SECOND AMENDMENT TO CREDIT AGREEMENT


     This  SECOND  AMENDMENT  TO  CREDIT  AGREEMENT  is made  and  entered  into
effective as of the 31st day of December,  1997 (this  "Amendment") among KINDER
MORGAN,  INC., a corporation formed under the laws of the State of Delaware (the
"Borrower");  each of the  lenders  that is or  becomes  a party  to the  Credit
Agreement  (defined  below)  (individually,  together  with its  successors  and
assigns, a "Lender" and, collectively,  the "Lenders"); and FIRST UNION NATIONAL
BANK (formerly known as First Union National Bank of North Carolina), a national
banking  association (in its individual  capacity,  "First Union"), as agent for
the Lenders (in such  capacity,  together with its  successors in such capacity,
the "Agent").

                                 R E C I T A L S

     A. The  Borrower,  the Agent and the Lenders  previously  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 (as amended,  the
"Credit Agreement"),  pursuant to which the Lenders agreed to make certain loans
to and  extensions  of  credit  on  behalf  of the  Borrower  upon the terms and
conditions as provided therein.

     B. The Borrower and the Lenders now desire to make certain  amendments  and
supplements to the Credit 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 Credit Agreement.

     2. The definitions of "Agreement" and "Aggregate Facility A Commitments" in
Section 1.02 of the Credit Agreement are hereby amended to read as follows:

         "Agreement" shall mean this Credit  Agreement,  as amended by the First
     Amendment and the Second  Amendment and as the same may be further  amended
     or supplemented from time to time.

         "Aggregate  Facility A Commitments" at any time shall equal $15,000,000
     as reduced or  terminated  as  provided in  accordance  with  Section  2.03
     hereof.

     3.  Section  1.02 of the Credit  Agreement  is hereby  supplemented,  where
alphabetically appropriate, with the addition of the following definitions:

          "Kinder  Morgan  Operating C" shall mean Kinder Morgan  Operating L.P.
     "C", a Delaware limited partnership.


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         "Operating  Partnerships"  shall mean Kinder Morgan Operating A, Kinder
     Morgan  Operating  B, Kinder  Morgan  Operating  C and any other  operating
     partnerships  (or  partnerships  created or  acquired to own  interests  in
     operating  partnerships) hereafter established or acquired by Kinder Morgan
     Energy.

         "Second  Amendment"  shall mean that certain Second Amendment to Credit
     Agreement dated  effective as of December 31, 1997 among the Borrower,  the
     Agent and the Lenders.

     4. Section 7.02 of the Credit  Agreement is hereby  amended by deleting the
last  sentence  of the  existing  subsection  (b) and adding the  following  new
sentence:

         "Except as reflected in such balance  sheets,  as of the Closing  Date,
     Kinder  Morgan  G.P.  has  no  material   Debt,   contingent   liabilities,
     liabilities  for  taxes,  unusual  forward  or  long-term   commitments  or
     unrealized or anticipated losses from any unfavorable commitments."

     5. Section 7.10 of the Credit  Agreement is hereby  amended by deleting the
existing subsection (a) and adding the following new subsection (a):

         "(a) Except as set out in Schedule  7.10,  each of the Borrower and its
     Subsidiaries has good and defensible title to its material (individually or
     in the aggregate) Properties. Such Properties (other than the Properties of
     Kinder Morgan Energy and its  Subsidiaries) are free and clear of all Liens
     except Liens permitted by Section 9.02."

     6. Section 7.14 of the Credit  Agreement is hereby  amended and restated in
its entirety as follows:

          "Section 7.14  Subsidiaries.  Except (i) as set forth on Schedule 7.14
     and (ii) for Kinder Morgan Energy and its Subsidiaries, the Borrower has no
     Subsidiaries."

     7. Section 7.15 of the Credit  Agreement is hereby  amended by deleting the
last sentence of the existing section and adding the following new sentence:

         "The  principal  place of business and chief  executive  office of each
     Subsidiary  (other  than Kinder  Morgan  Energy and its  Subsidiaries)  are
     located at the chief executive office of the Borrower."

     8. Section 7.19 of the Credit Agreement is amended as follows:

          (a) The  first  sentence  is  hereby  deleted  and  replaced  with the
     following new sentence:

         "Schedule  7.19 attached  hereto  contains,  as of the Closing Date, an
     accurate  and  complete  description  of all  material  policies  of  fire,
     liability,  workmen's  


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<PAGE>

     compensation and other forms of insurance owned or held by the Borrower and
     each Subsidiary."

          (b) The  fourth  sentence  is hereby  deleted  and  replaced  with the
     following new sentence:

         "Schedule 7.19 identifies,  as of the Closing Date, all material risks,
     if any, which the Borrower and its  Subsidiaries and their respective Board
     of Directors or officers have designated as being self insured."

     9. Section 9.01 of the Credit  Agreement is hereby  amended by deleting the
existing subsection (g) and adding the following new subsection (g):

          "(g) Debt of Kinder  Morgan  G.P.  arising  by  operation  of law as a
     result of Kinder  Morgan G.P.  being the general  partner of Kinder  Morgan
     Energy, any of the Operating Partnerships or any other partnership of which
     it is a partner; and "

     10. Section 9.03 of the Credit  Agreement is hereby amended by deleting the
existing subsection (h) and adding the following new subsection (h):

         "(h) Kinder Morgan G.P. may make capital  contributions  as required by
     the  partnership   agreements  of  Kinder  Morgan  Energy,   the  Operating
     Partnerships and any other  partnership of which it is a partner;  provided
     that its direct ownership  interest in each such partnership is not greater
     than 1.2%."

     11.  Section  9.17 of the  Credit  Agreement  is hereby  amended to read as
follows:

         "Section 9.17  Transactions  with Affiliates.  Neither the Borrower nor
     any  Subsidiary  will  enter  into  any  transaction,   including,  without
     limitation,  any  purchase,  sale,  lease or  exchange  of  Property or the
     rendering of any service,  with any Affiliate unless such  transactions are
     otherwise  permitted  under this  Agreement and are on fair and  reasonable
     terms to it."

     12.  Section  9.18 of the  Credit  Agreement  is hereby  amended to read as
follows:

          "Section  9.18  Subsidiaries.  The  Borrower  shall not, and shall not
     permit Kinder Morgan G.P. to, create any additional Subsidiaries except for
     Subsidiaries with the following  characteristics:  (i) the Subsidiaries are
     Subsidiaries of Kinder Morgan Energy, (ii) the Borrower is not a partner or
     member of such Subsidiary,  and (iii) if Kinder Morgan G.P. is a partner or
     member of such Subsidiary its direct ownership  interest is no greater than
     1.2%.  The Borrower  shall not and shall not permit  Kinder  Morgan G.P. to
     issue any stock or  ownership  interest of a Subsidiary  (excluding  Kinder
     Morgan Energy and its Subsidiaries) except to the Borrower or Kinder Morgan
     G.P."


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<PAGE>

     13. Section 10.01 of the Credit Agreement is hereby amended by deleting the
existing subsection (h) and adding the following new subsection (h):

         "(h) a  judgment  or  judgments  for the  payment of money in excess of
     $150,000  (or  $2,500,000  in the  case  of  Kinder  Morgan  Energy  or its
     Subsidiaries  or Operating  Partnerships)  in the  aggregate not covered by
     insurance  shall  be  rendered  by a  court  against  the  Borrower  or any
     Subsidiary and the same shall not be discharged (or provision  shall not be
     made for such  discharge),  or a stay of  execution  thereof  shall  not be
     procured,  within  thirty (30) days from the date of entry  thereof and the
     Borrower or such  Subsidiary  shall not,  within said period of 30 days, or
     such  longer  period  during  which  execution  of the same shall have been
     stayed, appeal therefor and cause the execution thereof to be stayed during
     such appeal; or"

     14. Annex I to the Credit  Agreement is hereby replaced by Annex I attached
to this Amendment.

     15. On the date of this  Amendment  the  Borrower  shall  prepay all of the
outstanding  principal on the Facility C Notes,  together with accrued  interest
thereon and any compensation  required by Section 5.05 of the Credit  Agreement,
and the Facility C Commitment shall be canceled.

     16. On the date of this Amendment Facility B shall be cancelled.

     17. This Amendment shall become binding on the Lenders when, and only when,
the Agent  shall  have  received  each of the  following  in form and  substance
satisfactory to the Agent or its counsel:

          (a) counterparts of this Amendment executed by the Borrower, the Agent
     and the Lenders;

          (b) counterparts of amendments to the Security Instruments executed by
     the Borrower and Kinder Morgan G.P.;

          (c) a certificate  of the Secretary or an Assistant  Secretary of each
     of the Borrower and Kinder  Morgan G.P.  setting forth  resolutions  of its
     board of  directors  with respect to the  authorization  of the Borrower or
     Kinder Morgan G.P. to execute,  deliver and perform this  Amendment and the
     amendments to the Security Instruments to which it is a party; and

         (d) such other documents as it or its counsel may reasonably request.

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


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<PAGE>


    19. The Borrower  hereby  reaffirms that as of the date of this  Amendment,
the  representations  and warranties  made by the Borrower in Article VII of the
Credit  Agreement  as amended  hereby are true and correct on the date hereof as
though made on and as of the date of this Amendment.

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

     21. 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.

     22.  THE  CREDIT  AGREEMENT,  THIS  AMENDMENT,  THE NOTES AND THE  SECURITY
INSTRUMENTS  REPRESENT  THE FINAL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS BETWEEN THE PARTIES.







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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.

BORROWER:                     KINDER MORGAN, INC.



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

AGENT AND LENDER:             FIRST UNION NATIONAL BANK



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





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