SECOND AMENDMENT TO GUARANTY AGREEMENT


         THIS SECOND  AMENDMENT  TO GUARANTY  AGREEMENT is made and entered into
effective as of the 31st day of December, 1997 (this "Amendment") between KINDER
MORGAN ENERGY PARTNERS, L.P. (formerly known as Enron Liquids Pipeline, L.P.), a
Delaware  limited  partnership  (the  "Guarantor") and FIRST UNION NATIONAL BANK
(formerly known as First Union National Bank of North  Carolina),  as agent (the
"Agent")  for the  lenders  (the  "Lenders")  that are or become  parties to the
Credit Agreement defined below.

                              W I T N E S S E T H:

         WHEREAS,  KINDER MORGAN  OPERATING  L.P. "B"  (formerly  known as Enron
Transportation Services, L.P.), a Delaware limited partnership (the "Borrower"),
the Agent and the Lenders have entered into that certain Credit  Agreement dated
as of February 14, 1997 as amended by First Amendment to Credit  Agreement dated
as of September 1, 1997 and Second  Amendment to Credit  Agreement dated of even
date herewith  (such Credit  Agreement as amended and as the same may be further
amended from time to time, herein called the "Credit Agreement"); and

         WHEREAS, Guarantor executed that certain Guaranty Agreement dated as of
February 14, 1997 as amended by First  Amendment to Guaranty  Agreement dated as
of September  26, 1997 (as amended,  the "Guaranty  Agreement")  pursuant to the
terms and conditions stated in the Credit Agreement;

         WHEREAS,  Guarantor has  requested,  and the Lenders have agreed,  that
certain changes be made to the Guaranty Agreement;

         NOW,  THEREFORE,  in  consideration  of the premises and other good and
valuable consideration and the mutual benefits,  covenants and agreements herein
expressed, the parties hereto now agree as follows:

         1. All  capitalized  terms  used in this  Amendment  and not  otherwise
defined  herein shall have the  meanings  ascribed to such terms in the Guaranty
Agreement.

         2. Section  3.3(c)(viii) of the Guaranty Agreement is hereby amended to
read as follows:

                  "(viii)  investments,  loans or advances made by the Guarantor
         in or to its Subsidiaries;  provided that immediately  before and after
         each investment,  loan or advance no Default or Event of Default exists
         and is continuing."

         3. Section  3.3(k) of the Guaranty  Agreement is hereby amended to read
as follows:

                  "(k)     Transactions   with   Affiliates. The Guarantor  will
         not  enter  into  any transaction, including,  without  limitation, any
         purchase, sale, lease or exchange


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         of Property or the rendering of any service,  with any Affiliate unless
         such  transactions are otherwise  permitted under the Credit Agreement,
         and are upon fair and reasonable terms to it."

         4. Section  3.3(l) of the Guaranty  Agreement is hereby amended to read
as follows:

                  "Section  9.18.  Partnership  Agreement.  The  Guarantor  will
         not amend or permit to be amended its partnership agreement in a manner
         materially adverse to the Lenders  without the prior written consent of
         the Majority Lenders."

         5. The parties  hereto  hereby  acknowledge  and agree that,  except as
specifically  supplemented and amended, changed or modified hereby, the Guaranty
Agreement shall remain in full force and effect in accordance with its terms.

         6. This  Amendment  shall be governed by, and  construed in  accordance
with, the laws of the State of Texas.

         7. This Amendment may be executed in two or more  counterparts,  and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart  hereof;  each counterpart shall be deemed an original,  but
all of which together shall constitute one and the same instrument.  Delivery of
an executed  signature page by facsimile  transmission  shall be as effective as
delivery of a manually executed counterpart hereof.



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         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed effective as of the date first above written.

GUARANTOR:                   KINDER MORGAN ENERGY PARTNERS, L.P.

                             By: Kinder Morgan G.P., Inc.,
                                 its General Partner



                                  By: /s/ William V. Morgan
                                  Name: William V. Morgan
                                  Title: Vice Chairman

AGENT:                       FIRST UNION NATIONAL BANK



                             By: /s/ David Roberts
                             Name: David Roberts
                             Title: Senior Vice President












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