EXHIBIT 10(b)
                            GUARANTY

     GUARANTY, dated July 25, 1997, made by Peoples Energy
Corporation, a corporation, organized and existing under the laws
of the State of Illinois (the "Guarantor").

                           WITNESSETH:

     WHEREAS, it is a condition of Northern Border Pipeline
Company ("Northern Border") in entering into the U.S. Shippers
Service Agreement # T1098F (as amended and supplemented from time
to time, the "Agreement") that the Guarantor execute and deliver
this Guaranty;
     WHEREAS, Northern Border has entered, or will be entering,
into an Agreement, which Agreement is identical to or
substantially in the form of the copy attached hereto, with
Peoples Energy Services Corporation (together with its successors
and assigns, "Shipper");
     WHEREAS, Shipper is a wholly-owned subsidiary of the
Guarantor,
     NOW, THEREFORE, in consideration of the foregoing, the
receipt and sufficiency of which are hereby acknowledged, the
Guarantor hereby agrees as follows:
     
     1.   The Guarantor irrevocably and unconditionally
guarantees the full and prompt payment when due of all amounts to
be paid by Shipper under or pursuant to the Agreement and the
performance of all other obligations and liabilities of Shipper
now existing or hereafter incurred under, or arising out of the
Agreement (all such amounts, obligations, and liabilities
collectively referred to as the "Guaranteed Obligations"). This
Guaranty applies to all successors and/or assigns of Shipper.

     2.   The Guarantor hereby waives notice of acceptance of
this Guaranty and notice of any liability to which it may apply,
and waives presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liability, suit or taking of
other action by Northern Border against, and any other notice to,
any party liable thereon (including such Guarantor or any other
guarantor).

     3.   Northern Border may at any time and from time to time
without consent of, or notice to the Guarantor, and without
impairing or releasing any of the obligations of the Guarantor
hereunder:
          (a) change the manner, place or terms of payment of,
and/or change or extend the time of payment of, renew or alter,
any of the Guaranteed Obligations;
          (b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property
securing the Guaranteed Obligations;
          (c) exercise or refrain from exercising any rights
against Shipper or others or otherwise act or refrain from
acting;
          (d) settle or compromise any of the Guaranteed
Obligations, any security therefor or any liability (including
any of those hereunder) incurred directly or indirectly in
respect thereof or hereof,
          (e) apply any sums, regardless of how realized, to any
liability owing by Shipper to Northern Border under or pursuant
to the Agreement;
          (f) consent to or waive any breach of, or any act,
omission or default under the Agreement or otherwise amend,
modify or supplement the Agreement; and
          (g) act or fail to act in any manner referred to in
this Guaranty which may deprive the Guarantor of its right to
subrogation against Shipper to recover full indemnity for any
payments made pursuant to this Guaranty.
          
      4.  The obligations of the Guarantor under this Guaranty
are absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance
or occurrence whatsoever, including, without limitation: (a) any
action or inaction by Northern Border as contemplated in Section
3 of this Guaranty; (b) the bankruptcy, insolvency, liquidation
or reorganization of Shipper; or (c) any change in the ownership
or structure of Shipper.

     5.   If and to the extent that the Guarantor makes any
payment to Northern Border pursuant to this Guaranty, any claim
which the Guarantor may have against Northern Border by reason
thereof shall be subject and subordinate to the prior payment in
full of the Guaranteed Obligations.

     6.   The Guarantor makes the following representations,
warranties, and agreements:
          (a) The Guarantor (i) is a duly organized and validly
existing corporation in good
standing under the laws of the jurisdiction of its incorporation
and (ii) has the power and authority to own its property and
assets and to transact the business in which it is engaged.
          (b) The Guarantor has the corporate power to execute,
deliver and perform the terms and provisions of this Guaranty and
has taken all necessary corporate action to authorize the
execution, delivery and performance by it of this Guaranty. The
Guarantor has duly executed and delivered this Guaranty, and this
Guaranty constitutes its legal, valid and binding obligation
enforceable in accordance with its terms.
          (c) Neither the execution, delivery or performance by
the Guarantor of this Guaranty, nor compliance by it with the
terms and provisions hereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality
applicable to the Guarantor, (ii) will conflict or be
inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the
obligation to create or impose) any lien upon any of the property
or assets of the Guarantor pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other agreement, contract or instrument to which
the Guarantor is a party or by which it or any of its property or
assets is bound or to which it may be subject or (iii) will
violate any provision of the Certificate of Incorporation or By-
Laws of the Guarantor.
          
     7.   This Guaranty is a continuing one and all liabilities
to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No
failure or delay on the part of Northern Border in exercising any
right, power or privilege hereunder and no course of dealing
between the Guarantor or Northern Border shall operate as a
waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly
provided are cumulative and not exclusive of any rights, powers,
or remedies which Northern Border would otherwise have. In the
event any of the Guaranteed Obligations are, after receipt of
payment thereof, required to be paid by Northern Border pursuant
to the order of any court to or for the benefit of any creditor
of Shipper or the Guarantor, the obligations of the Guarantor
hereunder shall be reinstated.

     8.   This Guaranty shall be binding upon the Guarantor and
its successors and assigns and shall inure to the benefit of
Northern Border and its successors and assigns.

     9.   All notices and other communications hereunder shall be
in writing and shall be deemed given when delivered personally or
by reputable overnight carrier or when received if sent by
registered or certified marl, return receipt requested, to the
parties at the following addresses (or at such other address as a
party may specify by like notice):
          (a) If to Guarantor, to:

            Peoples Energy Corporation
            130 East Randolph Drive
            Chicago, Illinois 60601
            Attention: Executive Vice President

          (b) If to Northern Border, to:

            Northern Border Pipeline Company
            1111 South 103rd Street
            P.O. Box 3330 (Zip: 68103-0330)
            Omaha, NE 68124-1000
            Attention: Director, Partnership Finance

          10. This Guaranty shall be governed by and construed in
accordance with the laws of the State of Nebraska, without regard
to principles of conflicts of law.

          IN  WITNESS  WHEREOF,  the Guarantor  has  caused  this
Guaranty to be executed and delivered as of the date first  above
written.
          
                                PEOPLES ENERGY CORPORATION


                              By  /s/ T. M. Patrick
                                 
                           Title: Executive Vice President


                              Attest:

                                /s/ Peter Kauffman
                                 
                              Title: Assistant Secretary

                                
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

This Agreement, (the "Service Agreement") is made and entered
into at Omaha, Nebraska as of August 1, 1997, by and between
NORTHERN BORDER PIPELINE COMPANY, hereinafter referred to as
"Company" and PEOPLES ENERGY SERVICES CORPORATION, a(n) Illinois
corporation, hereinafter referred to as "Shipper".

WHEREAS,  Tennessee  Gas  Pipeline  Company  and  other  Shippers
(collectively  referred to as the "Great Plains  Shippers")  have
contracted  to  purchase the synthetic gas  output  of  the  Coal
Gasification  Plant located in Mercer County, North Dakota,  from
Dakota Gasification Company; and

WHEREAS,  Tennessee Gas Pipeline Company is permanently assigning
its  gas  purchase  obligations under the Gas Purchase  Agreement
dated  as  of  January 29, 1982 and subsequently  amended  as  of
February  16,  1994  between  Dakota  Gasification  Company   and
Tennessee  Gas Pipeline Company (hereinafter referred to  as  the
Gas   Purchase   Agreement)   and   permanently   releasing   its
transportation  obligations  under  its  U.S.  Shippers   Service
Agreement  #T1007  dated  as of July 14,  1983,  as  amended,  to
Shipper; and

WHEREAS,  the  Amendment terminating the  U.S.  Shippers  Service
Agreement   #T1007  will  become  effective  upon   the   Billing
Commencement Date of this Service Agreement; and,

WHEREAS, Company's investors and lenders rely on Certificates  of
Public  Convenience and Necessity granted by the  Federal  Energy
Regulatory Commission and on the Tariff for the return of and the
return on all funds invested in or loaned to the Company; and

WHEREAS,  the transportation of natural gas shall be  effectuated
pursuant  to  Part  157  or  Part  284  of  the  Federal   Energy
Regulatory. Commission's Regulations; and

WHEREAS,  Company recognizes that it will be a condition  to  the
initial   effectiveness   of   this   Service   Agreement   that,
notwithstanding any other provision of the Tariff or this Service
Agreement,   the   FERC   and  all  other   appropriate   federal
governmental  authorities and/or agencies in  the  United  States
shall  have  issued,  under  terms and conditions  acceptable  to
Shipper, all final nonappealable authorizations and certificates;

NOW THEREFORE, in consideration of their respective covenants and
agreements  hereinafter set out, the parties hereto covenant  and
agree as follows:

                                
                                
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

Article 1 - Basic Receipts

Shipper  shall  on  each  day beginning  with  Shipper's  Billing
Commencement  Date, as defined in Section 1 of the General  Terms
and  Conditions  of  Company's FERC Gas Tariff,  be  entitled  to
tender  and,  following tender, deliver to Company,  at  each  of
Shipper's  Points of Receipt, a quantity of gas not in excess  of
the  Daily  Receipt Quantity for such Point of Receipt  for  such
clay,  as defined in such Section 1, and Company shall,  on  such
day,  take  receipt  of  the quantity  of  gas  so  tendered  and
delivered by Shipper at such Point of Receipt.

Article 2 - Excess Receipts

If Shipper shall desire to tender to Company on any day beginning
with  Shipper's  Billing Commencement Date, at any  of  Shipper's
Points of Receipt, a quantity of gas in excess of Shipper's Daily
Receipt Quantity for such Point of Receipt for such day, it shall
notify  Company of such desire. If Company in its sole  judgment,
determines  that  it  has  available the  necessary  capacity  to
receive and transport all or any part of such excess quantity and
make  deliveries in respect thereof, and that the performance  of
Company's  obligations to other Shippers under  their  Agreements
will  not  be  adversely affected thereby, Company may  elect  to
receive  from  Shipper said excess quantity or part thereof,  and
shall so notify Shipper. Scheduling of Excess Receipts will be in
accordance with Section 10 of the General Terms and Conditions.

Article 3 - Deliveries

Company  shall deliver gas to Shipper at the Point(s) of Delivery
and  under  the conditions specified in Exhibit A hereto  and  in
accordance with Section 13 of the General Terms and Conditions.

Article 4 - Payments

Shipper  shall make payments to Company in accordance  with  Rate
Schedules  T-1  and  OT-I  and  the other  applicable  terms  and
provisions of this Service Agreement.

Article 5 - Change in Tariff Provisions

Upon notice to Shipper, Company shall have the right to file with
the Federal Energy Regulatory Commission any changes in the terms
of  any  of  its Rate Schedules, General Terms and Conditions  or
Form  of Service Agreement as Company may deem necessary, and  to
make such changes effective at such times as Company desires  and
is possible under applicable law.

                                
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

Shipper  may protest any filed changes before the Federal  Energy
Regulatory Commission and exercise any other rights it  may  have
with respect thereto.

Article 6 - Cancellation of Prior Agreements

When   this  Service  Agreement  becomes  effective,   it   shall
supersede, cancel and terminate the following Agreements:

                    U.S. Shippers Service Agreement dated as of
                    July 14, 1983 by and between Company and
                    Tennessee Gas Pipeline Company as amended


Article 7 - Term

This  Service Agreement shall become effective upon its execution
and   shall  under  all  circumstances  continue  in  effect   in
accordance  with  the  Tariff following the Billing  Commencement
Date  until  December  31,  2008, and shall  continue  in  effect
thereafter  until  extended  or  terminated  in  accordance  with
Section  5 of the Rate Schedule T-1.  Shipper shall give  Company
not  less  than six (6) months prior written notice of  Shipper's
intent  to terminate this Service Agreement.  Provided,  however,
that if the Shipper is relieved of its obligations under the  Gas
Purchase agreement as a result of the application of Article XIX,
then  Shipper  shall  have the right to  terminate  this  Service
Agreement and such termination shall be effective within six  (6)
months  of  Company's receipt of such notice  of  termination  by
shipper.

In the event of termination as aforesaid, Shipper shall reimburse
Company on a pro rata basis based on its Maximum Receipt Quantity
for   the   net  undepreciated  book  value  of  any   additional
facilities,  including construction work in progress, constructed
or  being  constructed  to  provide  transportation  service  for
Shipper; provided, however, Shipper's obligation to pay  its  pro
rata share of the net undepreciated book value of such facilities
shall  be  reduced  to  the  extent  that  shipper  contracts  to
transport  volumes from other sources through Company's  pipeline
or  Company  uses such facilities to provide service for  another
party.

This Service Agreement shall automatically terminate and be of no
further  force and effect unless Shipper shall furnish  a  proper
security arrangement, in accordance with Subsection 9.1  of  Rate
Schedule  T-1, to the Company within (30) days after notice  from
the  Company subsequent to the occurrence of any of the following
events:


                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

     The  filing by Shipper or its parent of a voluntary petition
     in  bankruptcy or the entry of a decree or order by a  court
     having jurisdiction in the premises adjudging the Shipper as
     bankrupt  or  insolvent, or approving as  properly  filed  a
     petition seeking reorganization, arrangement, adjustment  or
     composition  of  or  in  respect of the  Shipper  under  the
     Federal  Bankruptcy Act or any other applicable  federal  or
     state  law, or appointing a receiver, liquidator,  assignee,
     trustee,  sequestrator (or other similar  official)  of  the
     Shipper  or  any  substantial part of its property,  or  the
     ordering  of  the winding-up or liquidation of its  affairs,
     with  said order or decree continuing unstayed and in effect
     for a period of sixty (60) consecutive days.

     A  failure  by  Shipper to pay in full  the  amount  of  any
     invoice rendered by Company shall continue for ten (10) days
     from the date payment is due.

Termination  of this Service Agreement shall not relieve  Company
and  Shipper of the obligation to correct any Receipt or Delivery
Imbalances  hereunder, or Shipper to pay money due  hereunder  to
Company  and  shall  be in addition to any  other  remedies  that
Company may have.

Article 8 - Applicable Law and Submission to Jurisdiction

For  purposes of legal proceedings, this Service Agreement  shall
be  deemed to have been made in the State of Nebraska and  to  be
performed  there,  and  the  Courts  of  that  State  shall  have
jurisdiction over all disputes which may arise under this Service
Agreement,  provided always that nothing herein  contained  shall
prevent  the Company from proceeding at its election against  the
Shipper in the Courts of any other state, Province or country.

At  the  Company's request, the Shipper shall irrevocably appoint
an  agent  in  Nebraska to receive, for it  and  on  its  behalf,
service of process in connection with any judicial proceeding  in
Nebraska relating to this Service Agreement.  Such service  shall
be  deemed completed on delivery to such process agent  (even  if
not  forwarded  to and received by the Shipper).  If  said  agent
ceases  to  act as a process agent within Nebraska on  behalf  of
Shipper,  the  Shipper shall appoint a substitute  process  agent
within  Nebraska  and deliver to the Company a copy  of  the  new
agent's acceptance of that appointment within 30 days.

Article 9 - Successors and Assigns

Any  person which shall succeed by purchase, amalgamation, merger
or consolidation to the properties, substantially as an entirety,
of  Shipper  or of Company, as the case may be, and  which  shall
assume  all  obligations  under Shipper's  Service  Agreement  of
Shipper or Company,

                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

as the case may be, shall be entitled to the rights, and shall be
subject  to  the obligations, of its predecessor under  Shipper's
Service  Agreement. Either party to a Shipper's Service Agreement
may  pledge  or  charge  the same under  the  provisions  of  any
mortgage, deed of trust, indenture, security agreement or similar
instrument  which  it  has  executed,  or  assign  such   Service
Agreement to any affiliated Person (which for such purpose  shall
mean  any person which controls, is under common control with  or
is controlled by such party). Nothing contained in this Article 9
shall,  however, operate to release predecessor Shipper from  its
obligation under its Service Agreement unless Company  shall,  in
its sole discretion, consent in writing to such release, which it
shall  not do unless it concludes that, on the basis of the facts
available to it. such release is not likely to have a substantial
adverse  effect  upon  other Shippers or other  Persons  who  may
become  liable to provide funds to Company to enable it  to  meet
any  of  its  obligations. Company shall not release any  Shipper
from  its  obligations  under its Service Agreement  without  the
written consent of the other Shippers unless: (a) such release is
effected  pursuant  to  an  assignment  of  obligations  by  such
Shipper,  and  the  assumption  obligations  being  assigned  and
assumed  no more conditional and no less absolute than  those  at
the time provided therein; and (b) such release is not likely  to
have  a  substantial  adverse effect upon Company  or  the  other
Shippers.  For  the  purposes hereof, and  without  limiting  the
generality of the foregoing, any release of any Shipper from  its
obligations under its Service Agreement shall be deemed likely to
have  a  substantial  adverse effect upon Company  or  the  other
Shippers  if  the  assignee  of such  obligations  has  a  credit
standing  which is not at least equal to the credit  standing  of
the  assignor of such obligations (credit standings in each  case
as  reflected  by the ratings on outstanding debt  securities  by
Moody's  Investors  Service, Standard and Poor's  Corporation  or
another  rating service acceptable to all Shippers to the  extent
available  or  by other appropriate objective measures).  Shipper
shall,  at Company's request, execute such instruments  and  take
such  other action as may be desirable to give effect to any such
assignment  of  Company's  rights under  such  Shipper's  Service
Agreement  or  to give effect to the right of a Person  whom  the
Company has specified pursuant to Section 6 of the General  Terms
and Conditions of Company's FERC Gas Tariff as the Person to whom
payment  of amounts invoiced by Company shall be made;  provided,
however,  that: (a) Shipper shall not be required to execute  any
such  instruments  or take any such other action  the  effect  of
which  is  to  modify  the respective rights and  obligations  of
either  Shipper or Company under this Service Agreement; and  (b)
Shipper shall be under no obligation at any time to determine the
status or amount of any payments which may be due from Company to
any  Person  whom  the  Company has specified  pursuant  to  said
Section  6  as the Person to whom payment of amounts invoiced  by
Company shall be made.



                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT

Article 10 - Loss of Governmental Authority, Gas Supply,
Transportation or Market

Except  as  provided  in Article 7, without  limiting  its  other
responsibilities  and obligations under this  Service  Agreement,
the Shipper acknowledges that it is responsible for obtaining and
assumes  the  risk  of  loss of the following:  (1)  gas  removal
permits,  (2)  export and import licenses, (3)  gas  supply,  (4)
markets  and  (5) transportation upstream and downstream  of  the
Company's pipeline system. Notwithstanding the 1oss of one of the
items  enumerated above, Shipper shall continue to be liable  for
payment  to the Company of the transportation charges as provided
for in this Service Agreement.

Article 11 - Other Operating Provisions

(This  Article  to  be utilized when necessary to  specify  other
operating provisions.)

Article 12 - Exhibit A of Service Agreement, Rate Schedules and
          General Terms and Conditions

Company's Rate Schedules and General Terms and Conditions,  which
are on file with the Federal Energy Regulatory Commission and  in
effect,  and Exhibit A hereto are all applicable to this  Service
Agreement  and are hereby incorporated in, and made  a  part  of,
this  Service  Agreement.  In  the  event  that  the  terms   and
conditions  herein  are in conflict with the  General  Terms  and
Conditions in Company's FERC Gas Tariff, the terms and conditions
of this Service Agreement are controlling.

IN WITNESS WHEREOF, the parties hereto have caused this Service
Agreement to be duly executed as of the day and year first set
forth above.

ATTEST:                       NORTHERN BORDER PIPELINE COMPANY
                              By:  Northern Plains Natural Gas
Company,
                                   Operator

______________________________     By:______________________________
Assistant Secretary
                                   Title: Vice President
                                   
ATTEST:                       PEOPLES ENERGY SERVICES CORPORATION

______________________________    By:  /s/ Michael Rumman
                                   
                                  Title: President
                                   
                                  
 
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
          EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT

Company:            Northern Border Pipeline Company

Company's Address:  1111 South 103rd Street
                    Omaha, Nebraska 68124-1000

Shipper:            Peoples Energy Services Corporation
                    Attn.:  Ms. Lina Budnar

Shipper's Address:  Suite 1210
                    111 East Wacker Drive
                    Chicago, IL 60601
<TABLE>
<CAPTION>


                                          Maximum    Minimum    Maximum           
                     Role      Maximum    Receipt   Delivery    Receipt       Minimum
                    (Notes     Quantity  Pressure   Pressure  Temperature   Temperature
Points             1 and 3)   (MCF/Day)   (PSIG)     (PSIG)       (F)          (F)
<S>                   <S>       <C>        <C>         <C>         <C>           <C>
                                                                                   
Hebron, ND            PR        47,000     1435         -           120           32
                      RD        47,000       -          -            -             -
                      TP        47,000       -          -            -             -
                      PD        30,000       -         725           -             -
                      DD        30,000       -          -            -             -
                                                                                   
Glen Ullin, ND        PR        47,000     1435         -           120           32
(Secondary-Note 2)    RD        47,000       -          -            -             -
                      TP        47,000       -          -            -             -
                      PD        47,000       -         725           -            32
                      DD        47,000       -          -            -             -
                                                                                   
Liston, SD            RD           770       -          -            -             -
(Secondary-Note 2)    TP        47,000       -          -            -             -
                      PD           770       -         700           -            32
                      DD           770       -          -            -             -
                                                                                   
Mina, SD              RD         4,500       -          -            -             -
(Secondary-Note2)     TP        47,000       -          -            -             -
                      PD         4,500       -         750           -            32
                      DD         4,500       -          -            -             -
                                                                                   
Warner, SD            RD        24,000       -          -            -             -
(Secondary-Note2)     TP        47,000       -          -            -             -
                      PD        24,000       -        1,000          -            32
                      DD        24,000       -          -            -             -

                                
</TABLE>
                                

                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
                                
                                
                                
    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)

<TABLE>
<CAPTION>
                                
                                   Maximum   Minimum    Maximum          
               Role     Maximum    Receipt   Delivery   Receipt      Minimum
              (Notes    Quantity   Pressure  Pressure Temperature  Temperature
Points       1 and 3)  (MCF/Day)    (PSIG)    (PSIG)     (F)          (F)
<S>             <S>      <C>         <C>      <C>        <C>         <C>     
                                                                       
Warner, SD      RD       24,000      -         -         -            -
(Secondary-     TP       47,000      -         -         -            -
Note 2)
                PD       24,000      -       1,000       -            32
                DD       24,000      -         -         -            -
                                                                       
Aberdeen, SD    RD       35,000      -         -         -            -
(Secondary-     TP       47,000      -         -         -            -
Note 2)
                PD       35,000      -        800        -            32
                DD       35,000      -         -         -            -
                                                                       
Webster, SD     RD        5,000      -         -         -            -
Secondary-      TP       47,000      -         -         -            -
Note 2)
                PD        5,000      -        700        -            32
                DD        5,000      -         -         -            -
                                                                       
Milbank, SD     RD        8,073      -         -         -            -
Secondary-      TP       47,000      -         -         -            -
Note 2)
                PD        8,073      -        800        -            32
                DD        8,073      -         -         -            -
                                                                       
Ivanhoe, MN     RD        1,791      -         -         -            -
Secondary-      TP       47,000      -         -         -            -
Note 2)
                PD        1,791      -        700        -            32
                DD        1,791      -         -         -            -
                                                                       
Balaton, MN     RD       20,000      -         -         -            -
Secondary-      TP       47,000      -         -         -            -
Note 2)
                PD       20,000      -        720        -            32
                DD       20,000      -         -         -            -
                                                                       
                                
</TABLE>
                                
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
                                
                                
<TABLE>
<CAPTION>
                                
    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)
                                
                                     Maximum  Minimum     Maximum         
                Role      Maximum    Receipt  Delivery    Receipt      Minimum
               (Notes     Quantity  Pressure  Pressure  Temperature  Temperature
Points        1 and 3)   (MCF/Day)   (PSIG)    (PSIG)      (F)         (F)
<S>              <C>       <C>        <C>       <C>        <C>          <C>   
                                                                        
Marshall, MN     RD        47,000     -         -          -            -
Secondary-       TP        47,000     -         -          -            -
Note 2)
                 PD        47,000     -        800         -           32
                 DD        47,000     -         -          -            -
                                                                        
Westbrook, MN    RD         2,500     -         -          -            -
Secondary-       TP        47,000     -         -          -            -
Note 2)
                 PD         2,500     -        800         -           32
                 DD         2,500     -         -          -            -
                                                                        
Windom, MN       RD        10,000     -         -          -            -
(Secondary-      TP        47,000     -         -          -            -
Note 2)
                 PD        10,000     -        800         -           32
                 DD        10,000     -         -          -            -
                                                                        
Welcome, MN      RD        47,000     -         -          -            -
(Secondary-      TP        47,000     -         -          -            -
Note 2)
                 PD        47,000     -        796         -           32
                 DD        47,000     -         -          -            -
                                                                        
Ledyard, IA      RD         4,000     -         -          -            -
(Secondary-      TP        47,000     -         -          -            -
Note 2)
                 PD         4,000     -        800         -           32
                 DD         4,000     -         -          -            -
                                                                        
Ventura, IA      RD        47,000     -         -          -            -
(Secondary-      TP        47,000     -         -          -            -
Note 2)
                 PD        47,000     -        820         -           32
                 DD        47,000     -         -          -            -
                                                                        
Grundy           RD        47,000     -         -          -            -
Center, IA
(Secondary-      TP        47,000     -         -          -            -
Note 2)
                 PD        47,000     -        800         -           32
                 DD        47,000     -         -          -            -
                                
</TABLE>
                                
                                
                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
<TABLE>
<CAPTION>
         
                       
    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)
                                
                                   Maximum   Minimum    Maximum          
               Role     Maximum    Receipt   Delivery   Receipt      Minimum
              (Notes    Quantity   Pressure  Pressure Temperature  Temperature
Points       1 and 3)  (MCF/Day)    (PSIG)    (PSIG)     (F)          (F)
<S>             <C>      <C>         <C>       <C>       <C>         <C>
                                                                       
Beaman, IA      RD        5,100      -         -         -            -
(Secondary-     TP       47,000      -         -         -            -
Note 2)
                PD        5,100      -        839        -            32
                DD        5,100      -         -         -            -
                                                                       
Tama, IA        RD          880      -         -         -            -
(Secondary-     TP       47,000      -         -         -            -
Note 2)
                PD          880      -        816        -            32
                DD          880      -         -         -            -
                                                                       
Amana, IA       RD       16,350      -         -         -            -
(Secondary-     TP       47,000      -         -         -            -
Note 2)
                PD       16,350      -        783        -            -
                DD       16,350      -         -         -            -
                                                                       
Harper, IA      RD       47,000      -         -         -            -
                TP       47,000      -         -         -            -
                PD       47,000      -        712        -            32
                DD       47,000      -         -         -            -
                                                                       

Total Maximum
Receipt Quantity 47,000 MCF

</TABLE>

Note 1:   The point role will be either PR for physical receipts,
          RD for receipt by displacement, TP for transfer points,
          PD for physical deliveries, and DD for delivery by
          displacement.

Note 2:   Should nominations at secondary receipt and delivery
          points be received which exceed available capacity,
          volumes will be scheduled in accordance with Northern
          Border's nomination and scheduling procedures.



                NORTHERN BORDER PIPELINE COMPANY
                 U.S. SHIPPERS SERVICE AGREEMENT
                                
    EXHIBIT A TO U.S. SHIPPERS SERVICE AGREEMENT (continued)


Note 3:   For receipt or delivery of gas by displacement, Company
          cannot and does not have an obligation to physically
          deliver or receive gas at these points.  Volumes will
          be delivered or received at these point(s) only to the
          extent that corresponding equal or greater volumes are
          received or delivered by other parties at these points
          on the same day.  These corresponding volumes will be
          used to displace volumes nominated for delivery or
          receipt by Shipper.

Note 4:   Gas volumes which are nominated/scheduled at a sub
          primary receipt or delivery point(s) have priority over
          gas volumes of shipper utilizing such point on a
          corresponding basis as a secondary receipt or delivery
          point.  Shipper's rights and obligations regarding the
          use of sub primary points are governed by Subsection
          17.1 of the General Terms and Conditions of the Tariff.

This Exhibit A is made and entered into as of August 1, 1997.  On
the effective date designed by the Federal Energy Regulatory
Commission, it shall supersede the Exhibit A dated as of
__________.

The effective date of this Exhibit A is ____________________.


ATTEST:                       NORTHERN BORDER PIPELINE COMPANY
                              By: Northern Plains Natural Gas Company,
                                 Operator

______________________________     By:______________________________
Assistant Secretary
                              Title: Vice President
                                   
ATTEST:                       PEOPLES ENERGY SERVICES CORPORATION

______________________________    By: /s/ Michael Rumman
                                   
                              Title: President