FIRST AMENDMENT TO CREDIT AGREEMENT


     This FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered into effective
as of the 1st day of  September,  1997 (this  "Amendment")  among KINDER  MORGAN
OPERATING L.P. "B" (formerly known as Enron  Transportation  Services,  L.P.), a
limited  partnership  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 (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", "Aggregate Revolving Credit Commitments"
and  "Applicable  Margin" 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 as the same may be further amended or supplemented  from time
     to time.

         "Aggregate  Revolving  Credit  Commitments"  at any  time  shall  equal
     $10,000,000,  as the same may be reduced in  accordance  with  Section 2.03
     hereof.

         "Applicable  Margin"  shall mean for Base Rate Loans or LIBOR Loans the
     following rate per annum as applicable based on the  Indebtedness  Ratio in
     effect from time to time:



<PAGE>



              ------------------------------
              Indebtedness   LIBOR     Base
                 Ratio        Rate     Rate
              ------------------------------
                  >4.00      2.000%   0.500%
              ------------------------------
                  >3.50      1.750%   0.250%
              ------------------------------
                  >3.00      1.500%   0.000%
              ------------------------------
                  >2.50      1.250%   0.000%
              ------------------------------
                  <
                  -2.50      1.000%   0.000%
              ------------------------------

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

         "First  Amendment"  shall mean that certain  First  Amendment to Credit
     Agreement dated  effective as of September 1, 1997 among the Borrower,  the
     Agent and the Lenders.

         "Funded  Debt Ratio"  shall have the  meaning  assigned to that term in
     Section 9.20.

         "Indebtedness  Ratio" shall mean the ratio of (i) the  aggregate of all
     Indebtedness  and letters of credit (that are not included in Indebtedness)
     outstanding  on the date of  calculation to (ii) EBITDA for the four fiscal
     quarters  ending on the last day of the  preceding  fiscal  quarter  of the
     Borrower. For purposes of the calculation of the Indebtedness Ratio, EBITDA
     will change four times a year based on the financial  statements  delivered
     by the  Borrower  in  accordance  with  Sections  8.01(a)  and (b): 60 days
     following  the end of the first three  fiscal  quarters of the Borrower and
     120 days  following  the end fourth fiscal  quarter.  The numerator of such
     ratio will vary from time to time based on the outstanding Indebtedness and
     letters of credit.

     4.  Section  2.03(a) of the Credit  Agreement  is hereby  deleted,  and the
following is substituted therefor:

          "(a)  The  Aggregate   Revolving  Credit   Commitments   shall  reduce
     automatically  $1,200,000 on each Quarterly Date  commencing with March 31,
     1998 and may be further reduced pursuant to Section 2.03(b) hereof."

     5.  Section  2.04(a) of the Credit  Agreement  is hereby  deleted,  and the
following is substituted therefor:

         "(i) a  commitment  fee on  the  daily  average  unused  amount  of the
     Aggregate Revolving Credit Commitment for the period from and including the


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<PAGE>

     Closing Date to but excluding the Revolving Credit  Termination Date at the
     following rate per annum based on the Indebtedness Ratio:

                 ----------------------------
                   Indebtedness   Commitment
                       Ratio          Fee
                 ----------------------------
                       >3.50         0.375%
                 ----------------------------
                       <
                       -3.50         0.250%
                 ----------------------------

     Accrued  commitment  fees  shall be  payable  quarterly  in arrears on each
     Quarterly  Date and on the  earlier  of the date  the  Aggregate  Revolving
     Credit Commitments are terminated or the Revolving Credit Termination Date.

         (ii) a letter of credit  fee,  computed  (on the basis of a year of 360
     days and actual days  elapsed)  for each day from the  Closing  Date at the
     rate of 1.50% per annum of the LC  Maximum  Amount,  payable  quarterly  in
     arrears on each Quarterly Date."

     6. Section  2.04(b)(i) of the Credit  Agreement is hereby deleted,  and the
following is substituted therefor:

         "(i) 1/8% per annum of the LC Maximum Amount as a fronting fee, payable
     quarterly in arrears on each Quarterly Date."

     7.  Section  6.01(l)  of the  Credit  Agreement  is hereby  deleted  in its
entirety.

     8.  Section 9.01 of the Credit  Agreement  is hereby  amended by adding the
following new subsection (h):

         "(h) the  Borrower  may  become  and  remain  liable  with  respect  to
     unsecured  Indebtedness of the Borrower owing to the General Partner or any
     Subsidiary  or any other  Affiliate  of the  General  Partner  created  and
     outstanding under a subordinated promissory note subordinated pursuant to a
     Subordination Agreement substantially in the form of Exhibit A to the First
     Amendment so long as the  aggregate  outstanding  principal  amount of such
     subordinated Indebtedness does not at any time exceed $25,000,000."

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

         "(g) in addition to the investments permitted by Section 9.03(h), other
     investments,  loans or advances not to exceed  $500,000 in the aggregate at
     any time; and

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<PAGE>


         (h) loans or  advances  to the  Guarantor;  provided  that  immediately
     before and after each loan or advance no Default or Event of Default exists
     and is continuing."

     10. Section 9.13 of the Credit  Agreement is hereby amended by deleting the
second sentence and substituting the following sentence therefor:

         "For purposes of this Section 9.13, "Debt Service Ratio" shall mean the
     ratio of (i) EBITDA  for the four  fiscal  quarters  ending on such date to
     (ii) cash payments made for scheduled principal payments, including without
     limitation,  any  prepayments  required as a result of the reduction of the
     Aggregate  Revolving  Credit  Commitment  pursuant  to Section  2.03(a) and
     interest on Debt of the Borrower and its  Consolidated  Subsidiaries  other
     than as permitted  under Section  9.01(f) for such four fiscal  quarters of
     the Borrower and its Consolidated Subsidiaries."

     11.  Section  9.16 of the  Credit  Agreement  is hereby  amended to read as
follows:

         "Section 9.16  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, are in the ordinary course of its
     business and are upon fair and reasonable terms to it."

     12. Article IX of the Credit Agreement is hereby supplemented by adding the
following new Section 9.20:

         "Section  9.20  Funded  Debt Ratio.  Commencing  on the fiscal  quarter
     ending June 30, 1997, the Borrower will not permit its Funded Debt Ratio as
     of the end of any fiscal quarter of the Borrower  (calculated  quarterly at
     the end of each  fiscal  quarter)  to be  greater  than  4.50 to 1.00.  For
     purposes of this Section 9.20,  "Funded Debt Ratio" shall mean the ratio of
     (i) the aggregate of all  outstanding  Debt for borrowed  money  (excluding
     Debt  outstanding on the Bonds and Debt  permitted by Section  9.01(h)) and
     letters of credit on such date to (ii) EBITDA for the four fiscal  quarters
     ending on such date."

     13. Section 10.01(b) of the Credit Agreement is hereby amended by replacing
the name "Mont Belview Associates" with the name "Mont Belvieu Associates."

     14. Annex 1 to the Credit Agreement is hereby deleted and replaced by Annex
1 attached to this Amendment.

     15. This Amendment  shall become binding when the Agent shall have received
counterparts of this Amendment executed by the Borrower and the Lenders and such
other documents as the Agent or its counsel may reasonably request.


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<PAGE>


     16.  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.

     17. 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.

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

     19. 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.

     20.  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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<PAGE>



     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 OPERATING L.P. "B"
                           (formerly known as Enron Transportation 
                           Services, L.P.)

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


                                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