EXHIBIT 10(c)	
                                        SERVICE PACKAGE NO.19399
                                             AGREEMENT NO.   0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)

THIS  AGREEMENT  is made and entered into as of the  1st  day  of
November, 1997, by and between TENNESSEE GAS PIPELINE COMPANY,  a
Delaware  Corporation, hereinafter referred to  as  "Transporter"
PEOPLES  GAS LIGHT & COKE CO, a ILLINOIS Corporation, hereinafter
referred  to  as  "Shipper."     Transporter  and  Shipper  shall
collectively be referred to herein as the "Parties."

                            ARTICLE I
                                
                           DEFINITIONS
                                
1.1  TRANSPORTATION QUANTITY (TQ) - shall mean the maximum  daily
     quantity  of  gas which Transporter agrees  to  receive  and
     transport on a firm basis, subject to Article II herein, for
     the  account  of Shipper hereunder on each day  during  each
     year   during  the  term  hereof,  which  shall  be   53,950
     dekatherms.     Any  limitations of  the  quantities  to  be
     received from each Point of Receipt and/or delivered to each
     Point  of  Delivery  shall be as specified  on  Exhibit  "A"
     attached hereto.

1.2  EQUIVALENT QUANTITY - shall be as defined in Article I of
     the General Terms and Conditions of Transporter's FERC Gas
     Tariff.

                           ARTICLE II
                                
                         TRANSPORTATION
                                
Transportation Service - Transporter agrees to accept and receive
daily on a firm basis, at the Point(s) of Receipt from Shipper or
for  Shipper's  account such quantity of  gas  as  Shipper  makes
available up to the Transportation Quantity, and to deliver to or
for  the  account  of  Shipper to the  Point(s)  of  Delivery  an
Equivalent Quantity of gas.

                           ARTICLE III

                POINT(S) OF RECEIPT AND DELIVERY

The  Primary  Point(s)  of Receipt and Delivery  shall  be  those
points specified on Exhibit "A" attached hereto.

                           ARTICLE IV

All facilities are in place to render the service provided for in
this Agreement.

                                        SERVICE PACKAGE NO.19399
                                             AGREEMENT NO.   0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)
                                

                            ARTICLE V

      QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENT

For  all  gas  received, transported and delivered hereunder  the
Parties  agree  to the Quality Specifications and  Standards  for
Measurement  as specified in the General Terms and Conditions  of
Transporter's FERC Gas Tariff Volume No. 1. To the extent that no
new  measurement  facilities  are installed  to  provide  service
hereunder, measurement operations will continue in the manner  in
which  they have previously been handled. In the event that  such
facilities  are  not  operated  by Transporter  or  a  downstream
pipeline,  then responsibility for operations shall be deemed  to
be Shipper's.

                           ARTICLE VI

            RATES AND CHARGES FOR GAS TRANSPORTATION

6.1  TRANSPORTATION  RATES - Commencing upon the  effective  date
     hereof,  the rates, charges, and surcharges to  be  paid  by
     Shipper   to  Transporter  for  the  transportation  service
     provided  herein  shall be in accordance with  Transporter's
     Rate  Schedule FT-A and the General Terms and Conditions  of
     Transporter's FERC Gas Tariff.

6.2  INCIDENTAL CHARGES - Shipper agrees to reimburse Transporter
     for  any  filing  or  similar  fees,  which  have  not  been
     previously paid for by Shipper, which Transporter incurs  in
     rendering service hereunder.

6.3  CHANGES   IN  RATES  AND  CHARGES  -  Shipper  agrees   that
     Transporter shall have the unilateral right to file with the
     appropriate regulatory authority and make effective  changes
     in  (a) the rates and charges applicable to service pursuant
     to   Transporter's  Rate  Schedule  FT-A,   (b)   the   rate
     schedule(s) pursuant to which service hereunder is rendered,
     or  (c)  any  provision of the General Terms and  Conditions
     applicable to those rate schedules. Transporter agrees  that
     Shipper  may protest or contest the aforementioned  filings,
     or  may  seek authorization from duly constituted regulatory
     authorities  for  such adjustment of Transporter's  existing
     FERC  Gas  Tariff  as  may  be  found  necessary  to  assure
     Transporter just and reasonable rates.

                           ARTICLE VII

                      BILLINGS AND PAYMENTS

Transporter  shall  bill  and Shipper shall  pay  all  rates  and
charges  in  accordance with Articles V and VI, respectively,  of
the  General  Terms  and  Conditions of  Transporter's  FERC  Gas
Tariff.

                                       SERVICE PACKAGE NO.19399
                                             AGREEMENT NO.   0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)

                          ARTICLE VIII

                  GENERAL TERMS AND CONDITIONS

This  Agreement shall be subject to the effective  provisions  of
Transporter's  Rate Schedule FT-A and to the  General  Terms  and
Conditions  incorporated therein, as the same may be  changed  or
superseded  from time to time in accordance with  the  rules  and
regulations of the FERC.

                           ARTICLE IX
                                
                           REGULATION

9.1  This Agreement shall be subject to all applicable and lawful
     governmental statutes, orders, rules and regulations and  is
     contingent  upon  the  receipt  and  continuation   of   all
     necessary regulatory approvals or authorizations upon  terms
     acceptable to Transporter. This Agreement shall be void  and
     of  no force and effect if any necessary regulatory approval
     is  not  so obtained or continued. All Parties hereto  shall
     cooperate  to obtain or continue all necessary approvals  or
     authorizations, but no Party shall be liable  to  any  other
     Party  for  failure to obtain or continue such approvals  or
     authorizations.

9.2  The   transportation  service  described  herein  shall   be
     provided  subject  to  Subpart G,  Part  284,  of  the  FERC
     Regulations.

                            ARTICLE X

              RESPONSIBILITY DURING TRANSPORTATION

Except  as  herein specified, the responsibility for  gas  during
transportation  shall  be  as stated in  the  General  Terms  and
Conditions of Transporter's FERC Gas Tariff Volume No. 1.

                           ARTICLE XI
                                
                           WARRANTIES

11.1 In addition to the warranties set forth in Article IX of the
     General Terms and Conditions of Transporter's FERC Gas
     Tariff, Shipper warrants the following:

   (a)  Shipper warrants that all upstream and downstream
        transportation arrangements are in place, or will be in place as
        of the requested effective date of service, and that it has
        advised the upstream and downstream transporters of the receipt
        and delivery points under this Agreement and any quantity
        limitations for each point as specified on Exhibit "A" attached
        hereto. Shipper agrees to indemnify and hold Transporter harmless
        for refusal to transport gas
   
                                         SERVICE PACKAGE NO. 19399
                                             AGREEMENT NO.   0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)
                                

      hereunder in the event any upstream or downstream
      transporter fails to receive or deliver gas as
      contemplated by this Agreement.

      (b)   Shipper  agrees  to indemnify  and  hold  Transporter
      harmless   from   all  suits,  actions,  debts,   accounts,
      damages,  costs, losses and expenses (including  reasonable
      attorneys  fees)  arising from or  out  of  breach  of  any
      warranty by Shipper herein.

11.2 Transporter  shall not be obligated to provide  or  continue
     service hereunder in the event of any breach of warranty.

                           ARTICLE XII
                                
                              TERM
                                
12.1 This  Agreement  shall be effective as of  the  1st  day  of
     November,  1997, and shall remain in force and effect  until
     the  31st  day  of  March, 1998,("Primary  Term")  and  will
     terminate on that date.

12.2 Any portions of this Agreement necessary to resolve or cash-
     out  imbalances  under this Agreement  as  required  by  the
     General Terms and Conditions of Transporter's Tariff,  shall
     survive the other parts of this Agreement until such time as
     such  balancing  has  been accomplished; provided,  however,
     that  Transporter  notifies Shipper of  such  imbalance  not
     later  than  twelve  months after the  termination  of  this
     Agreement.

12.3 This  Agreement  will terminate automatically  upon  written
     notice  from Transporter in the event Shipper fails  to  pay
     all  of  the  amount  of any bill for  service  rendered  by
     Transporter   hereunder  in  accord  with  the   terms   and
     conditions of Article VI of the General Terms and Conditions
     of Transporter's FERC Gas Tariff.

                                        SERVICE PACKAGE NO.19399
                                             AGREEMENT NO.   0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)
                                

                          ARTICLE XIII
                                
                             NOTICE

Except  as otherwise provided in the General Terms and Conditions
applicable  to  this Agreement, any notice under  this  Agreement
shall  be  in writing and mailed the post office address  of  the
Party intended to receive the same, as follows:

TRANSPORTER:   TENNESSEE GAS PIPELINE COMPANY
               P.O. Box 2511
               Houston, Texas 77252-2511

               Attention: Director, Transportation Control

SHIPPER:

NOTICES:       PEOPLES GAS LIGHT & COKE CO.
               130 East Randolph Drive
               22nd Floor
               Chicago, IL 60601-6207

               Attention: Raulando C. deLara

BILLING:       PEOPLES GAS LIGHT & COKE CO.
               130 East Randolph Drive
               22nd Floor
               Chicago, IL 60601-6207

               Attention: Raulando C deLara

or to such other address as either Party may designate by formal
written notice to the other.

                           ARTICLE XIV
                                
                           ASSIGNMENTS

14.1 Either  Party  may assign or pledge this Agreement  and  all
     rights and obligations hereunder under the provisions of any
     mortgage,  deed  of  trust, indenture, or  other  instrument
     which  it  has executed or may execute hereafter as security
     for indebtedness. Either Party, without relieving itself  of
     its  obligations  under this Agreement, assign  any  of  its
     rights  hereunder to a company with which it is  affiliated.
     Otherwise, Shipper shall not assign this Agreement or any of
     its  rights  hereunder, except in accord with  Article  III,
     Section   11   of  the  General  Terms  and  Conditions   of
     Transporter's FERC Gas Tariff.

14.2 Any  person  which  shall succeed by  purchase,  merger,  or
     consolidation  to  the  properties,  substantially   as   an
     entirety,  of either Party hereto shall be entitled  to  the
     rights  and  shall  be  subject to the  obligations  of  its
     predecessor in interest under this Agreement.

                                        SERVICE PACKAGE NO. 19399
                                             AGREEMENT NO.  0

                  GAS TRANSPORTATION AGREEMENT
               (For Use Under FT-A Rate Schedule)
                                
                           ARTICLE XV
                                
                          MISCELLANEOUS
                                
15.1 THE INTERPRETATION AND PERFORMANCE OF THIS CONTRACT SHALL BE
     IN  ACCORDANCE WITH AND CONTROLLED BY THE LAWS OF THE  STATE
     OF  TEXAS, WITHOUT REGARD TO THE DOCTRINES GOVERNING  CHOICE
     OF LAW.

15.2 If  any  provisions of this Agreement is declared  null  and
     void,  or  voidable,  by a court of competent  jurisdiction,
     then  that provision will be considered severable at  either
     Party's option; and if the severability option is exercised,
     the  remaining provisions of the Agreement shall  remain  in
     full force and effect.

15.3 Unless  otherwise  expressly provided in this  Agreement  or
     Transporter's  Gas Tariff, no modification of or  supplement
     to  the terms and provisions stated in this agreement  shall
     be or become effective until Shipper has submitted a request
     for change through the Electronic Bulletin Board and Shipper
     has  been notified through the Electronic Bulletin Board  of
     Transporter's agreement to such change.

15.4 Exhibit  "A"  attached  hereto  is  incorporated  herein  by
     reference and made a part hereof for all purposes.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
to be duly executed as of the date first hereinabove written.

     TENNESSEE GAS PIPELINE COMPANY

     By:    /s/ J. P. Dickerson
               J.P. Dickerson
             Agent and Attorney-in-Fact

     Date:      9/27/97
          
     PEOPLES GAS LIGHT & COKE CO

     By:    /s/ William E. Morrow
          
     Title:     Vice President
          
     Date:      August 25, 1997


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<CAPTION>
                          GAS TRANSPORTATION AGREEMENT
                       (For Use Under FT-A Rate Schedule)
                                        
                                   EXHIBIT "A"
                  AMENDMENT #0 TO GAS TRANSPORTATION AGREEMENT
                             DATED November 1, 1997
                                     BETWEEN
                         TENNESSEE GAS PIPELINE COMPANY
                                       AND
                           PEOPLES GAS LIGHT & COKE CO
                                        

PEOPLES GAS LIGHT & COKE CO
EFFECTIVE DATE OF AMENDMENT:  November 1, 1997
RATE SCHEDULE:  FT-A
SERVICE PACKAGE:  19399
SERVICE PACKAGE TQ:  53,950 Dth

METER METER NAME             INTERCONNECT PARTY NAME  COUNTY        ST  ZONE R/D  LEG   METER-TQ BILLABLE-TQ
<S>    <C>                    <C>                      <C>           <C> <C>  <C>  <C>    <C>      <C> 
010932 PENNZOIL-SHIP SHOAL    PENNZOIL EXPLORATION     OFFSHORE-     OL  OL   R    500    9,809    9,809
       BLK 154 E              AND PRODU                FEDERA
011127 TEXACO-EUGENE ISLAND   TEXACO EXPLORATION AND   OFFSHORE-     OL  OL   R    500    4,904    4,904
       BLK 338 A              PRODUCT                  FEDERA
011423 TEXACO-(NGP)-WEST      TEXACO EXPLORATION AND   OFFSHORE-     OL  OL   R    500    4,905    4,905
       DELTA BLK 10           PRODUCT                  FEDERA
011724 VASTOR-ATLANTIC-SOUTH  VASTAR GAS MARKETING,    OFFSHORE-     OL  OL   R    500    3,218    3,218
       PASS BLK               INC.                     FEDERA
011971 CHEVRON-SOUTH MARSH    CHEVRON USA INC          OFFSHORE-     OL  OL   R    500   11,495   11,495
       ISLAND 7                                        FEDERA
012225 WALTER - SOUTH MARSH   WALTER OIL & GAS CORP    OFFSHORE-     OL  OL   R    500    4,905    4,905
       ISLAND 36                                       FEDERA
012416 ALLAR CO #1            AMERADA HESS CORP        FORREST       MS  01   R    500   14,714   14,714

                                                                                              
                                                                         Total          53,950   53,950
                                                                         Receipt
                                                                         TQ:
                                                                                              
020852 MGT SMS (Bi 1-2447                              SUMNER        TN  01   D    999    53,950   53,950
       Dual 1-70

NUMBER OF RECEIPT POINTS AFFECTED:  7
NUMBER OF DELIVERY POINTS AFFECTED:  1

Note:  Exhibit "A" is a reflection of the contract and all amendments as of the
amendment effective date.


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