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                                                                    EXHIBIT 3(b)

                                K N ENERGY, INC.

              (Formerly Kansas-Nebraska Natural Gas Company, Inc.)

                                  ---ooOoo---

                                 B Y - L A W S

                         As Amended to August 20, 1996

                           Effective August 20, 1996

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                                   ARTICLE I

                                    OFFICES

         Section 1.  Offices.  The registered office shall be at 205 F Street
in the City of Phillipsburg, County of Phillips, State of Kansas.  The
Company's principal executive office shall be at 370 Van Gordon Street,
Lakewood, Colorado 80228-8304 (mailing address:  Post Office Box 281304,
Lakewood, Colorado 80228-8304).

         Section 2.  Additional Offices.  The corporation may also have offices
at such other places both within and without the State of Kansas as the Board
of Directors may from time to time determine or the business of the corporation
may require.

                                   ARTICLE II

                            MEETING OF STOCKHOLDERS

         Section 1.  Time and Place.  The annual meeting of the shareholders
for the election of directors and all special meetings of shareholders for that
or for any other purpose may be held at such time and place within or without
the State of Kansas
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as shall be stated in the notice of the meeting, or in a duly executed waiver
of notice thereof.

         Section 2.  Annual Meeting.  The annual meeting of the shareholders
shall be held each year at a time to be determined by the Board of Directors,
at which meeting the shareholders shall elect a Board of Directors, and
transact such other business as may be properly brought before the meeting.

         Section 3.  Special Meetings.  Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute may be
called by the Chairman of the Board, if any, the President or the Board of
Directors, and shall be called by the President or the Secretary at the request
in writing of a majority of the directors, or at the request in  writing of
shareholders owning at least fifty-one percent (51%) in amount of the shares of
the Corporation issued and outstanding and entitled to vote.  Such request
shall state the purpose or purposes of the proposed meeting.

         Section 4.  Notice.  Written notice of the place, date and hour of any
annual or special meeting of shareholders shall be given personally or by mail
to each shareholder entitled to vote thereat, not less than ten (10) nor more
than fifty (50) days prior to the meeting.



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         The notice shall state in addition, the purpose or purposes for which
the meeting is called, and by, or at whose direction it is being issued.

         Section 5.  Quorum.  Except as otherwise provided by the Articles of
Incorporation, the holders of a majority of the shares of the Corporation
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be necessary to and shall constitute a quorum for
the transaction of business at all meetings of the shareholders.

         If, however, such quorum shall not be present or represented at any
meeting of the shareholders, the shareholders entitled to vote thereat present
in person or represented by proxy shall have power to adjourn the meeting from
time to time, but not for more than thirty (30) days, until a quorum shall be
present or represented.  At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.

         Section 6.  Voting.  At any meeting of the shareholders every
shareholder having the right to vote shall be entitled to vote in person, or by
proxy.  Except as otherwise provided by law or the Articles of Incorporation,
each shareholder of record shall be entitled, as to each proposal, to one vote
for each share of stock standing in his name on the books of the Corporation on
the date fixed as the record date for the





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determination of its shareholders entitled to vote.  All elections of directors
shall be by written ballot and shall be determined by a plurality vote, and,
except as otherwise provided by law or the Articles of Incorporation, all other
matters shall be determined by vote of a majority of the shares present or
represented at such meeting and voting on such questions.

         Section 7.  Proxies.  Every proxy must be executed in writing by the
shareholder or by his attorney-in-fact.  No proxy shall be valid after the
expiration of eleven (11) months from the date thereof, unless otherwise
provided in the proxy.  Every proxy shall be revocable at the pleasure of the
shareholder executing it, except in those cases where an irrevocable proxy is
permitted by law.

         Section 8.  Consents.  Whenever by any provision of law or of the
Articles of Incorporation, the vote of shareholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action, the
meeting and vote of shareholders may be dispensed with, if all the shareholders
who would have been entitled to vote upon the action if such meeting were held,
shall consent in writing to such corporate action being taken.

         Section 9.  Presiding Officer.  Meetings of the shareholders shall be
presided over by the Chairman of the Board, if any, or if he is not present, by
the President, or, if he is not present, 





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by a Vice President or, if neither the Chairman of the Board, the President nor
a Vice President is present, by a chairman to be chosen at the meeting.  The
Secretary of the Company or, if he is not present, an Assistant Secretary of
the Company or, if neither the Secretary nor an Assistant Secretary is present,
a secretary to be chosen at the meeting, shall act as secretary of the meeting.

         Section 10.  Notice of Shareholder Business.  At an annual meeting of
shareholders, only such business shall be conducted as shall have been properly
brought before the meeting (a) by or at the direction of the Board of Directors
or (b) by a shareholder who is a shareholder of record at the time of giving
such notice, who shall be entitled to vote at such meeting and who complies
with the notice procedures set forth in this Section.  For business to be
properly brought before an annual meeting by a shareholder, the shareholder
must have given timely notice thereof in writing to the Secretary.  To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation, not less than 40 days prior
to the meeting.  A shareholder's notice to the  Secretary shall set forth as to
each matter the shareholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at





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the annual meeting, (b) the name and address, as they appear on the
Corporation's books, of the shareholder proposing such business, (c) the class
and number of shares of the Corporation which are beneficially owned by the
shareholder, and (d) any material interest of the shareholder in such business.
Nothwithstanding anything in these By-Laws to the contrary, no business shall
be conducted at an annual meeting except in accordance with the procedures set
forth in this Section.  The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not properly
brought before the meeting and in accordance with the provisions of this
Section, and if he should so determine, he shall so declare to the meeting and
any such business not properly brought before the meeting shall not be
transacted.  Notwithstanding the foregoing provisions of this Section, a
shareholder shall also comply with all applicable requirements of the
Securities Exchange Act of 1934, as amended and the rules and regulations
thereunder with respect to the matters set forth in this Section.

                                  ARTICLE III

                                   DIRECTORS

         Section 1.  Number and Tenure.  The whole Board of Directors of the
Corporation shall consist of fourteen members.  The





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directors shall be classified with respect to the time for which they shall
severally hold office by dividing them into three classes, which were first
approved at the annual meeting of shareholders in 1975; Class I shall consist
of three directors whose initial term of office shall expire in 1994, Class II
shall consist of four directors whose initial term of office shall expire in
1995, and Class III shall consist of three directors whose initial term of
office shall expire in 1996.  Each director shall hold office until his
successor is duly elected and qualified or until his resignation in writing has
been filed with the corporation.  At each annual election, the successors of
the class of directors whose terms shall expire that year shall be elected to
hold office for a term of three years, so that the term of office of one class
of directors shall expire in each year, except where the Board of Directors
determines that a newly elected director shall be elected by the shareholders
to fill a vacancy of a directorship created subsequent to the previous annual
meeting, such director shall be elected to hold office for the balance of the
term of the class of directors of which he is to be a member, as determined by
the Board of Directors, and until his successor is elected and qualified.

         Section 2.  Vacancies.  A vacancy on the Board of Directors or a newly
created directorship may be filled by a majority of the remaining directors,
though less than a quorum, or by the





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sole director, by election of a new director, who at the time of his election
shall be designated as a member of one of the classes of directors and shall
hold office until the next election of the class of which he has become a
member, unless his term of office is terminated by death, resignation, or
otherwise.

         Section 3.  Resignation, Retirement; Removal.  Any director may resign
at any time.  Any director who experiences a change in his personal or business
circumstances or principal employment shall immediately tender his resignation
as a director of the Corporation to the Executive Committee of the Board of
Directors.  Any director who is not an employee of the Corporation shall retire
his position as a director at the annual meeting of the shareholders of the
Corporation next occurring after such director attains the age of 72 years.
The Board of Directors may by unanimous vote of other directors then in office,
remove a director with or without cause.  The shareholders entitled to vote for
the election of directors may remove a director, with cause as provided in the
Articles of Incorporation.

         Section 4.  Advisory Directors and Directors Emeritus.  The Board of
Directors by a vote of a majority of the directors present and entitled to
vote, at any regular or special meeting at which a quorum is present, may
designate such number of persons as it may from time to time determine, as an
"Advisory Director" or may designate a former member of the Board as a





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"Director Emeritus," if such former member is willing to so serve.  Each
Advisory Director and each Director Emeritus shall serve, subject to the
pleasure of the regular Board of Directors, until the next succeeding annual
meeting of the regular Board of Directors, following the annual meeting of the
stockholders, at which such regular directors are elected, unless he shall have
resigned.  Each Advisory Director and each Director Emeritus shall be notified
of all regular or special meetings of the regular Board of Directors, shall be
entitled to attend and participate therein, but shall not be entitled to vote.
Each Advisory Director and each Director Emeritus shall be reimbursed for any
necessary expenses of attending directors' meetings.

         Section 5.  Nomination of Director Candidates.

         (a)  Eligibility to Make Nominations.  Nominations of candidates for
election as directors of the Corporation at any meeting of shareholders called
for election of directors, in whole or in part (an "Election Meeting"), may be
made by the Board of Directors or by any shareholder who is a shareholder of
record at the time of giving notice, who shall be entitled to vote at such
Election Meeting and who complies with the notice procedures set forth in this
Section.

         (b)  Procedure for Nominations by Shareholders.  Nominations, other
than those made by the Board of Directors, shall be made pursuant to timely
notice in writing to the





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Secretary.  To be timely, shareholder's notice shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less
than 40 days prior to the date of the Election Meeting.  Such shareholder's
notice shall set forth (i) the name, age, business address and residence
address of each nominee proposed in such notice, (ii) the principal occupation
or employment of each such nominee, (iii) the number of shares of capital stock
of the Corporation which are beneficially owned by each such nominee and (iv)
such other information concerning each such nominee as would be required, under
the rules of the SEC, in a proxy statement soliciting proxies for the election
of such nominees.  Such notice shall include a signed consent to serve as a
director of the Corporation, if elected, of each such nominee.  Such notice
shall also set forth as to the shareholder giving the notice (i) the name and
address, as they appear on the Corporation's books, of such shareholder and
(ii) the class and number of shares of the Corporation which are beneficially
owned by such shareholder.

         (c)  Meeting Procedures.  No person shall be eligible for election as
a director of the Corporation unless nominated in accordance with the
procedures set forth in this Section.  The Chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that a nomination was
not made in accordance with the procedures prescribed by this Section 5, and





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if he should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.

         (d)  Substitution of Nominees.  In the event that a person is validly
designated as a nominee to the Board and shall thereafter become unable or
unwilling to stand for election to the Board of Directors, the Board of
Directors or the shareholder who proposed such nominee, as the case may be, may
designate a substitute nominee.

         (e)  Securities Exchange Act of 1934.  Notwithstanding the foregoing
provisions of this Section, a shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended and the rules
and regulations thereunder with respect to the matters set forth in this
Section.

                                   ARTICLE IV

                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 1.  Place.  The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Kansas.

         Section 2.  Regular Meetings.  Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board.

         Section 3.  Special Meetings.  Special meetings of the Board of
Directors may be called by the Chairman of the Board, if any,





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or by the President on two days' notice to each director, either personally or
by mail or by telegram; special meetings shall be called by the Chairman,
President or Secretary in like manner and on like notice on the written request
of two directors.

         Section 4.  Quorum.  At all meetings of the Board of Directors a
majority of the entire Board shall be necessary to and constitute a quorum for
the transaction of business and the act of a majority of the directors present
at any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by
the Articles of Incorporation.  If a quorum shall not be present at any meeting
of the Board of Directors the directors present thereat may adjourn the meeting
from time to time until a quorum shall be present.  Notice of such adjournment
shall be given to any directors who  were not present and, unless announced at
the meeting, to the other directors.

         Section 5.  Consents.  Unless otherwise restricted by the Articles of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or of such committee as the case
may be, consent thereto in writing and such written consent is filed with the
minutes of the Board or committee.  Such consents may be in





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counterpart so that each member will have signed a consent, but all members
need not sign the same document.

         Section 6.  Compensation.  Directors, as such, shall not receive any
stated salary for their services, but, by resolution of the Board of Directors
an annual fee, plus a fee and expenses for attendance at meetings may be
allowed, provided that nothing herein contained shall be construed to preclude
any director from serving the Corporation in any other capacity and receiving
compensation therefor.

         Section 7.  Presiding Officer.  Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or, if he is not
present, by the President or, if he is not present, by a chairman to be chosen
at the meeting.  The Secretary of the Company, or, if he is not present, an
Assistant Secretary of the Company, or, if neither the Secretary nor an
Assistant Secretary is present, a secretary to be chosen at the meeting, shall
act as secretary of the meeting.

                                   ARTICLE V

                            COMMITTEES OF DIRECTORS

         Section 1.  Designation.  The Board of Directors, by resolution
adopted by a majority of the whole Board, may designate from among its members
one or more committees, each consisting of two or more directors, each of
which, to the extent





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provided in such resolution, shall have and may exercise the powers of the
Board of Directors in the business and affairs of the Corporation, and may
authorize the seal of the Corporation to be affixed to all papers which may
require it.

         The Board may designate one or more directors as alternate members of
any committee who may replace any absent or disqualified member at any meeting
of the committee.

         Section 2.  Tenure; Reports.  Each such committee shall serve at the
pleasure of the Board.  It shall keep minutes of its meetings and report the
same to the Board.

                                   ARTICLE VI

                              EXECUTIVE COMMITTEE

                 Section 1.  Appointment and Authority.  The Board of Directors
may by resolution or resolutions passed by a majority of the whole Board create
and designate an Executive Committee consisting of the officer who is
designated as Chief Executive Officer and two or more other directors of the
Company who shall hold office subject to the pleasure of the Board of
Directors, and the Board shall have the power at any time to remove any of the
members of the Executive Committee and to appoint to the Committee other
directors in lieu of the directors so removed.  The Chief Executive Officer
shall serve as Chairman of the Executive Committee.  During the intervals
between the meetings





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of the Board of Directors the Executive Committee shall possess and may
exercise the powers delegated by the Board of Directors, including the power to
authorize the seal of the Company to be affixed to all papers which may require
it, to authorize the payment of dividends, to authorize the issuance of stock,
to serve as a nominating committee for the Board of Directors and to approve
resolutions necessary for the day-to-day operations of the Company; provided,
however, that the Executive Committee shall not have power to amend these
By-Laws or to fill vacancies on the Board of Directors or to fill vacancies in,
or to change the membership of, said Committee.  The Executive Committee shall
also have and may exercise all the powers of the Board of Directors except as
aforesaid whenever a quorum of the Board shall fail to be present at any
meeting of the Board.

         Section 2.  Report of Action Taken.  All action of the Executive
Committee shall be reported to the Board of Directors at its meeting next
succeeding such action, and shall be subject to revision and alteration by the
Board, provided that no rights of third parties shall be affected by any such
revision or alteration.  Regular minutes of the proceedings of the Executive
Committee shall be kept in a book provided for that purpose.

         Section 3.  Quorum and Procedure.  A majority of the members of the
Executive Committee shall be necessary to constitute a quorum, and, in every
case, an affirmative vote of a majority of





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the members shall be necessary for the passage of any resolution.  It shall fix
its own rules of  procedure and shall meet as provided by such rules or by
resolution of the Board, and it shall also meet at the call of the Chairman or
of any two members of the Committee.  Should the Executive Committee fail to
fix its own rules therefor, the provisions of these By-Laws, pertaining to the
calling of meetings and conduct of business by the Board of Directors, shall
apply as nearly as may be.

         Section 4.  Consent.  Unless otherwise restricted by statute, the
Articles of Incorporation or these By-Laws, any action required or permitted to
be taken at any meeting of the Executive Committee thereof may be taken without
a meeting, if a written consent thereto is signed by each member of the
Executive Committee, and such written consent is filed with the minutes of
proceedings of the Executive Committee.  Such consents may be in counterpart so
that each member will have signed a consent but all members need not sign the
same document.

                                  ARTICLE VII

                                    NOTICES

         Section 1.  Form; Delivery.  Notices to directors and shareholders
shall be in writing and delivered personally or mailed to the directors or
shareholders at their addresses appearing on the books of the Corporation.
Notice by mail shall





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be deemed to be given at the time when the same shall be mailed.  Notice to
directors may also be given by telegram.

         Section 2.  Waiver.  Whenever any notice is required to be given under
the provisions of the statutes or of the Articles of Incorporation or of these
By-Laws, a waiver thereof in writing, signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.  In addition, any shareholder attending a meeting of
shareholders in person or by proxy without protesting at the beginning of the
meeting the lack of notice thereof to him, and any director attending a meeting
of the Board of Directors without protesting prior to the meeting or at its
commencement such lack of notice shall be conclusively deemed to have waived
notice of such meeting.

                                  ARTICLE VIII

                                    OFFICERS

         Section 1.  Executive Officers.  The executive officers of the
Corporation shall be a President and one or more Vice Presidents, a Secretary,
a Treasurer and may include a Chairman of the Board.

         Section 2.  Designation; Term of Office; Removal.  All officers shall
be elected by the Board of Directors and shall hold office for such term as may
be prescribed by the Board or





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until their successors are chosen and qualified or until their resignation is
filed in the office of the Secretary, whichever first occurs.  Any officer
elected by the Board may be removed with or without cause at any time by the
Board.

         Section 3.  Authority and Duties.  All officers, as between themselves
and the Corporation, shall have such authority and perform such duties in the
management of the Corporation as may be provided in these By-Laws, or, to the
extent not so provided, by the Board of Directors.

         Section 4.  Compensation.  The compensation of all officers of the
Corporation shall be fixed by the Board of Directors and the compensation of
agents shall either be so fixed or shall be fixed by officers thereunto duly
authorized.

         Section 5.  Vacancies.  If an office becomes vacant for any reason,
the Board of Directors shall fill such vacancy.  Any officer so elected by the
Board shall serve only until such time

as the unexpired term of his predecessor shall have expired unless re-elected
or reappointed by the Board.

         Section 6.  The Chairman of the Board.  The Chairman of the Board of
Directors, if there be a Chairman, shall preside at all meetings of the
shareholders and directors and shall have such other powers and duties as may
from time to time be assigned by the Board including designation as Chief
Executive Officer if the President is not so designated.





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         Section 7.  The President.  The President shall be the Chief Executive
Officer of the Corporation unless the Chairman of the Board is so designated,
in which event the President shall be Chief Operating Officer of the
Corporation.  In the absence of the Chairman of the Board, or if there be no
Chairman, he shall preside at all meetings of the shareholders and directors.
The Chief Executive Officer, whether the Chairman of the Board or the
President, shall be ex officio a member of all standing  committees, shall have
general and active management and control of the business and affairs of the
Corporation subject to the control of the Board of Directors, and shall see
that all orders and resolutions of the Board are carried into effect.

         Section 8.  Vice Presidents.  The Vice Presidents in the order of
their seniority or in any other order determined by the Board, shall in the
absence or disability of the President, perform the duties and exercise the
powers of the President, and shall generally assist the President and perform
such other duties as the Board of Directors or the President shall prescribe.

         Section 9.  The Secretary.  The Secretary shall attend all meetings of
the Board and all meetings of the shareholders and record all votes and the
minutes of all proceedings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required.  He shall give,
or cause to be





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given, notice of all meetings of the shareholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or President, under whose supervision he shall act.  He
shall keep in safe custody the seal of the Corporation and, when authorized by
the Board, affix the same to any instrument requiring it and, when so affixed,
it shall be attested by his signature or by the signature of the Treasurer or
an Assistant Secretary or Assistant Treasurer.  He shall keep in safe custody
the certificate books and shareholder records and such other books and records
as the Board may direct and shall perform all other duties incident to the
office of the Secretary.

         Section 10.  Assistant Secretaries.  The Assistant Secretaries, if
any, in order of their seniority or in any other order determined by the Board
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such other duties as the
Board of Directors or the Secretary shall prescribe.

         Section 11.  The Treasurer.  The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the





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Board of Directors.  He shall disburse the funds of the  Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as Treasurer and of the financial condition of the
Corporation.  He shall establish and execute programs for the provision of the
capital required by the Company, including negotiating the procurement of
capital and maintaining the required financial arrangements.  He shall
establish and maintain an adequate market for the Company's securities and, in
connection therewith, maintain adequate liaison with investment bankers,
financial analysts and shareholders.  He shall maintain adequate sources for
the Company's current borrowings from commercial banks and other lending
institutions.

         He shall maintain banking arrangements to receive, have custody of and
disburse the Company's moneys and securities.  He shall invest the Company's
funds as required and establish and coordinate policies for investment in
pension and other similar trusts.

         Section 12.  Assistant Treasurers.  The Assistant Treasurers, if any,
in the order of their seniority or in any other order determined by the Board,
shall in the absence or disability of the Treasurer, perform the duties and
exercise the





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power of the Treasurer and shall perform such other duties as the Board of
Directors or the Treasurer shall prescribe.

                                   ARTICLE IX

                             CERTIFICATE OF SHARES

         Section 1.  Form; Signature.  The certificates for shares of the
Corporation shall be in such form as shall be determined by the Board of
Directors and shall be numbered consecutively and entered in the books of the
Corporation as they are issued.  Each certificate shall exhibit the registered
holder's name and the number and class of shares, and shall be signed by the
President or a Vice President and the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and shall bear the seal of the
Corporation or a facsimile thereof.  Where any such certificate is
countersigned by a transfer agent or by a registrar other than the Corporation,
the signature of any such officer may be a facsimile signature.  In case any
officer who signed, or whose facsimile signature or signatures were placed on
any such certificate shall have ceased to be such  officer before such
certificate is issued, it may nevertheless be issued by the Corporation with
the same effect as if he were such officer at the date of issue.

         Section 2.  Lost Certificates.  The Board of Directors may direct a
new share certificate or certificates to be issued in





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place of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate to be lost or destroyed.  When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to give the Corporation a bond in
such sum as it may direct as indemnity against any claim that may be made
against the Corporation with respect to the certificate alleged to have been
lost or destroyed.

         Section 3.  Registration of Transfer.  Upon surrender to the
Corporation or any transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, it shall be the duty of the Corporation,
or such transfer agent to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.

         Section 4.  Registered Shareholders.  Except as otherwise provided by
law, the Corporation shall be entitled to recognize the exclusive right of a
person registered on its books as the owner of shares to receive dividends or
other distributions, and to vote as such owner, and to hold liable for calls a
person





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registered on its books as the owner of shares, and shall not be bound to
recognize any equitable or legal claim to or interest in such share or shares
on the part of any other person.

         Section 5.  Record Date.  For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or to express consent to or dissent from any proposal
without a meeting, or for the purpose of determining shareholders entitled to
receive payment of any dividend or the allotment of any rights, or for the
purpose of any other action affecting the interests of shareholders, the Board
of Directors may fix, in advance,  a record date.  Such date shall not be more
than sixty (60) nor less than ten (10) days before the date of any such
meeting, nor more than sixty (60) days prior to any other action.

         In each such case, except as otherwise provided by law, only such
persons as shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting and any adjournment
thereof, or to express such consent or dissent, or to receive payment of such
dividend, or such allotment of rights, or otherwise to be recognized as
shareholders for the related purpose, notwithstanding any registration of
transfer of shares on the books of the Corporation after any such record date
so fixed.





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<PAGE>   25
                                   ARTICLE X

                               GENERAL PROVISIONS

         Section 1.  Dividends.  Subject to the provisions of the Articles of
Incorporation, if any, dividends upon the outstanding shares of the Corporation
may be declared by the Board of Directors at any regular or special meeting,
pursuant to law and may be paid in cash, in property, or in shares of the
Corporation.

         Section 2.  Reserves.  Before payment of any dividends, there may be
set aside out of any funds of the Corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation, or
for such other purpose as the directors shall think conducive to the interest
of the Corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.

         Section 3.  Annual Statement.  The Board of Directors shall present at
each annual meeting, and at any special meeting of the stockholders when called
for by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.





                                       25
<PAGE>   26
         Section 4.  Instruments Under Seal.  All deeds, bonds, mortgages,
contracts, and other instruments requiring a seal may be signed in the name of
the Corporation by the President or by any other officer authorized to sign
such instrument by the President or the Board of Directors.

         Section 5.  Checks.  All checks or demands for money and notes or
other instrument evidencing indebtedness or obligation of the Corporation shall
be signed by such officer or officers or such other person or persons as the
Board of Directors may from time to time designate.

         Section 6.  Fiscal Year.  The fiscal year of the Corporation shall
begin on the first day of January of each year and shall end on the
thirty-first day of December following.

         Section 7.  Seal.  The corporate seal shall have inscribed thereon the
name of the corporation and the words "Corporate Seal, Kansas 1927."  The seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.

                                   ARTICLE XI

                                   AMENDMENTS

         Section 1.  These By-Laws may be altered or repealed at any regular
meeting of the Board of Directors, or at any special meeting of the Board of
Directors if notice of such alteration or repeal be contained in the notice of
such special meeting.





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<PAGE>   27
                                  ARTICLE XII

                         SPECIAL MANAGEMENT PROVISIONS

         Section 1. General.  The provisions of this Article XII of the By-Laws
have been adopted by the Board of Directors of the Corporation pursuant to that
certain Agreement of Merger by and between the Corporation, KNE Acquisition
Corporation, a Delaware corporation, and American Oil and Gas Corporation, a
Delaware corporation dated March 24, 1994 (the "Merger Agreement").
Capitalized terms used in this Article XII not otherwise defined herein shall
have the meaning ascribed to them in the Merger Agreement.  The provisions of
this Article XII shall be effective from and after the Effective Time
notwithstanding any other provisions of these By-Laws to the contrary.  In the
event of a conflict between the provisions of this Article XII and other
provisions of the By-Laws, the provisions of this Article XII shall control.

         Section 2.  Cabot Director.  For so long as Cabot Corporation shall
continue to own beneficially (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission) 10% or more of the issued and
outstanding voting stock of the Corporation, Cabot Corporation shall have the
right to designate one person to serve as an advisory director of the
Corporation.  In the event beneficial ownership of Cabot





                                       27
<PAGE>   28
Corporation of the issued and outstanding voting stock of the Corporation falls
below 10% but constitutes more than 5%, the Board of Directors shall appoint
the Cabot Corporation advisory director as a full director, to serve the then
remaining term of a Class II director.  For so long as Cabot Corporation
continues to own beneficially less than 10% but more than 5% of the issued and
outstanding voting stock of the Corporation, the Board of Directors shall
nominate a Cabot Corporation designee (provided that such nominee is otherwise
qualified as required by these By-Laws) for election by the Corporation's
stockholders as a director.  The Corporation shall at all times during which
Cabot Corporation shall beneficially own in excess 10% of the issued and
outstanding voting stock of the Corporation, maintain a vacancy on its Board of
Directors for such Cabot designee.

         Section 3.  Vacancies in Certain Offices.  Any vacancy arising
following the Effective Time and prior to the Corporation's Annual Meeting of
Stockholders in 1996, in the offices of the Chairman of the Board,
Vice-Chairman of the Board, President, Chief Executive Officer or Chief
Operating Officer, or on the Management Committee or the Chairman of the
Management Committee, shall be filled by the Board of Directors upon
recommendation by a Special Nominating Committee of the Board of Directors.
The Board of Directors shall by majority vote establish a Special Nominating
Committee in the event of a





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<PAGE>   29
vacancy in any of the foregoing positions.  The Special Nominating Committee
shall consist of four directors, two of whom shall be designated by the Board
of Directors from the directors of the Corporation who served as a director
prior to the Effective Time, and two of whom shall be designated by the
directors designated by American Oil and Gas Corporation in the Merger
Agreement.

         Section 4.  Continuation of Retirement Policy.  The Corporation shall
continue its present retirement policy that officers of the Corporation
(including the Chairman of the Board, Vice-Chairman of the Board, President and
Chief Executive Officer or Chief Operating Officer) shall be ineligible and
cease to serve as an officer of the Corporation as of the first of the month
coincident with or next following his or her 65th birthday.

         Section 5.  Super-Majority Vote.  For purposes of this Article XII,
the term "Super-Majority Vote" shall mean the affirmative vote of at least 12
of a 14-member Board of Directors; at least 11 of a 13-member Board of
Directors; at least 10 of a 12-member Board of Directors; at least 9 of an
11-member Board of Directors; or in all other cases, the affirmative vote of a
number of directors equal to at least 85% of the total number of directors.  A
Super-Majority Vote shall be required for the following actions to be taken by
the Board of Directors; (i) amendment, modification or revocation of any
provision of this





                                       29
<PAGE>   30
Article XII; (ii) amendment, modification or revocation of the current
retirement policy of the Corporation; and (iii) any increase in the number of
members to serve on the Board of Directors; provided that, no Super-Majority
Vote shall be required for any such action taken by the Board of Directors from
and after the date of the annual stockholders meeting for 1997.

         I hereby certify that the foregoing are the By-Laws of K N Energy,
Inc.  as the same were adopted at the meeting of the Board of Directors on May
20, 1975, and subsequently amended at meetings of the Board of Directors on
November 20, 1975, November 8, 1978, August 5, 1983, November 11, 1983,
November 16, 1984, January 9, 1988, March 24, 1989, August 10, 1989, January
20, 1991, November 10, 1993, June 24, 1994, July 13, 1994, April 11, 1996 and
are still in force and effect on this 20th day of August, 1996.



         ---------------------------------------
                    Martha B. Wyrsch
                       Secretary





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