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                                                                    Exhibit 10.4



                            EQUITABLE RESOURCES, INC.

                 PRODUCTION LONG-TERM PERFORMANCE INCENTIVE PLAN


         EQUITABLE RESOURCES, INC. (the "Company") hereby establishes the
Equitable Resources, Inc. Production Long-Term Performance Incentive Plan (the
"Plan") for the benefit of certain executives of the Company effective as of the
18th day of January, 2001.

         WHEREAS, the Company maintains certain incentive award plans, including
the Equitable Resources, Inc. 1999 Long-Term Incentive Plan, pursuant to which
stock-based incentive awards are granted to selected executive employees; and

         WHEREAS, in order to further align the interests of the persons
primarily responsible for the success of the Company with the interests of the
shareholders, the Company desires to provide additional long term incentive
benefits through the Plan.

         NOW THEREFORE, the Company hereby provides for additional incentive
benefits for certain executive employees of the Company on the following terms
and conditions:

         Section 1. Eligibility. The Chief Executive Officer of the Company (the
"CEO") shall, in his sole discretion, select the executive employees of the
Production segment of the Company who shall be eligible to participate in the
Plan. The employees selected by the CEO will become participants in the Plan
(the "Participants") only upon approval by the Compensation Committee of the
Board of Directors of the Company (the "Compensation Committee").

         Section 2. Incentive Awards. Each Participant shall be awarded a number
of Company common stock units (collectively, the units are referred to herein as
the "Award") subject to the conditions provided herein, and as determined by the
Compensation Committee. The Award shall be granted to the Participant upon the
approval by the Compensation Committee on the date of the Award (the "Award
Date"), provided that the Award shall be held in escrow by the Company until
such time as the terms, conditions and restrictions applicable to the Award are
satisfied.

         Section 3. Performance Condition of the Award.

                  (a) The Award shall become payable only if:

                           (i)      The average After-Tax Margin per Unit
                                    Produced, calculated in accordance with
                                    Section 4(a), equals or exceeds the target
                                    amount set forth in Exhibit A during any
                                    consecutive six month period prior to the
                                    date specified in Section 4(b), and

                           (ii)     The After-Tax Margin per Unit Produced in
                                    each of the last three months of such six
                                    month period exceeds the target amount set
                                    forth in Exhibit A (collectively, the
                                    "Performance Condition").

                  (b) In the event of achievement of the Performance Condition,
subject to the terms of the Plan, a Participant shall be entitled to receive an
amount of cash equal to the value of the Award on the date the Performance
Condition is achieved. For this purpose, the value of each unit within an Award
shall be equal to the closing price of the Company's common stock on the NYSE
for the day on which the value of the Award is to be determined.


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         Section 4. Calculation of the Performance Measure and Forfeiture.

                  (a) The Company's Vice President and Controller for the
Production Group ("VP-Controller") shall submit on a quarterly basis, after-tax
margin per unit produced ("After-Tax Margin per Unit Produced") to the Company's
Chief Financial Officer ("CFO"), calculated as Revenue per unit minus Expenses
per unit, derived as set forth in Exhibit A. The VP-Controller will have
responsibility for calculating the After-Tax Margin per Unit Produced, subject
to the CFO's approval of both the methodology and calculation. The average
After-Tax Margin per Unit Produced for any six month period shall be equal to
the sum of the After-Tax Margin per Unit Produced for each of the months in the
period, divided by six.

                  (b) A Participant's Award shall be forfeited if the
Performance Condition is not satisfied on or before January 1, 2004.

                  (c) A Participant's Award shall be forfeited if, prior to the
satisfaction of the Performance Condition, the Participant's employment with the
Company is terminated voluntarily or involuntarily for any reason; provided,
however, that a Participant's Award shall not be forfeited if, at any time
within 24 months following a Change in Control of the Company (as defined in the
Company's Deferred Compensation Plan), the Company terminates the Participant's
employment for reasons other than for Cause (as defined in Section 11) or,
during the same period, Participant terminates employment with the Company for
Good Reason (as defined in Section 10).

         Section 5. Dividends and Adjustments. If a dividend or other
distribution shall be declared upon the Company's common stock payable in shares
of the common stock, the number of units expressed in terms of shares of the
common stock shall be adjusted by adding thereto the number of shares of the
common stock which would have been distributable thereon if such units had been
outstanding (as shares of common stock) on the date fixed for determining the
shareholders entitled to receive such stock dividend or distribution. Additional
units so distributed with respect to any units held in escrow or in the
Company's possession shall also be held by the Company in escrow or in its
possession and shall be subject to the same restrictions as are applicable to
the units on which they were distributed. If the outstanding shares of the
Company's common stock shall be changed into or exchangeable for a different
number or kind of shares of stock or other securities of the Company or another
corporation, or cash or other property, whether through reorganization,
reclassification, recapitalization, stock split-up, combination of shares,
merger or consolidation, then there shall be substituted for each unit expressed
in terms of shares of the common stock, the number and kind of replacement
units, expressed in shares of stock or other securities or cash or other
property into which each outstanding share of the common stock shall be so
changed or for which each such share shall be exchangeable. Upon such event, the
value of the units constituting the Award shall equal the closing price of such
common stock on the principal market on which such common stock is traded and
the Award shall continue to be subject to the terms of the Plan. Unless
otherwise determined by the Committee in its discretion, any such replacement
units, into or for which the units held in escrow or in the Company's possession
shall be changed or exchangeable in any such transaction shall also be held by
the Company in escrow or in its possession and shall be subject to the same
restrictions as are applicable to the units in respect of which such replacement
units were issued or distributed.

         Section 6. Distribution. Upon notification from the Company of
participation in the Plan, each Participant must make a written election as to
the time and form in which his or her Award will be paid as provided in this
Section 6. This election must be made on or before February 1, 2001, for those
individuals who are Participants on the effective date of the Plan, or not more
than thirty (30) days after the date of becoming a Participant, in the case of
other individuals.


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                  (a) A Participant may elect to have the payment of his or her
Award deferred and paid in such form as provided in accordance with the
Company's Deferred Compensation Plan; provided, however, that no payment shall
be made pursuant to the Award prior to achievement of the Performance Condition.
The Participant's election as to when payment of the Award will commence shall
be irrevocable.

                  (b) If a Participant has elected to receive payment of his or
her Award, or any portion thereof, at a time later than the date when the
Performance Condition is achieved, then the units comprising the Award, to the
extent unpaid, shall be credited to and maintained in accordance with the terms
of the Company's Deferred Compensation Plan as then in effect. Participant shall
be subject to the terms of that plan, as then in effect, with respect to such
deferred amount and the allocation of deferred amounts.

                  (c) Notwithstanding any election by a Participant to receive
the payment of his or her Award at a specified date on which he or she is still
employed by the Company, the Award shall be paid to the Participant in such case
only to the extent that the deductibility of such payment to the Company is not
limited by reason of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). In the event that the payment of all or a part of the
Award exceeds the Code Section 162(m) limit, the amount in excess of the limit
shall be considered a required deferral and be credited to the Company's
Deferred Compensation Plan as described in Section 6(b) and payment shall
automatically be deferred to the next subsequent year in which it can be paid to
the Participant without exceeding the Code Section 162(m) limit.

                  (d) Subject to Section 6(c), a Participant's Award under this
Plan shall be paid to the Participant within sixty (60) days following
determination by the Company of achievement of the Performance Condition or, if
deferred, upon the date or dates specified in the Company's Deferred
Compensation Plan. The Participant shall receive payment for all Awards in cash
and shall have no right to receive any distribution of Company stock.

                  (e) In the event of the Participant's death, any vested
payments otherwise due to the Participant shall be paid to the Participant's
beneficiary, as listed on the most recent election form which is delivered to
the Company, upon the date or dates specified in the Company's Deferred
Compensation Plan.

         Section 7. Nature of Plan. The Plan constitutes a mere promise by the
Company to make benefit payments in the future. The Company's obligations under
the Plan shall be unfunded and unsecured promises to pay. The Company shall not
be obligated under any circumstance to fund its financial obligations under the
Plan. The Company may, in its discretion, set aside funds in a trust or other
vehicle, subject to the claims of its creditors, in order to assist it in
meeting its obligations under the Plan, if such arrangement will not cause the
Plan to be considered a funded deferred compensation plan. To the extent that
any Participant or beneficiary or other person acquires a right to receive
payments under the Plan, such right shall be no greater than the right, and each
Participant and beneficiary shall at all times have the status, of a general
unsecured creditor of the Company.

         Section 8. Nonassignment. A Participant shall have no right to sell,
exchange, transfer, pledge, assign or otherwise alienate or hypothecate
(collectively, "Transfer") an Award in any manner, including any Transfer for
cash, stock or any other benefit, and any attempt to do so shall be void.

         Section 9. Change in Control. Upon a Change in Control, as then defined
in the Company's Deferred Compensation Plan, the value of all of the outstanding
Awards granted to Participants pursuant to the Plan on the date of the Change in
Control, assuming that (i) the Performance Condition for all such Awards is
achieved as of the date of the Change in Control,


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and (ii) all Awards are payable as of the date of the Change in Control, based
upon the closing price of the Company's common stock on the NYSE on that day,
shall be credited to the Company's Deferred Compensation Plan solely for
purposes of determining the amount of funding required of any trust created
pursuant to the terms of such plan; provided, however, that no payment shall be
made pursuant to any Award under this Plan, the Company's Deferred Compensation
Plan or any trust created thereunder, prior to achievement of the Performance
Condition.

         Section 10. Good Reason for Termination. Solely for purposes of the
forfeiture provision of Section 4(c), a Participant shall have terminated
employment with the Company for "Good Reason" if any one of the following occurs
following a Change in Control:

                  (a) The removal of the Participant from the position he or she
held immediately prior to the Change in Control (other than by reason of death,
disability or for Cause);

                  (b) The assignment to the Participant of any duties materially
and adversely inconsistent with those performed by the Participant immediately
prior to the Change in Control or a substantial alteration in the nature or
status of the Participant's responsibilities, either of which renders the
Participant's position to be of less dignity, responsibility or scope;

                  (c) A reduction by the Company in the Participant's level of
overall compensation (including annual incentive opportunity at target award
levels) as in effect on the effective date of this Plan or as the same may be
increased from time to time, except for proportional across-the-board reductions
similarly affecting all executives of the Company and all executives of any
person in control of the Company; provided, however, that the exception for
across-the-board reductions shall not apply in the event the Participant's
annual base salary is reduced by an amount equal to ten percent or more of the
Participant's annual base salary, as of the end of the calendar year immediately
preceding the year in which the Change in Control occurs, without the
Participant's consent;

                  (d) The failure to grant the Participant an annual salary
increase necessary to maintain such salary as reasonably comparable to the
salaries of senior executives holding positions equivalent to the Participant's
in the industry in which the Company's then principal business activity is
conducted;

                  (e) The Company requiring the Participant to be based anywhere
other than the Company's principal executive offices in the city in which the
Participant is principally located immediately prior to the Change in Control,
except for required travel on the Company's business to an extent substantially
consistent with the Participant's business travel obligations immediately prior
to the Change in Control; or

                  (f) Any material reduction by the Company of the benefits
enjoyed by the Participant under any of the Company's pension, retirement,
profit sharing, savings, life insurance, medical, health and accident,
disability or other employee benefit plans, programs or arrangements; the taking
of any action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Participant of any material fringe
benefits or perquisites; or the failure by the Company to provide the
Participant with the number of paid vacation days to which he is entitled on the
basis of years of service with the Company in accordance with the Company's
normal vacation policy, provided that this paragraph (f) shall not apply to any
proportional across-the-board reduction or action similarly affecting all
executives of the Company and all executives of any person in control of the
Company.


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         Section 11. Termination of Participant for Cause. Solely for purposes
of the forfeiture provision of Section 4(c), a Participant shall have a
termination of employment from the Company for "Cause" upon:

                  (a) The willful and continued failure by the Participant to
substantially perform his duties with the Company (other than (i) any such
failure resulting from the Participant's disability, or (ii) any such actual or
anticipated failure resulting from the Participant's termination of his
employment for Good Reason), after a written demand for substantial performance
is delivered to the Participant by the CEO of the Company which specifically
identifies the manner in which the CEO believes that the Participant has not
substantially performed his duties and which failure has not been cured within
thirty days after such written demand; or

                  (b) The willful and continued engaging by the Participant in
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise.

         For purposes of this Section 11, no act, or failure to act on the
Participant's part shall be considered "willful" unless done, or omitted to be
done, by the Participant in bad faith and without reasonable belief that such
action or omission was in the best interest of the Company. Notwithstanding the
foregoing, the Participant shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board of Directors at a meeting of the Board of
Directors called and held for that purpose (after reasonable notice to the
Participant and an opportunity for the Participant, together with his counsel,
to be heard before the Board of Directors) finding that in the good faith
opinion of the Board of Directors the Participant is guilty of the conduct set
forth above and specifying the particulars thereof in detail.

         Section 12. Successors. The obligation of the Company under the Plan
shall be binding upon the successors and assigns of the Company.

         Section 13. Dispute Resolution. The Participant may make a claim to the
Compensation Committee with regard to a payment of benefits provided herein. If
the Compensation Committee receives a claim in writing, the Compensation
Committee must advise the Participant of its decision on the claim in writing in
a reasonable period of time after receipt of the claim, not to exceed 120 days.
The notice shall set forth the following information:

                  (a)      The specific basis for its decision;

                  (b)      Specific reference to pertinent Plan provisions on
                           which the decision is based;

                  (c)      A description of any additional material or
                           information necessary for the Participant to perfect
                           a claim and an explanation of why such material or
                           information is necessary; and

                  (d)      An explanation of the Plan's claim review procedure.

If the Participant does not receive a notice of decision within 120 days after
receipt of the claim, the claim will be deemed to have been denied. The
Participant may request a review of a decision (or deemed denial) by filing with
the Compensation Committee a written request for such review. The request must
be filed within 60 days after the notice of decision is received, or within 60
days after the denial is deemed to have occurred. The Participant may review
pertinent documents and submit issues and comments in writing within the same
60-day period. If a


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request for review is filed, such review shall be made by the Compensation
Committee within 120 days after receipt of such request. Upon completion of the
review, the Participant shall be given written notice of the decision resulting
from such review, which notice shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision
is based.

         In the event that the Participant continues to disagree with the
decision of the Compensation Committee, the Participant may seek to resolve the
dispute by referring the matter to an impartial arbitrator who shall be selected
from a list of names provided by the Federal Mediation and Conciliation Service
in Washington DC, provided that the costs for such proceeding shall be borne by
the party determined by the arbitrator.

         Section 14. Impact on Benefit Plans. Payments made under this Plan will
not be considered as earnings for purposes of the Company's Deferred
Compensation Plan.

         Section 15. No Contract of Employment. Neither the Plan nor any Award
shall be construed as a contract of employment for the Participant during the
term of this Plan or as a limitation on the right of the Company to discharge
any Participant with or without Cause.

         Section 16. Applicable Law. This Plan shall be governed by and
construed under the laws of the Commonwealth of Pennsylvania without regard to
its conflict of law provisions.

         Section 17. Severability. In the event that any one or more of the
provisions of this Plan shall be held to be invalid, illegal or unenforceable,
the validity, legality or enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

         Section 18. Headings. The descriptive headings of the Sections of this
Plan are inserted for convenience of reference only and shall not constitute a
part of this Plan.

         Section 19. Amendment and Termination. This Plan may be amended by the
Company, in its sole discretion at any time by a written action authorized by
the Compensation Committee, except that no amendment shall adversely affect a
Participant's rights to an Award after the Award Date and no amendment may be
made following a Change in Control, as defined in the Company's Deferred
Compensation Plan. This Plan shall terminate upon the earlier of the
satisfaction of the Performance Condition or January 1, 2004.




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