beneficiary believes are due the Participant or Beneficiary until
the  Participant or Beneficiary has exhausted all of the remedies and procedures
afforded the Participant or Beneficiary by this Article 14.

13.   Administration

     a. The right of a Participant or the Participant's Beneficiary to receive a
distribution hereunder shall be an unsecured claim against the general assets of
the Corporation, and neither a Participant nor his or her designated Beneficiary
shall have any rights in or against any amount  credited to any  accounts  under
this Plan or any other  assets of the  Corporation.  The Plan at all times shall



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be considered  entirely unfunded both for tax purposes and for purposes of Title
I of the Employee Retirement Income Security Act of 1974, as amended.  Any funds
invested  hereunder  shall  continue  for all purposes to be part of the general
assets of the Corporation and available to its general creditors in the event of
bankruptcy or insolvency. Accounts under this Plan and any benefits which may be
payable  pursuant  to this Plan are not  subject in any manner to  anticipation,
sale, alienation,  transfer,  assignment,  pledge,  encumbrance,  attachment, or
garnishment by creditors of a Participant or a  Participant's  Beneficiary.  The
Plan  constitutes a mere promise by the Corporation to make benefit  payments in
the  future.  No  interest  or right to receive a benefit  may be taken,  either
voluntarily or  involuntarily,  for the  satisfaction  of the debts of, or other
obligations  or claims  against,  such  person or entity,  including  claims for
alimony, support, separate maintenance and claims in bankruptcy proceedings.

     b. The Plan shall be administered by the Vice President of Compensation and
Benefits of KeySpan, which shall have the authority, duty and power to interpret
and construe the provisions of the Plan as the Board deems appropriate including
the authority to determine eligibility for benefits under the Plan. The Board or
its designee  shall have the duty and  responsibility  of  maintaining  records,
making the requisite  calculations  and disbursing the payments  hereunder.  The
interpretations, determinations, regulations and calculations of the Board shall
be final and binding on all persons and parties concerned.

     c. Expenses of administration  shall be paid by the Corporation.  The Board
of  Directors  of the  Corporation  shall  be  entitled  to rely on all  tables,
valuations,  certificates,  opinions, data and reports furnished by any actuary,
accountant,  controller,  counsel or other  person  employed  or retained by the
Corporation with respect to the Plan.

     d. The Board of  Directors  of the  Corporation  shall  furnish  individual
annual  statements  of  accrued  benefits  to  each   Participant,   or  current
Beneficiary, in such form as determined by the Board of Directors or as required
by law.

     e. The sole right of a Participant or Beneficiary  under this Plan shall be
to have this Plan administered according to its provisions,  to receive whatever
benefits he or shall may be entitled to hereunder, and nothing in the Plan shall
be  interpreted  as a  guaranty  that  any  funds  in  any  trust  which  may be
established  in connection  with the Plan or assets of the  Corporation  will be
sufficient to pay any benefit hereunder.  Further,  the adoption and maintenance
of this Plan shall not be  construed  as creating  any  contract  of  employment
between the Corporation and any Participant. The Plan shall not affect the right
of the  Corporation  to deal  with  any  Participants  in  employment  respects,
including their hiring, discharge, compensation, and conditions of employment.

     f. The  Corporation  may from time to time  establish  rules and procedures
which it determines to be necessary  for the proper  administration  of the Plan
and the  benefits  payable  to an  individual  in the event that  individual  is
declared  incompetent and a conservator or other person  illegally  charged with
that individual's care is appointed.  Except as otherwise provided herein,  when
the  Corporation  determines that such individual is unable to manage his or her
financial  affairs,  the Corporation may pay such individual's  benefits to such
conservator,  person legally charged with such individual's care, or institution
then  contributing  toward or  providing  for the care and  maintenance  of such
individual.  Any such  payment  shall  constitute  a complete  discharge  of any
liability of the Corporation and the Plain for such individual.


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<PAGE>


     g. Each  Participant  shall  keep the  Corporation  informed  of his or her
current  address and the current  address of his or her designated  Beneficiary.
The Corporation  shall not be obligated to search for any person. If such person
is not located  within  three (3) years  after the date on which  payment of the
Participant's benefits payable under this Plan may first be made, payment may be
made as though the  Participant or his or her Beneficiary had died at the end of
such three-year period.

     h.  Notwithstanding  any  provision  herein to the  contrary,  neither  the
Corporation nor any individual acting as an employee or agent of the Corporation
shall be liable to any Participant, former Participant,  designated Beneficiary,
or any other  person for any claim,  loss,  liability  or  expense  incurred  in
connection with the Plan, unless  attributable to fraud or willful misconduct on
the part of the Corporation or any such employee or agent of the Corporation.

     i. All questions pertaining to the construction, validity and effect of the
Plan shall be determined in accordance with the laws of the United States and to
the extent not preempted by such laws, by the laws of the State of New York. The
Plan and all rights  hereunder shall be subject to and interpreted in accordance
with the laws of the State of New York,  without  reference to the principles of
conflicts of law.








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