THIRD AMENDMENT
Dan C. Tutcher
Page 4 of 3



               THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

     This Third Amendment to Employment Agreement ("Third Amendment")

is  dated  the 2nd day of March, 1998, and is by and between Midcoast

Energy  Resources, Inc. (the "Employer" or the "Company") and Dan  C.

Tutcher (the "Employee").

                    W  I  T  N  E  S  S  E  T  H:

       WHEREAS,  the  Employer  and  the  Employee  entered  into  an

Employment  Agreement (the "Agreement"), on January 1,  1993,  to  be

effective  April  1,  1993 ("Effective Date"),  as  amended  by  that

certain  Amendment to Employment Agreement, dated April 1, 1993  (the

"First  Amendment"),  and as further amended by that  certain  Second

Amendment to Employment Agreement, dated April 14, 1997 (the  "Second

Amendment")  (the  Agreement,  the First  Amendment  and  the  Second

Amendment  shall be herein jointly referred to as the  "Agreement  as

Amended"); and

     WHEREAS, Employer and Employee agree that it is in both of their

best  interests  to  amend Section 5(A), Base Salary,  Section  5(C),

Other Benefits, and Section 6(D), Termination of Employment, and  add

Section  5(F), Executive Benefits, Section 6(C), Change  of  Control,

Section  8, Accelerated Vesting of Stock Options, Section 9, Covenant

Not To Compete, and Section 10, Solicitation of Customers.

      NOW, THEREFORE, in consideration of the foregoing, the Employer

and the Employee agree as follows:

1.   Section  5  (A), Base Salary, is deleted from the  Agreement  as
     Amended and replaced with the following:

          A.    Base  Salary.   For all services rendered under  this
          Agreement  as  Amended,  beginning  January  1,  1998,  the
          Employer  agrees to pay the Employee during the  Employment
          Period an annual minimum salary ("Salary") in the amount of
          ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($150,000.00)
          per year, payable in equal semi-monthly installments of SIX
          THOUSAND  TWO HUNDRED FIFTY AND NO/100 DOLLARS  ($6,250.00)
          each,  or  the  equivalent  amount  payable  on  any  other
          periodic  basis  consistent  with  the  Employer's  payroll
          procedures (but no less frequently than monthly).  Employer
          shall  make  appropriate deductions from Employee's  Salary
          for  customary withholding taxes and other employment taxes
          as  required for salaried compensation under Federal, State
          or  Local laws.  The foregoing is Employee's minimum Salary
          and  may be adjusted upward from time to time by Employer's
          Board  of  Director's  Compensation Committee.   Employee's
          Salary  shall  be in addition to any bonuses  (in  cash  or
          stock),  which  shall be given from time  to  time  at  the
          discretion  of  Company's Board of Director's  Compensation
          Committee.


2.   Section   5(C),  Other  Benefits,  is  amended  by  adding   the
     following:

          C.    Other  Benefits.     Employee shall  be  entitled  to
          vacation   pay   in  accordance  with  Employer's   written
          corporate policy and to additional paid or unpaid  vacation
          as approved by the President.  Such vacation shall be on  a
          calendar  year basis.  Effective January 1, 1998,  Employee
          shall  be  entitled  to four (4) weeks  vacation  pay.   In
          addition,  Employee shall be entitled to such holidays  and
          sick  leave  as  well as other benefits,  including  fringe
          benefits,  provided other employees of Employer  and  other
          benefits as may be agreed to by the parties.


3.   The following is added to the Agreement as Amended:
          
          Section  5, Compensation, Subsection F, Executive Benefits.
          The  Employee  shall  receive  benefits  similar  to  those
          provided   other  employees  in  similar  executive   level
          positions  who  from  time  to  time  may  be  employed  by
          Employer.
          
          Section 6, Termination of Employment, Subsection C,  Change
          of Control.  This Agreement as Amended may be terminated at
          Employee's option upon a Change of Control of Company.   As
          used herein, "Change of Control" means (i) the sale of  all
          or  substantially all of the assets of Company to a  person
          (other  than  a  wholly-owned  subsidiary  of  Company)  or
          related group (as that term is used in Section 13(d)(3)  of
          the Securities Exchange Act of 1934) of persons (other than
          a  wholly-owned  subsidiary of Company) as an  entirety  or
          substantially as an entirety in one transaction  or  series
          of  related  transactions, (ii) the first day  on  which  a
          majority  of  the  members of the  board  of  directors  of
          Company  are not continuing Directors (i.e., any member  of
          the  board  of  directors who is a member of the  board  of
          directors  on  the  date hereof or who  was  nominated  for
          election  to  the  board of directors with the  affirmative
          vote of 2/3 of the continuing Directors who are members  of
          the  board  of directors at the time of such nomination  or
          elections),  (iii) the acquisition by any person  or  group
          (as  so  defined)  or  persons (other than  a  wholly-owned
          subsidiary  of  Company) of more than  twenty-five  percent
          (25%)  of the total voting power entitled to vote generally
          in  the election of the directors, managers or trustees  of
          Company, (iv) the liquidation or dissolution of Company, or
          (v)  Employee  is  not  the acting president  and/or  chief
          executive  officer  of  Employer.  In  the  event  Employee
          elects  to  terminate his employment under this  provision,
          Employee  shall receive a lump sum payment equal  to  fifty
          percent (50%) of Employee's then current annual salary upon
          written notice of such election.
          
          Section  8: Accelerated Vesting of Stock Options.   All  of
          the  stock options previously or hereinafter granted to the
          Employee  under any and all agreements with Employer  shall
          become  immediately exercisable and vested (i)  should  the
          Employer  discharge Employee, or (ii) upon  termination  of
          this  Agreement  as  Amended, as long as  such  vesting  is
          allowable  under the Employer's stock option plan  pursuant
          to which Employee received such options.
          
          Section 9: Covenant Not To Compete.  For a period of twenty-
          four  (24)  months  from  the date of  any  termination  of
          Employee's employment with the Employer, Employee shall not
          (i)  accept  employment with or render any services  to  or
          form  an association with any business directly competitive
          with  the Employer in the areas where it is doing business,
          or  (ii)  employ  or  offer to employ,  in  a  professional
          capacity  in  any  business directly competitive  with  the
          Employer,  in the areas where it is doing business,  anyone
          who  is  or  has  been a director, office, shareholder,  or
          employee  of the Employer.  Employee acknowledges that  the
          restrictions imposed by this agreement are fully understood
          and  will  not  preclude Employee from  becoming  gainfully
          employed  following  a termination of employment  with  the
          Employer.
          
          Section  10: Solicitation of Customers.  Unless  waived  in
          writing  by Employer, Employee further agrees that he  will
          not,   directly  or  indirectly,  during  the   course   of
          employment   and   for  two  (2)  years   thereafter   upon
          termination  of this employment contract either voluntarily
          or involuntarily, or for any reason whatsoever, solicit the
          trade  or patronage of any of Employer's existing customers
          or prospective customers with whom Employer is negotiating,
          on  the date of termination, regardless of the location  of
          such  customers  or prospective customers of  the  Employer
          throughout   the   United  States  with  respect   to   any
          technologies,  services, product, trade  secret,  or  other
          matters in which the Employer is active.

4.   All other provisions of the Agreement as Amended shall remain in
     full  force  and effect and shall not be affected by this  Third
     Amendment.

IN  WITNESS  HEREOF,  the  parties hereto have  executed  this  Third
Amendment, as of the date first written above.

EMPLOYER:                               EMPLOYEE:

MIDCOAST ENERGY RESOURCES, INC.


By: ________________________________
_____________________________
Name: ______________________________              Dan C. Tutcher
Title: _______________________________

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