SECOND AMENDMENT

      THIS  SECOND  AMENDMENT  to the  Credit  Agreement  referred  to below and
amendment to Section 8 of the Security Agreement (this "Second  Amendment"),  is
made and entered into as of this 8th day of September,  1998 by and among KINDER
MORGAN,  INC.,  a  corporation   organized  under  the  laws  of  Delaware  (the
"Borrower"),  the Lenders party to the Credit  Agreement (as defined  below) and
identified on the  signature  pages hereto,  and FIRST UNION  NATIONAL  BANK, as
Administrative Agent for the Lenders.


                              Statement of Purpose

      The Lenders  have  extended  certain  credit  facilities  to the  Borrower
pursuant to the Amended and Restated Credit  Agreement dated as of June 18, 1998
as amended by the First Amendment dated as of August 26, 1998 (as so amended and
as further amended,  restated,  supplemented or otherwise modified,  the "Credit
Agreement"),  by and among the  Borrower,  the  Lenders  and the  Administrative
Agent.

      The Borrower has requested that the Lenders amend the Credit Agreement to,
among other  things,  revise  certain  provisions  of the Credit  Agreement  and
Section 8 of the Security  Agreement,  and the Lenders have agreed to do so, but
only on the terms and conditions set forth below in this Second Amendment.

      NOW  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

      1.  Definitions.  All  capitalized  undefined  terms  used in this  Second
Amendment shall have the meanings assigned thereto in the Credit Agreement.

      2.   Amendments to Credit Agreement.

      (a) Section 1.1 is hereby modified to amend in its entirety the definition
of "Eligible Assignee" by inserting the following in lieu thereof:

           ""Eligible  Assignee"  means,  with respect to any  assignment of the
      rights,  interest and obligations of a Lender hereunder,  a Person that is
      at the time of such  assignment (a) a commercial  bank organized under the
      laws of the United States or any state thereof,  having  combined  capital
      and surplus in excess of  $500,000,000,  (b) a commercial  bank  organized
      under the laws of any other  country that is a member of the  Organization
      of Economic Cooperation and Development, or a political subdivision of any
      such  country,   having   combined   capital  and  surplus  in  excess  of
      $500,000,000,  (c) a finance company, insurance company or other financial
      institution  or fund (whether a corporation,  partnership,  trust or other
      entity)  which in the ordinary  course of business  extends  credit of the
      type   extended   hereunder  and  that  has  total  assets  in  excess  of
      $100,000,000, (d) already a Lender hereunder (whether as an original party
      to this  Agreement or as the assignee of another  Lender) or any Affiliate
      of a Lender, (e) the successor (whether by transfer of assets, merger


<PAGE>


      or otherwise) to all or  substantially  all of the  commercial  lending or
      private  placement  business  of the  assigning  Lender,  or (f) any other
      Person that has been  approved  in writing as an Eligible  Assignee by the
      Administrative  Agent and,  so long as no Default or Event of Default  has
      occurred and is continuing, the Borrower."

      (b) Section 5.6 of the Credit  Agreement  shall be amended in its entirety
by inserting the following in lieu thereof:

           "SECTION 5.6.  Crediting of Payments and Proceeds.  In the event that
      the  Borrower  shall fail to pay any of the  Obligations  when due and the
      Obligations have been  accelerated  pursuant to Section 12.2, all payments
      received by the Lenders upon the Notes and the other  Obligations  and all
      net proceeds  from the  enforcement  of the  Obligations  shall be applied
      first to all expenses then due and payable by the Borrower hereunder, then
      to all  indemnity  obligations  then  due  and  payable  by  the  Borrower
      hereunder,  then to all  Administrative  Agent's and Issuing Lender's fees
      then  due  and  payable,  then  to  all  commitment  and  other  fees  and
      commissions  then due and payable,  then to accrued and unpaid interest on
      the Notes, the Reimbursement  Obligation and any termination  payments due
      in respect of a Hedging  Agreement  with any Lender  (which  such  Hedging
      Agreement is permitted or required hereunder) (pro rata in accordance with
      all such  amounts  due),  then to the  principal  amount  of the Notes and
      Reimbursement  Obligation  (pro rata in  accordance  with all such amounts
      due) and then to the cash collateral  account described in Section 12.2(b)
      hereof to the  extent of any L/C  Obligations  then  outstanding,  in that
      order."

      (c) The first six lines of Section  14.10(b) of the Credit Agreement shall
be amended in their entirety by inserting the following in lieu thereof:

                "(b) Each  Lender may assign to one or more  Eligible  Assignees
      all or a portion  of its  interests,  rights  and  obligations  under this
      Agreement  (including,  without  limitation,  all  or  a  portion  of  the
      Obligations  at the time owing to it and the Notes held by it);  provided,
      that: "

      (d)  Section  14.10(g)  of the  Credit  Agreement  shall be amended in its
entirety by inserting following in lieu thereof:

                "(g)   Disclosure   of   Information;    Confidentiality.    The
      Administrative Agent and the Lenders shall hold all non-public information
      with respect to the Borrower and its Subsidiaries obtained pursuant to the
      Loan  Documents  in  accordance  with  customary  procedures  for handling
      third-party  non-public  information;  provided,  that the  Administrative
      Agent may disclose  information  relating to this Agreement to Gold Sheets
      and other similar bank trade  publications and provided further,  that the
      Administrative Agent and the Lenders may disclose any such information (i)
      to its  Affiliates,  directors,  officers and employees and to its agents,
      including  accountants,  legal  counsel and other  advisors  who have been
      informed of the  confidential  nature of the information  provided and who
      have each  agreed,  for the  benefit  of the  Borrower,  to  preserve  the
      confidentiality  of  the  non-public  information  and  who  each  have  a
      reasonable  need for  such  information  in  connection  with  the  Credit
      Agreement, (ii) to the extent requested by any regulatory

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<PAGE>


      authority,  including,  in the ordinary  course of business,  the National
      Association of Insurance Commissioners or any similar organization, or any
      nationally  recognized  rating agency that requires  access to information
      about a Lender's  investment  portfolio,  and (iii) to the extent a Lender
      reasonably believes it is required by applicable laws or regulations or by
      any subpoena or similar legal process;  provided, that with respect to the
      disclosures  set forth in clause (iii),  unless  prohibited by law, prompt
      notice of such disclosures shall be given to the Borrower. Any Lender may,
      in connection with any assignment,  proposed assignment,  participation or
      proposed  participation  pursuant to this Section  14.10,  disclose to the
      assignee,  participant,  proposed  assignee or proposed  participant,  any
      information  relating to the  Borrower  furnished  to such Lender by or on
      behalf of the Borrower;  provided, that prior to any such disclosure, each
      such assignee,  proposed  assignee,  participant  or proposed  participant
      shall  agree  with  the   Borrower   or  such   Lender  to  preserve   the
      confidentiality of any confidential  information  relating to the Borrower
      received  from  such  Lender.  For  purposes  of  this  Section  14.10(g),
      "non-public  information" does not include  information to the extent that
      (i)  such  information  was  publicly  known  or  otherwise  known  by the
      Administrative  Agent or any Lender at the time of  disclosure  (except to
      the extent such information is wrongfully  obtained by the  Administrative
      Agent or any  Lender),  (ii) such  information  is or becomes  part of the
      public  domain  except  for  a  disclosure  prohibited  hereunder  by  the
      Administrative   Agent  or  any   Lender   or  any   person  to  whom  the
      Administrative   Agent  or  any  Lender  has  disclosed   the   non-public
      information,  or (iii) such information is received by the  Administrative
      Agent or the Lenders without an obligation of confidentiality from a third
      party which to the knowledge of the Administrative  Agent or any Lender is
      not  wrongfully  in  possession  of the same and having no known direct or
      indirect obligation of confidentiality to the Borrower for same.

      (e) Section  14.11(a)  shall be amended in its entirety by  inserting  the
following in lieu thereof:

                "(a) (i) increase the Revolving Credit Commitment of any Lender,
      (ii) reduce the principal amount,  rate of interest or fees payable on any
      Revolving  Credit  Loan or  Reimbursement  Obligation,  (iii)  extend  the
      originally  scheduled  time or times of  payment of the  principal  of any
      Revolving Credit Loan or Reimbursement  Obligation or the time or times of
      payment  of  interest  on  any  Revolving  Credit  Loan  or  Reimbursement
      Obligation or any fee or commission with respect thereto,  (iv) permit any
      subordination of the principal or interest on any Revolving Credit Loan or
      Reimbursement  Obligation or (v) extend the time of the  obligation of the
      Revolving Commitment Lenders to make or issue or participate in Letters of
      Credit,  in any case,  without the written  consent of each Lender holding
      Revolving Credit Loans or a Revolving Credit Commitment,"

      (f) Section  14.11(b)  shall be amended in its entirety by  inserting  the
following in lieu thereof:

           "(b) (i) increase the Term Loan Commitment of any Lender, (ii) reduce
      the rate of interest or fees  payable on any Term Loan,  (iii)  permit any
      subordination of the principal or interest on any Term Loan or (iv) extend
      the originally scheduled time or times of

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<PAGE>


      payment of the  principal of any Term Loan or the time or times of payment
      of  interest  on any  Term  Loan or any  fee or  commission  with  respect
      thereto, in any case, without the written consent of each Lender holding a
      Term Loan or (v) reduce the principal  amount of any Term Loan without the
      written consent of the affected Lender, or"

      3. Amendment to Security Agreement. Section 8 of the Security Agreement is
hereby  amended  by  deleting  the  reference  to  "Section  5.5" of the  Credit
Agreement  contained  therein and  inserting a reference to "Section 5.6" of the
Credit Agreement in lieu thereof.

      4.  Conditions.  The  effectiveness  of this  Second  Amendment  shall  be
conditioned upon the following:

           (a)  Execution.  Receipt by the  Administrative  Agent of this Second
      Amendment  duly  executed by the  Borrower,  Administrative  Agent and the
      Lenders.

           (b)  Additional  Items.  Receipt by the  Administrative  Agent of any
      other document or instrument reasonably requested by it in connection with
      the execution of this Second Amendment.

      5. Limited  Amendment.  Except as  expressly  amended  herein,  the Credit
Agreement, the Security Agreement and each other Loan Document shall continue to
be, and shall remain, in full force and effect.  This Second Amendment shall not
be deemed (a) to be a waiver of, or consent to, or a  modification  or amendment
of, any other term or condition of the Credit Agreement,  the Security Agreement
or any other Loan  Documents or (b) to prejudice any other right or rights which
the Administrative Agent or Lenders may now have or may have in the future under
or in connection with the Credit Agreement,  the Security Agreement or the other
Loan Documents or any of the instruments or agreements  referred to therein,  as
the same may be amended, restated or otherwise modified from time to time.

      6.  Representations and Warranties.  By its execution hereof, the Borrower
hereby  certifies  on  behalf of itself  and its  Subsidiaries  that each of the
representations  and warranties set forth in the Credit  Agreement and the other
Loan  Documents  is true and correct as of the date hereof as if fully set forth
herein (except for any such representations and warranties made as of a specific
date  which  shall be true and  correct as of such date) and that as of the date
hereof no Default or Event of Default has occurred and is continuing.

      7.   Governing Law. This Second  Amendment  shall be governed
by and  construed  in  accordance  with  the  laws of the  State of
North Carolina.

      8.  Counterparts.  This  Second  Amendment  may be  executed  in  separate
counterparts,  each of which when  executed and delivered is an original but all
of which taken together constitute one and the same instrument.

                            [Signature Pages Follow]

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<PAGE>


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





[CORPORATE SEAL]               KINDER MORGAN, INC.,
                               as Borrower


                               By /s/William V. Morgan
                                  ---------------------------------
                                  Name:  William V. Moran
                                  Title: President


                               FIRST UNION NATIONAL BANK, as
                               Administrative Agent and Lender


                               By /s/Ted A. Gardner
                                  --------------------------------- 
                                  Name:  Ted A. Gardner
                                  Title: Senior Vice President







[Second Amendment]