UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549

                            FORM 10-Q
(Mark One)

[x]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended      September 30, 1999
                              ------------------------------
                                          OR
[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

For the transition period from               to
                              ---------------  ------------------

Commission File Number                  1-6446
                      -------------------------------------------

                         KINDER MORGAN, INC.
-----------------------------------------------------------------
     (Exact name of registrant as specified in its charter)

                Kansas                        48-0290000
-----------------------------------------------------------------
          (State or other Jurisdiction of   (I.R.S. Employer
          incorporation or organization)    Identification No.)

             1301 McKinney, Suite 3400,
             Houston, Texas                  77010
-----------------------------------------------------------------
(Address of principal executive offices)   (Zip Code)

                          (713) 844-9500
-----------------------------------------------------------------
      (Registrant's telephone number, including area code)

K N ENERGY, INC., 370 Van Gordon Street, P.O. Box 281304,
-----------------------------------------------------------------
Lakewood, Colorado, 80228-8304
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                         Yes  X         No
                            ------        -------

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

Common stock, $5 par value; authorized 150,000,000 shares;
-----------------------------------------------------------------
outstanding 112,559,793 shares as of October 22, 1999.
------------------------------------------------------

<PAGE> 2                                                        Form 10-Q

KINDER MORGAN, INC. (FORMERLY K N ENERGY, INC.) AND SUBSIDIARIES
                            FORM 10-Q
                QUARTER ENDED SEPTEMBER 30, 1999
                            Contents

PART I.FINANCIAL INFORMATION

 Item 1.  Financial Statements (Unaudited)                         Page Number
                                                                   -----------


           Consolidated Balance Sheets............................       3 & 4
           Consolidated Statements of Income......................           5
           Consolidated Statements of Cash Flows..................           6
           Notes to Consolidated Financial Statements.............      7 - 19

 Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations....................     20 - 33

 Item 3.  Quantitative and Qualitative Disclosures About
           Market Risk............................................          33

PART II    OTHER INFORMATION

 Item 1.  Legal Proceedings.......................................          34
 Item 2.  Changes in Securities and Use of Proceeds...............          34
 Item 4.  Submission of Matters to a Vote of Security Holders.....          35
 Item 5   Other Information.......................................     35 & 36
 Item 6.  Exhibits and Reports on Form 8-K........................     36 & 37

SIGNATURE.........................................................          38

<PAGE> 3                                                        Form 10-Q

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

CONSOLIDATED BALANCE SHEETS (Unaudited)
Kinder Morgan, Inc. (Formerly K N Energy, Inc.) and Subsidiaries
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                       September 30         December 31
                                                           1999                 1998
                                                       -------------       -------------
<S>                                                    <C>                 <C>


ASSETS:
Current Assets:
Cash and Cash Equivalents                              $   22,459          $   21,955
Restricted Deposits                                         7,461               9,096
U.S. Government Securities                                      -           1,092,415
Accounts Receivable                                       660,988             693,044
Inventories                                               134,209             144,831
Gas Imbalances                                             84,477              85,349
Other                                                      51,265              46,812
                                                       ----------          ----------
                                                          960,859           2,093,502
                                                       ----------          ----------
Investments                                               257,570             252,543
                                                       ----------          ----------

Property, Plant and Equipment                           7,767,790           7,767,332
Less Accumulated Depreciation and Amortization            880,768             744,156
                                                       ----------          ----------
                                                        6,887,022           7,023,176
                                                       ----------          ----------

Deferred Charges and Other Assets                         246,690             242,991
                                                       ----------          ----------
Total Assets                                           $8,352,141          $9,612,212
                                                       ==========          ==========
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE> 4                                                        Form 10-Q

CONSOLIDATED BALANCE SHEETS (Unaudited)
Kinder Morgan, Inc. (Formerly K N Energy, Inc.) and Subsidiaries
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                       September 30         December 31
                                                           1999                 1998
                                                       -------------       -------------
<S>                                                    <C>                 <C>


LIABILITIES AND STOCKHOLDERS' EQUITY:
Current Liabilities:
Current Maturities of Long-term Debt                   $    7,167          $   10,167
Notes Payable                                             578,700             297,000
Substitute Note                                                 -           1,394,846
Accounts Payable                                          543,811             489,414
Accrued Taxes                                              28,474              18,914
Gas Imbalances                                             68,925              74,857
Payable for Purchase of Thermo Companies                   43,762              86,799
Other                                                     201,385             247,465
                                                       ----------          ----------
                                                        1,472,224           2,619,462
                                                       ----------          ----------
Other Liabilities and Deferred Credits:
Deferred Income Taxes                                   1,696,908           1,699,072
Other                                                     321,354             431,565
                                                       ----------          ----------
                                                        2,018,262           2,130,637
                                                       ----------          ----------

Long-term Debt                                          3,298,484           3,300,025
                                                       ----------          ----------

KMI-Obligated Mandatorily Redeemable Preferred
  Capital Trust Securities of Subsidiary Trusts
   Holding Solely Debentures of KMI                       275,000             275,000
                                                       ----------          ----------

Minority Interests in Equity of Subsidiaries               64,213              63,267
                                                       ----------          ----------

Stockholders' Equity:
Preferred Stock, Class A, 0 and 70,000 Shares
  Outstanding                                                   -               7,000
                                                       ----------          ----------
Common Stock-

  Authorized - 150,000,000 Shares, Par
   Value $5 Per Share
  Outstanding - 70,893,517 and 68,597,308
   Shares, Respectively,
   After Deducting 73,936 and 48,598 Shares
   Held in Treasury                                       354,837             343,230
Additional Paid-in Capital                                731,199             694,223
Retained Earnings                                         141,663             193,925
Other                                                      (3,741)            (14,557)
                                                       ----------          ----------
Total Common Stockholders' Equity                       1,223,958           1,216,821
                                                       ----------          ----------
Total Stockholders' Equity                              1,223,958           1,223,821
                                                       ----------          ----------
Total Liabilities and Stockholders' Equity             $8,352,141          $9,612,212
                                                       ==========          ==========
</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE> 5                                                        Form 10-Q

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Kinder Morgan, Inc. (Formerly K N Energy, Inc.) and Subsidiaries
(In Thousands Except Per Share Amounts)

<TABLE>
<CAPTION>
                                                     Three Months Ended                Nine Months Ended
                                                        September 30                      September 30
                                               ------------------------------    ------------------------------
                                                    1999             1998            1999             1998
                                                    ----             ----            ----             ----
<S>                                            <C>              <C>              <C>              <C>

Operating Revenues:
Upstream Gathering and Processing              $  187,668       $  156,674       $  485,364       $  447,084
Midstream Sales, Transportation and Storage       445,116          414,717        1,177,494        1,089,397
Downstream Retail and Marketing                 1,136,678          656,629        2,740,341        2,112,923
Intersegment Eliminations                        (310,773)        (181,803)        (699,181)        (384,341)
                                               ----------       ----------       ----------       ----------
Total Operating Revenues                        1,458,689        1,046,217        3,704,018        3,265,063
                                               ----------       ----------       ----------       ----------

Operating Costs and Expenses:
Gas Purchases and Other Costs of Sales          1,233,615          792,289        2,995,953        2,526,966
Operations and Maintenance                         70,072           60,659          199,963          190,354
General and Administrative                         32,039           31,977          103,799           92,769
Depreciation and Amortization                      40,990           52,999          147,993          142,198
Taxes, Other Than Income Taxes                     13,611           14,449           41,274           39,736
Merger-related and Severance Costs                 10,962                -           10,962            5,763
                                               ----------       ----------       ----------       ----------
Total Operating Costs and Expenses              1,401,289          952,373        3,499,944        2,997,786
                                               ----------       ----------       ----------       ----------

Operating Income                                   57,400           93,844          204,074          267,277
                                               ----------       ----------       ----------       ----------

Other Income and (Deductions):
Interest Expense, Net                             (69,734)         (64,507)        (210,505)        (178,340)
Minority Interests                                 (5,636)          (4,394)         (16,789)         (11,390)
Other, Net                                         15,202           14,861           36,607           28,032
                                               ----------       ----------       ----------       ----------
Total Other Income and (Deductions)               (60,168)         (54,040)        (190,687)        (161,698)
                                               ----------       ----------       ----------       ----------

Income (Loss) from Continuing Operations
  Before Income Taxes                              (2,768)          39,804           13,387          105,579
Income Taxes (Benefit)                             (1,079)          14,730            5,221           39,067
                                               ----------       ----------       ----------       ----------
Income (Loss) from Continuing Operations           (1,689)          25,074            8,166           66,512
                                               ----------       ----------       ----------       ----------

Discontinued Operations, Net of Tax (Note 6):
Loss from Discontinued Operations                  (1,350)            (599)          (6,491)          (2,840)
Loss on Disposal of Discontinued Operations       (11,479)               -          (11,479)               -
                                               ----------       ----------       ----------       ----------
Total Loss from Discontinued Operations           (12,829)            (599)         (17,970)          (2,840)
                                               ----------       ----------       ----------       ----------

Net Income (Loss)                                 (14,518)          24,475           (9,804)          63,672
Less - Preferred Stock Dividends                        -               88              129              263
Less - Premium Paid on Preferred Stock
        Redemption                                      -                -              350                -
                                               ----------       ----------       ----------       ----------
Earnings (Loss) Available For Common Stock     $  (14,518)      $   24,387       $  (10,283)      $   63,409
                                               ==========       ==========       ==========       ==========

Number of Shares Used in Computing
  Basic Earnings Per Common Share                  70,914           67,493           70,363           62,534
                                               ==========       ==========       ==========       ==========
Basic Earnings (Loss) Per Common Share:
Continuing Operations                          $    (0.02)      $     0.37       $     0.11       $     1.06
Discontinued Operations                        $    (0.02)      $    (0.01)      $    (0.09)      $    (0.05)
Disposal of Discontinued Operations            $    (0.16)      $        -       $    (0.17)      $        -
                                               ----------       ----------       ----------       ----------
Total Basic Earnings (Loss) Per Common Share   $    (0.20)      $     0.36       $    (0.15)      $     1.01
                                               ==========       ==========       ==========       ==========
Number of Shares Used in Computing
  Diluted Earnings Per Common Share                70,914           67,991           70,441           63,225
                                               ==========       ==========       ==========       ==========
Diluted Earnings (Loss) Per Common Share:
Continuing Operations                          $    (0.02)      $     0.37       $     0.11       $     1.05
Discontinued Operations                        $    (0.02)      $    (0.01)      $    (0.09)      $    (0.05)
Disposal of Discontinued Operations            $    (0.16)      $        -       $    (0.17)      $        -
                                               ----------       ----------       ----------       ----------
Total Diluted Earnings (Loss) Per Common Share $    (0.20)      $     0.36       $    (0.15)      $     1.00
                                               ==========       ==========       ==========       ==========
Dividends Per Common Share                     $     0.20       $     0.19       $     0.60       $     0.56
                                               ==========       ==========       ==========       ==========

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE> 6                                                        Form 10-Q

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Kinder Morgan, Inc. (Formerly K N Energy, Inc.) and Subsidiaries
Increase (Decrease) in Cash and Cash Equivalents
(In Thousands)

<TABLE>
<CAPTION>
                                                                    Nine Months Ended
                                                                       September 30
                                                            ----------------------------------
                                                                1999                 1998
                                                                ----                 ----
<S>                                                         <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Income from Continuing Operations                           $    8,166          $   66,512
Adjustments to Reconcile Income from Continuing
  Operations to Net Cash Flows from Operating Activities:
Depreciation and Amortization, Excluding Amortization
  of Gas Plant Acquisition Adjustment                           78,915              71,137
Deferred Income Taxes                                           (1,607)             13,867
Deferred Purchased Gas Costs                                     5,799              13,151
Net Gains on Sales of Facilities                               (30,942)            (18,424)
Proceeds from Buyout of Contractual Gas Purchase
  Obligations                                                        -              27,500
Change in Gas in Underground Storage                            12,437             (69,478)
Changes in Other Working Capital Items (Note 9)                 61,177             (57,160)
Changes in Deferred Revenues                                   (10,520)             14,567
Other, Net                                                      12,769             (49,732)
                                                            ----------          ----------
Net Cash Flows From Continuing Operations                      136,194              11,940
Net Cash Flows From Discontinued Operations                    (12,647)             (8,845)
                                                            ----------          ----------
NET CASH FLOWS FROM OPERATING ACTIVITIES                       123,547               3,095
                                                            ----------          ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Capital Expenditures                                           (84,126)           (205,320)
Cash Paid for Acquisition of MidCon, Net of Cash
  Acquired                                                           -          (2,181,954)
Other Acquisitions                                             (39,810)            (15,327)
Investments - Continuing Operations                            (40,643)             (9,248)
Investments - Discontinued Operations                           (6,088)             (9,900)
Sale of U.S. Government Securities                           1,092,415           1,093,591
Purchase of U.S. Government Securities                               -          (2,182,192)
Purchase of U.S. Government Securities as Collateral
  for Thermo Purchase Obligation                                     -             (34,028)
Proceeds from Sale of Tom Brown, Inc. Preferred Stock           28,650                   -
Proceeds from Sales of Other Assets                             89,562              28,795
                                                            ----------          ----------
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING
  ACTIVITIES                                                 1,039,960          (3,515,583)
                                                            ----------          ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term Debt, Net                                        (1,113,146)            425,812
Long-term Debt - Issued                                              -           2,350,000
Long-term Debt - Retired                                        (5,167)            (23,627)
Common Stock Issued in Public Offering                               -             650,000
Other Common Stock Issued                                        5,590              11,694
Mandatorily Redeemable Trust Securities Issued                       -             175,000
Preferred Stock Redeemed                                        (7,350)                  -
Treasury Stock Acquired                                           (309)               (580)
Cash Dividends, Common and Preferred                           (42,458)            (37,903)
Minority Interests, Net                                            934              16,844
PEPS Contract Fees                                              (1,097)                  -
Securities Issuance Costs                                            -             (52,142)
                                                            ----------          ----------
NET CASH FLOWS (USED IN) PROVIDED BY FINANCING
  ACTIVITIES                                                (1,163,003)          3,515,098
                                                            ==========          ==========

Net Increase in Cash and Cash Equivalents                          504               2,610
Cash and Cash Equivalents at Beginning of Period                21,955              22,471
                                                            ----------          ----------
Cash and Cash Equivalents at End of Period                  $   22,459          $   25,081
                                                            ==========          ==========

</TABLE>

For supplemental cash flow information, see Note 9.
The accompanying notes are an integral part of these statements.

<PAGE> 7                                                        Form 10-Q

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   General
     -------

Effective with K N Energy, Inc.'s acquisition of Kinder Morgan,
Inc., a Delaware corporation ("Kinder Morgan Delaware"), K N
Energy, Inc. changed its name to Kinder Morgan, Inc.  As used
herein, "Kinder Morgan", "KMI" or the "Company" refers to Kinder
Morgan, Inc. (a Kansas corporation and formerly K N Energy, Inc.)
and its consolidated subsidiaries unless the context otherwise
requires (see Note 2).  In the opinion of Management, all
adjustments necessary for a fair presentation of the results for
the unaudited interim periods have been made.  Except as
explicitly noted, these adjustments consist solely of normal
recurring accruals.  Certain prior period amounts have been
reclassified to conform to the current presentation.

2.   Business Combinations
     ---------------------

On July 8, 1999, K N Energy, Inc. announced the signing of an
agreement and plan of merger to acquire Kinder Morgan Delaware,
the sole stockholder of the general partner of Kinder Morgan
Energy Partners, L. P. ("KMEP").  KMEP is the nation's largest
pipeline master limited partnership.  It owns and operates one of
the largest product pipeline systems in the United States,
serving customers in sixteen states with more than 5,000 miles of
pipeline and over twenty associated terminals.  KMEP also
operates 24 bulk terminal facilities which transload over 40
million tons of coal, petroleum coke and other products annually.
In addition, KMEP owns 51 percent of Plantation Pipe Line Company
and 20 percent of Shell CO2 Company, Ltd.

This merger was completed on October 7, 1999.  Pursuant to the
terms of the merger agreement, K N Energy, Inc. issued
approximately 41.5 million shares of its common stock in exchange
for all of the outstanding shares of Kinder Morgan Delaware.
On October 7, 1999, the Company issued 200,000 shares of its common
stock to Petrie Parkman (the "Petrie Shares") pursuant to the terms
of the engagement letter between Petrie Parkman and the Company
dated as of June 24, 1999, as amended as of August 20, 1999, in
consideration for Petrie Parkman's advisory services rendered in
connection with the acquisition of Kinder Morgan Delaware.  The
issuance of the Petrie Shares was exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended.

Upon closing of the transaction, Richard D. Kinder, Chairman and
Chief Executive Officer of Kinder Morgan Delaware, was named
Chairman and Chief Executive Officer of the Company, which was
renamed Kinder Morgan, Inc.  This merger will be recorded as a
purchase for accounting purposes, with the Company's general and
limited partnership interests in KMEP reported as an investment
in the statement of financial position.

On February 22, 1999, Sempra Energy ("Sempra") and the Company
announced that their respective boards of directors had
unanimously approved a definitive agreement under which Sempra
and the Company would combine in a stock-and-cash transaction
valued in the aggregate at $6.0 billion.  On June 21, 1999,
Sempra and the Company announced that they had mutually agreed to
terminate the merger agreement.  Sempra reimbursed the Company
$5.95 million for expenses incurred in connection with the
proposed merger.

During the third quarter of 1998, the Company completed its
acquisition of interests in four independent power plants in
Colorado from the Denver-based Thermo Companies ("Thermo"),
representing approximately 380 megawatts of electric generation
capacity and access to approximately 130 Bcf of natural gas
reserves.  These generating facilities are located in Ft. Lupton,
Colorado (272 megawatts) and Greeley, Colorado (108 megawatts)
and sell their power output to Public Service Company of Colorado
under long-term agreements.  Payments for these interests are
being made over a two-year period, with the initial payment of
689,810 shares

<PAGE> 8                                                        Form 10-Q

(1,034,715 shares adjusted for the December 1998
three-for-two stock split) of the Company's common stock having
been made on October 21, 1998.  Additional payments were made on
January 4, 1999, consisting of 833,623 shares of the Company's
common stock and $15 million in cash, and on April 20, 1999,
consisting of 1,232,286 shares of the Company's common stock and
$20 million in cash.  The remaining payment, due in 2000, is
expected to be made in a combination of cash and common stock as
agreed to by the Company and Thermo, with the default mix being
50 percent stock and 50 percent cash.  This transaction was
accounted for as a purchase.

On January 30, 1998, pursuant to a definitive stock purchase
agreement (the "MidCon Agreement"), the Company acquired all of
the outstanding shares of capital stock of MidCon Corp.
("MidCon") from Occidental Petroleum Corporation ("Occidental")
for $2.1 billion in cash and the assumption of a $1.4 billion
note (the "Substitute Note"), at which time MidCon became a
wholly owned subsidiary of K N Energy, Inc. (the "Acquisition").
The Substitute Note bore interest at 5.798% and was required to
be collateralized by U.S. government securities, letters of
credit or a combination thereof.  The Substitute Note was paid in
full on January 4, 1999.  In conjunction with the Acquisition,
the Company also assumed MidCon's obligation to lease the MidCon
Texas intrastate pipeline system under a 30-year operating lease,
requiring average annual lease payments of approximately $30
million.  The Acquisition was initially financed through a
combination of credit agreements (see Note 11).

The Acquisition was accounted for as a purchase for accounting
purposes and, accordingly, the MidCon assets acquired and
liabilities assumed were recorded at their respective estimated
fair market values as of the acquisition date.  The allocation of
purchase price resulted in the recognition of a gas plant
acquisition adjustment of approximately $3.9 billion, principally
representing the excess of the assigned fair market value of the
assets of Natural Gas Pipeline Company of America ("NGPL"), a
wholly owned subsidiary of MidCon, over the historical cost for
ratemaking purposes.  This gas plant acquisition adjustment, none
of which is currently being recognized for rate-making purposes,
is being amortized over 55 years (see Note 4), approximately the
estimated remaining useful life of NGPL's interstate pipeline
system.  For the three months ended September 30, 1999 and 1998,
$14.6 million and $26.7 million of such amortization,
respectively, was charged to expense.  For the nine months ended
September 30, 1999 and 1998, $69.1 million and $71.1 million,
respectively, was charged to expense.  The assets, liabilities
and results of operations of MidCon are included with those of
the Company beginning with the January 30, 1998 acquisition date.
For the nine months ended September 30, 1998, operating revenues,
net income, diluted earnings per common share and number of
shares used in computing diluted earnings per share, on a pro
forma basis to reflect the acquisition of MidCon, were $3,519.3
million, $67.6 million, $1.07 and 63.225 million, respectively.

3.   Merger-related and Severance Costs
     ----------------------------------

In anticipation of the completion of the transaction with Kinder
Morgan Delaware, during the third quarter the Company terminated
the employment of a number of its officers and certain other
employees.  In conjunction with these terminations, the Company
agreed to provide certain severance benefits and incurred certain
legal and other associated costs.  These amounts, totaling
approximately $11.0 million pre-tax ($6.7 million after tax or
$0.09 per diluted share) are included in the accompanying interim
Consolidated Statements of Income under the caption "Merger-
related and Severance Costs" for the three months and nine months
ended September 30, 1999.  The $5.8 million pre-tax ($3.6 million
after tax or $0.06 per diluted share) included under the same
caption for the nine months ended September 30, 1998 represents
costs associated with the Company's January 30, 1998 acquisition
of MidCon Corp.  For additional information on these business
combinations, see Note 2.

<PAGE> 9                                                        Form 10-Q

In addition, the Company has notified a number of additional
employees that their employment will be terminated as a result of
cost saving initiatives implemented following the closing of the
Kinder Morgan Delaware transaction.  The substantial majority of
these employees will be terminated during 1999, with the
remainder during early 2000.  A significant amount of severance
and associated costs for these employees will be recorded during
the fourth quarter of 1999.

4.   Change in Accounting Estimate
     -----------------------------

Pursuant to a revised study of the useful lives of the underlying
assets by an independent third party, in July 1999, the Company
changed the depreciation rates associated with the gas plant
acquisition adjustment recorded in conjunction with the
acquisition of MidCon Corp.  This change had the effect of
decreasing "Depreciation and Amortization" by approximately $12.4
million and increasing "Income from Continuing Operations" and
"Net Income" for the quarter and nine months ended September 30,
1999 by approximately $7.6 million or $0.11 per diluted share.

5.   Investments and Sales
     ---------------------

On September 30, 1999, the Company sold its interests in Stingray
Pipeline Company, L.L.C., an offshore pipeline that gathers
natural gas, and West Cameron Dehydration Company, L.L.C., which
dehydrates natural gas for shippers on the Stingray Pipeline.
The Company received approximately $24 million in cash from the
sale and recorded a pre-tax gain of $11.4 million (approximately
$6.9 million after tax or $0.10 per diluted share). With this
sale, the Company completed its divestiture of its major offshore
interests.

On September 3, 1999, the Company sold 1,000,000 shares of Tom
Brown, Inc. preferred stock for approximately $29 million in
cash, realizing a pre-tax gain of $2.2 million (approximately
$1.3 million after tax or $0.02 per diluted share).  The
preferred stock was originally issued to the Company in 1996 as
part of Tom Brown, Inc.'s acquisition of K N Production Company.
The preferred stock was convertible into 1,666,000 shares of Tom
Brown, Inc. common stock, and paid dividends quarterly at an
annual rate of $1.75 per share.  The Company retained ownership
of approximately 918,000 shares of Tom Brown, Inc. common stock.

In September 1999, Thunder Creek Gas Services, LLC, a joint
venture owned 25 percent by the Company and 75 percent by Devon
Energy Corporation, placed into service a 126-mile-long-trunkline
natural gas gathering system extending from Glenrock, Wyoming to
approximately 12 miles north of Gillette, Wyoming.  The trunkline
has an initial capacity of 450 million cubic feet of natural gas
per day.  The gathering system is located in the Powder River
Basin of northeast Wyoming and is expected to be fully
operational before year-end 1999, after installation of a carbon
dioxide removal plant. The expected total cost of the system is
approximately $100 million.

On June 30, 1999, the Company sold its interests in the HIOS and
UTOS offshore pipeline systems and related laterals to Leviathan
Gas Pipeline Partners, L. P.  The Company received approximately
$51 million in cash in conjunction with the sale and recorded a
pre-tax gain of $17.5 million (approximately $10.7 million after
tax or $0.15 per diluted share).

In May 1999, the Company announced plans to build the Horizon
Pipeline, a 129-mile-long natural gas pipeline from Joliet,
Illinois, to Hales Corners, Wisconsin.  Construction is expected
to be completed by the fall of 2001. The estimated cost of the
project is $150 million to $250 million, depending on shipper
response and design capacity, which is expected to be from 630
million cubic feet up to 1.2 billion cubic feet per day.  The
Company plans to jointly own the pipeline with one or more other
partners.  An open season closed in June 1999 with

<PAGE> 10                                                       Form 10-Q

service requests from shippers of more than 800 MMcf of natural
gas per day, including 300 MMcf per day from Nicor Gas.  The project
is expected to be funded through a combination of non-recourse debt
securities and equity contributions.

On March 31, 1999, the TransColorado Gas Transmission Company
("TransColorado"), an enterprise jointly owned by the Company and
Questar Corp., placed in service a 280-mile-long natural gas
pipeline, which includes two compressor stations and extends from
near Rangely, Colorado, to its southern terminus at the Blanco Hub
near Aztec, New Mexico.  The pipeline has a design transmission capacity
of approximately 300 million cubic feet of natural gas per day.  On
October 14, 1998, TransColorado entered into a $200 million
revolving credit agreement with a group of commercial banks.  The
Company provides a corporate guarantee for one-half of all
amounts borrowed under the agreement.

In September 1998, the Company sold certain of its microwave
towers and associated land and equipment to American Tower Corp.
for $14.6 million.  The sale resulted in a pre-tax gain of $10.9
million ($6.7 million after tax or $0.10 per diluted share) that
is included in the accompanying interim Consolidated Statements
of Income under the caption "Other, Net."

In March 1998, the Company sold its Kansas retail natural gas
distribution properties, located in 58 Kansas communities and
serving approximately 30,000 residential, commercial and
industrial customers, to Midwest Energy, Inc., a customer-owned
cooperative based in Hays, Kansas.  The Company received
approximately $24 million in cash in conjunction with the sale
and recorded a pre-tax gain of approximately $8.5 million
(approximately $5.2 million after tax or $0.08 per diluted
share).  Concurrently with the sale, the Company received $27.5
million in cash in exchange for the release of the purchaser from
certain contractual gas purchase obligations, which amount will
be amortized as an offset to gas purchases over a period of years
as the associated volumes are sold.

6.   Discontinued Operations
     -----------------------

During the third quarter, the Company adopted a plan to
discontinue the direct marketing of non-energy products and
services (principally under the "Simple Choice" brand), which
activities had been carried on largely through the Company's
en*able joint venture with PacifiCorp.  In accordance with the
provisions of Accounting Principles Board Opinion No. 30,
"Reporting the Results of Operations -- Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions," ("APB 30"),
the Company has segregated the results of operations of this line
of business for all periods presented and reported such results
(net of associated tax benefit of $0.9 million and $0.4 million
for the three months ended September 30, 1999 and 1998,
respectively, and $4.1 million and $1.7 million for the nine
months ended September 30, 1999 and 1998, respectively) as
"Discontinued Operations, Net of Tax" in the accompanying interim
Consolidated Statements of Income.  The Company intends to
discontinue the operations of en*able and sell en*able's interest
in Orcom Solutions, a wholly owned subsidiary of en*able.

The principal assets of this discontinued line of business
remaining as of September 30, 1999 consisted of an investment in
en*able and an indirect investment in Orcom Solutions (a provider
of custom software and outsource billing solutions for
utilities).  The expected loss (net of tax benefit of $7.3
million) from disposal of this business, including both the
expected losses from the sale of assets and the estimated
operating losses until the disposal is completed (currently
expected no later than the first quarter of 2000), are reported
in the accompanying interim Consolidated Statements of Income as
"Loss on Disposal of Discontinued Operations, Net of Tax."  This
estimated loss is subject to uncertainty with respect to the
proceeds to be received from the

<PAGE> 11                                                       Form 10-Q

sale of assets (among other factors) and, accordingly, the actual
loss may differ materially from the estimate.  In accordance with
the provisions of APB 30, any such difference will be recognized
in the period in which it is identified, and classified in the same
manner as the original estimated loss.

Additionally, the Company previously announced its intention to
dispose of certain other non-core assets.  Following the
acquisition by merger of Kinder Morgan Delaware in early October
1999 (see Note 2), the Company has both identified additional assets
for potential disposition including, most recently, its commodity
marketing business, and continued to develop plans for accomplishing
these potential divestitures. For at least the substantial majority of
all non-core businesses identified for disposition, the Company
currently expects that, during the fourth quarter, it will meet
the APB 30 requirements for a "measurement date," requiring that
the Company (i) reclassify the results of operations for such
assets to discontinued operations for all periods presented and
(ii) record an estimate of the losses expected to the projected
disposal date and the loss (if any) expected upon disposition.
In addition, as discussed in the Company's 1999 second quarter
report on Form 10-Q, certain other assets may be required to be
written down as a result of becoming subject to the provisions of
Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of."  While the ultimate effect of these matters
cannot yet be determined with a high degree of accuracy due to,
among other factors, (i) uncertainty as to the form of
disposition and the proceeds to be generated therefrom and (ii)
the fact that projected losses on disposal are estimated and
recognized while projected gains are recognized only when
realized, the Company currently expects that a significant fourth-
quarter loss will be recorded.

7.   Accounts Receivable Sales Facility
     ----------------------------------

In September 1999, certain wholly owned subsidiaries
("Originators") of the Company entered into a five-year agreement
to sell all of their accounts receivable, on a revolving basis,
to KN Receivables Corporation ("KNRC"), a wholly owned subsidiary of
the Company.  KNRC was formed prior to the execution of that
receivables agreement for the purpose of buying and selling
accounts receivable and has been determined to be bankruptcy
remote.  Also in September 1999, KNRC entered into a five-year
agreement with a financial institution whereby KNRC can sell, on
a revolving basis, an undivided percentage ownership interest in
certain eligible accounts receivable, as defined, up to a maximum
of $150 million.  This transaction is accounted for as a sale of
receivables in accordance with Statement of Financial Accounting
Standards No. 125, "Accounting for Transfer and Servicing of
Financial Assets and Extinguishment of Liabilities."  Accordingly,
the Company's accompanying interim Consolidated Balance Sheet
reflects the portion of receivables transferred to the financial
institution as a reduction of Accounts Receivable.  Gains and
losses from the sale of these receivables are included in "Other,
Net" in the accompanying interim Consolidated Statements of Income.
The Company receives compensation for servicing that is approximately
equal to the amount an independent servicer would receive.
Accordingly, no servicing assets or liabilities have been
recorded.  The full amount of the allowance for possible losses
has been retained by KNRC.  The fair value of this recourse
liability approximated the allocated allowance for doubtful
accounts given the short-term nature of the transferred
receivables.

The Company received $150 million in proceeds from the sale of
receivables on September 30, 1999.  The proceeds were
subsequently used to retire outstanding notes payable of Kinder
Morgan Delaware at the time of its acquisition by the Company.
The net effect of the loss associated with the sale of
receivables was not material to the Company's 1999 operating
results for the quarter or nine months ended September 30, 1999.
Cash flows associated with this program are included with
"Accounts Receivable" under "Cash Flows from Operating
Activities" in the accompanying interim Statements of
Consolidated Cash Flows.

<PAGE> 12                                                       Form 10-Q

8.   Stock Option Program
     --------------------

On October 8, 1999, the Company's Board of Directors approved the
creation of the Kinder Morgan, Inc. All Employee Stock Option
Program, a broadly based non-qualified stock option program for all
regular full-time employees.  However, no options were allocated
to Richard Kinder and William Morgan.  Of the 5.5 million non-
qualified stock options available for grant under the program, on
October 8, 1999, grants totaling approximately 4.7 million stock
options, all priced at $23.8125 per share, the closing price of
the Company's common stock on October 8, 1999, were awarded.  These
options vest in 25 percent increments on the anniversary of the grant
over a four-year period from the date of grant.  All options
granted under the program have a 10-year life, and must be granted
at the fair market value of the Company's common stock at the
close of trading on the date of grant.

On October 8, 1999, the Company's Board of Directors approved the
granting of 12,500 options to each non-employee director of the
Company under the 1992 Stock Option Plan for Non-Employee
Directors.  All of the options vest in six months and have an
exercise price of $23.8125 per share, the closing price of the
Company's common stock on October 8, 1999.

9.   Supplemental Cash Flow Information
     ----------------------------------
<TABLE>
<CAPTION>
                                                               Nine Months Ended
                                                                 September 30
                                                       ----------------------------------

                                                           1999                 1998
                                                           ----                 ----
<S>                                                    <C>                 <C>

                                                                 (In Thousands)
CHANGES IN OTHER WORKING CAPITAL ITEMS
  (Net of Effects of Acquisitions and Sales)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Accounts Receivable                                    $ (12,889) 1        $ 184,721
Materials and Supplies Inventory                           4,318             (13,783)
Other Current Assets                                      (2,250)             (7,720)
Accounts Payable                                          98,849            (235,512)
Other Current Liabilities                                (26,851)             15,134
                                                       ---------           ---------
                                                       $  61,177           $ (57,160)
                                                       =========           =========
SUPPLEMENTAL CASH FLOW INFORMATION

Cash Paid During the Period for:
 Interest, Net of Amount Capitalized                   $ 250,598           $ 184,855
                                                       =========           =========
 Distributions on Preferred Capital Trust Securities   $  10,956           $   4,280
                                                       =========           =========
 Income Taxes                                          $   5,449           $  37,877
                                                       =========           =========
1  Reflects the impact of the Company's receivable sale  program,
   see Note 7.

</TABLE>

The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash
equivalents.  "Other, Net," presented as a component of "Net Cash
Flows from Operating Activities" in the accompanying interim
Consolidated Statements of Cash Flows includes, among other
things, the amortization of the gas plant acquisition adjustment
recorded in conjunction with the acquisition of MidCon (see Note
2), equity in undistributed earnings of unconsolidated
subsidiaries and joint ventures and other non-cash charges and
credits to income.

In the third quarter of 1998, the Company purchased interests in
four independent power plants in Colorado from the Thermo
Companies.  Payments for this purchase were made in October 1998
with the Company's common stock and in January and April 1999
with a combination of cash and the Company's common stock.  The
remaining payment is expected to be made with a combination of
cash and the Company's common stock.

<PAGE> 13                                                       Form 10-Q

A portion of the Company's January 1998 acquisition of MidCon was
financed through the assumption of a note.   For additional
information on these transactions, see Note 2.

10.  Business Segments
     -----------------

The Company has segregated its activities into three business
segments, "Upstream", "Midstream" and "Downstream", based on
where in the value stream such activities are conducted.  In
general, these segments are also differentiated by the nature of
their processes, their principal suppliers, and their target
markets and customers.  The Company's Upstream operations consist of
(i) natural gas gathering, (ii) natural gas processing and (iii)
natural gas liquids ("NGLs") extraction and marketing; Midstream
operations consist of transportation, storage and bundled sales
transactions for the Company's interstate and intrastate
pipelines; Downstream operations principally consist of energy
marketing, regulated natural gas distribution and electric power
generation and sales.  The Company expects that, as a result of
its fourth-quarter 1999 acquisition by merger of Kinder Morgan Delaware
and its currently developing plans for disposition of certain
non-core businesses (see  Note 6), its future segment reporting
will be revised.

The accounting policies applied in the generation of segment
information are generally the same as those described in the
summary of significant accounting policies in the Company's
Report on Form 10-K for the year ended December 31, 1998.  In
general, items below the "Operating Income" line are either not
allocated to business segments or are not considered by
Management in its evaluation of business segment performance.  In
addition, certain items included in operating income (such as
general and administrative, merger-related and severance costs
incurred) are not allocated to individual business segments.
With adjustment for these items, the Company currently evaluates
business segment performance primarily based on operating income
in relation to the level of capital employed.  In general,
intersegment sales are accounted for at market prices, while
asset transfers are made at either market value or, in some
instances, book value.   The following table excludes the
operations of en*able, which have been accounted for as
discontinued operations (see Note 6).

<PAGE> 14                                                       Form 10-Q

<TABLE>
<CAPTION>
                                                          Three Months Ended September 30, 1999
                                           --------------------------------------------------------------------
                                             Upstream     Midstream     Downstream      Other      Consolidated
                                             --------     ---------     ----------      -----      ------------
<C>                                        <C>           <C>           <C>           <C>           <C>
                                                                 (In Millions)
Revenues from External Customers           $  166.3      $  401.3      $  891.1                    $1,458.7
Intersegment Revenues                      $   21.4      $   43.8      $  245.6                       310.8

Operating Income (Loss)
  Before Corporate Expenses                $   14.7      $   87.8      $   (2.1)                      100.4
General and Administrative Expenses                                                                   (32.0)
Merger-related and Severance Costs                                                                    (11.0)
Other Income and (Deductions)                                                                         (60.2)
                                                                                                   --------
Loss from Continuing Operations
  Before Income Taxes                                                                              $   (2.8)
                                                                                                   ========

Total Assets at September 30, 1999         $  749.6      $6,400.3      $1,172.3      $   29.9 (1)  $8,352.1

                                                          Three Months Ended September 30, 1998
                                           --------------------------------------------------------------------
                                             Upstream     Midstream     Downstream      Other      Consolidated
                                             --------     ---------     ----------      -----      ------------
                                                                      (In Millions)
Revenues from External Customers           $  120.7      $  339.5      $  586.0                    $1,046.2
Intersegment Revenues                      $   36.0      $   75.2      $   70.6                       181.8

Operating Income Before Corporate
  Expenses                                 $    2.4      $  105.9      $   17.5                       125.8
General and Administrative Expenses                                                                   (32.0)
Other Income and (Deductions)                                                                         (54.0)
                                                                                                   --------
Income from Continuing Operations
  Before Income Taxes                                                                              $   39.8
                                                                                                   ========

                                                           Nine Months Ended September 30, 1999
                                           --------------------------------------------------------------------
                                             Upstream     Midstream     Downstream      Other      Consolidated
                                             --------     ---------     ----------      -----      ------------
                                                                      (In Millions)
Revenues from External Customers           $  412.1      $ 1,024.4     $ 2,267.5                   $3,704.0
Intersegment Revenues                      $   73.3      $   153.1     $   472.8                      699.2

Operating Income Before Corporate
  Expenses                                 $   24.7      $   281.0     $    13.2                      318.9
General and Administrative Expenses                                                                  (103.8)
Merger-related and Severance Costs                                                                    (11.0)
Other Income and (Deductions)                                                                        (190.7)
                                                                                                   --------
Income from Continuing Operations
  Before Income Taxes                                                                              $   13.4
                                                                                                   ========

                                                           Nine Months Ended September 30, 1998
                                           --------------------------------------------------------------------
                                             Upstream     Midstream     Downstream      Other      Consolidated
                                             --------     ---------     ----------      -----      ------------
                                                                      (In Millions)
Revenues from External Customers           $  365.7      $  872.9      $ 2,026.5                   $3,265.1
Intersegment Revenues                      $   81.4      $  216.5      $    86.4                      384.3

Operating Income Before Corporate
  Expenses                                 $    5.5      $  309.6      $    50.7                      365.8
General and Administrative Expenses                                                                   (92.7)
Merger-related and Severance Costs                                                                     (5.8)
Other Income and (Deductions)                                                                        (161.7)
                                                                                                   --------
Income from Continuing Operations
  Before Income Taxes                                                                              $  105.6
                                                                                                   ========

(1) Corporate assets represent cash and restricted deposits.
</TABLE>

<PAGE> 15                                                       Form 10-Q

11.  Financing
     ---------

The total amount of funds required by the Company to complete the
acquisition of MidCon, pay related fees and expenses and to repay
borrowings under the Company's existing credit facility was
approximately $2.5 billion, financed through borrowings under
credit agreements dated January 30, 1998 (the "Bank Facility")
among the Company, Morgan Guaranty Trust Company of New York and
a syndicate of other lenders.  A working capital facility
replaced the revolving credit agreement previously in place (the
"Pre-Acquisition Facility").  An acquisition facility was also
part of the overall Bank Facility structure.  See Note 7(A) of
Notes to Consolidated Financial Statements on pages 42-43 of the
Company's Annual Report on Form 10-K for the year ended December
31, 1998, for additional information regarding the Bank Facility
and the Pre-Acquisition Facility.  In addition to the working
capital and acquisition components of the Bank Facility described
preceding, the Company assumed a short-term note for $1.4 billion
due January 1999 (the "Substitute Note") which, pursuant to the
MidCon Agreement, was initially collateralized by letters of
credit issued under a commitment for that purpose within the Bank
Facility.  The acquisition facility was repaid in its entirety
and canceled on March 10, 1998. The Substitute Note was repaid on
January 4, 1999.  On January 5, 1999, the Company canceled the
remaining letters of credit used to collateralize the Substitute
Note.

In March 1998, the Company received net proceeds of approximately
$624.6 million from a public offering of 12.5 million shares
(18.75 million shares after adjustment for the December 1998
three-for-two stock split) of its common stock and approximately
$2.34 billion from the concurrent public offerings of senior debt
securities of varying maturities with principal totaling $2.35
billion.  The net proceeds from these offerings were used to
refinance borrowings under the Bank Facility and to purchase U.S.
government securities to replace a portion of the letters of
credit that collateralized the Substitute Note.

In April 1998, the Company sold $175 million of 7.63% Capital
Trust Securities (the "Capital Securities") maturing on April 15,
2028, in an underwritten public offering.  The sale was effected
through a wholly owned business trust, K N Capital Trust III.
The Company used the net proceeds from the offering to purchase
U.S. government securities to replace a portion of the letters of
credit that collateralized the Substitute Note.

In November 1998, the Company completed an underwritten public
offering of $400 million of three-year senior notes (the "Senior
Notes") bearing an interest rate of 6.45 percent.  The net
proceeds of approximately $397.4 million were used to retire a
portion of the Company's then-outstanding short-term borrowings.
Concurrently with the Senior Notes offering, the Company sold
$460 million principal amount of premium equity participating
security units ("PEPS") in an underwritten public offering.  The
PEPS essentially are contracts (i) requiring the holders to
purchase the Company's common stock at the end of a three-year
period coinciding with the maturity of the Senior Notes and (ii)
providing for payment of a contract fee of 2.375 percent to the
PEPS holders by the Company during the three-year period.  The
net cash proceeds from the sale of the PEPS, together with
additional funds provided by the Company, were used to purchase
U.S. treasury securities on behalf of the PEPS owners.  For a
description of the accounting for these securities, see Note 7(B)
of Notes to Consolidated Financial Statements on pages 51-53 of
the Company's 1998 Annual Report on Form 10-K.

12.  Preferred Stock
     ---------------

On April 13, 1999, the Company sent notices to holders of its
Class A $5.00 Cumulative Preferred Stock, of its intent to
redeem these shares on May 14, 1999.  Holders of 70,000 preferred
shares were advised that on April 13, 1999, funds were deposited
with the First National Bank of Chicago to pay the redemption
price of $105 per share plus accrued but unpaid dividends.  Under
the terms of the Company's Articles of Incorporation,

<PAGE> 16                                                       Form 10-Q

upon deposit of funds to pay the redemption price, all rights of
the preferred stockholders ceased and terminated except the right
to receive the redemption price upon surrender of their stock
certificates.

13.  Common Stock Split and Dividend Action
     --------------------------------------

On November 9, 1998, the Board of Directors of the Company (the
"Board") approved a 7.1 percent increase in the quarterly
dividend and a three-for-two split of the Company's common stock.
The quarterly dividend was declared at $0.30 per common share, an
increase from $0.28 per common share.  Giving effect to the stock
split, the quarterly dividend is currently $0.20 per common
share.  However, as previously announced, the  Board (prior to
the acquisition by merger of Kinder Morgan Delaware) has
recommended to the post-merger Board that the dividend be
decreased to $0.05 per quarter.  The stock split was distributed
and the increase in dividend was paid concurrently on December
31, 1998, to shareholders of record at the close of business on
December 15, 1998.  The par value of the stock did not change.
Weighted-average shares outstanding and all per share amounts
(except as otherwise noted) in the accompanying interim
consolidated financial statements and these notes have been
restated to reflect the stock split.

14.  Regulatory Matters
     -------------------

On January 23, 1998, K N Interstate Gas Transmission Co. ("KNI"),
a wholly owned subsidiary of Kinder Morgan, filed a general rate
case with the Federal Energy Regulatory Commission ("FERC")
requesting a $30.2 million increase in annual revenues.  As a
result of the FERC's action, KNI was allowed to place its rates
into effect on August 1, 1998, subject to refund, and provisions
for refund have been recorded based on expected ultimate
resolution.  By a subsequent order, the FERC required KNI to
remove costs associated with the Pony Express project and to
refund the associated dollars.  The interim refund, associated
with the ordered removal of the Pony Express facilities' costs
from KNI's rates, amounts to approximately $13 million, and has
yet to be refunded.  KNI has filed for rehearing of the FERC's
orders that addressed Pony Express.  As a result of a settlement
conference held on October, 27, 1999, KNI has filed a
comprehensive Stipulation and Agreement on November 3, 1999,
which, if approved by the FERC, will resolve this
proceeding.

On December 29, 1998, Rocky Mountain Natural Gas Company
("RMNG"), a wholly owned subsidiary of Kinder Morgan, received a
"show cause" order from the Colorado Public Utilities Commission
(the "Commission").  RMNG has reached settlement on the issue,
and a Stipulation and Agreement memorializing the settlement with
the Staff of the Commission and the Office of Consumer Counsel
has been filed and approved.  As part of this settlement, RMNG
agreed to reduce its sales and transportation rates effective
June 1, 1999.  The settled rate reduction is anticipated to
reduce RMNG's annual revenues by approximately $0.9 million per
year.

15.  Comprehensive Income
     --------------------

Statement of Financial Accounting Standards No. 130, "Reporting of
Comprehensive Income," effective for fiscal years beginning after
December 15, 1997, requires that enterprises report a total for
comprehensive income.  Currently, the only difference between
"net income" and "comprehensive income" for the Company is the
unrealized gain or loss on its investment in available-for-sale
securities which is recorded directly to stockholders' equity.
For the quarters ended September 30, 1999 and 1998, the
respective unrealized after-tax investment loss was $(0.5)
million and $(3.8) million, resulting in comprehensive income
(loss) of $(15.0) million and $20.7 million, respectively.  For
the nine month periods ended September 30, 1999 and 1998, the
unrealized after-tax investment gain (loss) was  $2.5 million and
$(4.0) million, resulting in comprehensive income (loss) of
$(7.3) million and $59.6 million, respectively.

<PAGE> 17                                                       Form 10-Q

16.  Accounting for Derivative Instruments and Hedging Activities
     ------------------------------------------------------------

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" (the
"Statement").  The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be
recorded in the balance sheet as either an asset or liability
measured at its fair value.  The Statement requires that changes
in the derivatives' fair value be recognized currently in
earnings unless specific hedge accounting criteria are met.  If
the derivatives meet these criteria, the Statement allows a
derivative's gains and losses to offset related results on the
hedged item in the income statement, and requires that a company
formally designate a derivative as a hedge and document and
assess the effectiveness of derivatives associated with
transactions that receive hedge accounting.

The Statement, as amended by Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FASB
Statement No. 133," is effective for fiscal years beginning after
June 15, 2000.  A company may also implement the Statement as of
the beginning of any fiscal quarter after issuance (that is,
fiscal quarters beginning June 16, 1999 and thereafter).  The
Statement cannot be applied retroactively.  The Statement must be
applied to (i) derivative instruments and (ii) all applicable
derivative instruments embedded in hybrid contracts or, at the
company's election, only those derivatives embedded in hybrid
contracts that were issued, acquired, or substantively modified
after either January 1, 1998 or January 1, 1999.  The Company has
not yet quantified the impacts of adopting the Statement on its
financial position or results of operations and has not
determined the timing of or method of adoption of the Statement.

17.  Interest Expense, Net
     ---------------------
"Interest Expense, Net" as presented in the accompanying interim
Consolidated Statements of Income is net of (i) the debt
component of the allowance for funds used during construction
("AFUDC - Interest") and (ii) interest income related to
government securities associated with the acquisition of MidCon
("Interest Income"), as shown in the following table.

                         Three Months Ended    Nine Months Ended
                            September 30          September 30
                         ------------------    ------------------
                                      (In Millions)

                           1999     1998         1999      1998
                           ----     ----         ----      ----
   AFUDC - Interest        $ 0.8     $ 2.6       $ 1.2     $ 4.3
   Interest Income         $   -     $15.8       $ 0.5     $31.7

As discussed in Note 2, in conjunction with the January 30, 1998,
acquisition of MidCon Corp., the Company was required by the
MidCon Agreement to assume the $1.4 billion Substitute Note and
to collateralize the Substitute Note with bank letters of credit,
a portfolio of U.S. government securities or a combination of the
two.  As a result, the Company had interest income associated
with the issuance of the Substitute Note, which has been reported
together with the related interest expense as described
preceding.

18.  Equity in Earnings of Equity Method Investments
     -----------------------------------------------

Equity in earnings (losses) of investments accounted for under
the equity method totaling $1.3 million and $6.6 million for the
three months ended September 30, 1999 and 1998, and $11.9 million
and $17.8 million for the nine months ended September 30, 1999
and 1998, respectively, are included in operating revenues
(within the

<PAGE> 18                                                       Form 10-Q

appropriate business segment) in the accompanying interim
Consolidated Statements of Income and in the segment data
contained in Note 10.

19.  Accounts Receivable

The caption "Accounts Receivable" in the accompanying interim
Consolidated Balance Sheets is presented net of allowances for
doubtful accounts of $12.5 million at September 30, 1999, and
$10.8 million at December 31, 1998 and, at September 30, 1999, is
net of receivables sold (see Note 7).

20.  Earnings Per Share

Basic earnings or loss from continuing operations per common
share is computed, as applicable, using earnings after reduction
for preferred stock dividends and premiums paid on preferred
stock redemptions.  The number of shares used in basic earnings
per share calculations is the actual weighted average shares
outstanding for each period presented.  Diluted earnings per
share calculations, in addition to the earnings and shares
utilized in computing basic earnings per share, give effect to
the assumed exercise of options (utilizing the treasury stock
method) to the extent that such exercise has a dilutive effect on
the calculation.  The calculation of diluted earnings per share
excludes potential share issuances which would be anti-dilutive
for the periods presented, including (i) options for which the
exercise price exceeds the average market price during the period
and (ii) shares which will be issuable upon maturity of the
Company's outstanding premium equity participating securities
(see Note 11).

21.  Environmental and Legal Matters

(A)  Environmental Matters

On June 17, 1999, the EPA published in the Federal Register a
final rule to limit emissions of hazardous air pollutants
("HAPs") from oil and natural gas production as well as from
natural gas transmission and storage facilities.  This is a
Maximum Achievable Control Technology ("MACT") standard, and is
mandated under section 112 of the 1990 Amendments to the Clean
Air Act.  The MACT standard requires that the affected facilities
reduce emissions of HAPs by 95 percent.  This new standard will
require the Company to achieve this reduction either by process
modifications or by installing new emissions control technology.
The MACT standard will affect the Company and its competitors in
a like manner.  The rule allows most affected sources three years
from the publication date to come into compliance.  The Company
is conducting a detailed analysis of the final rule to determine
its overall effect.  While additional capital costs are likely to
result from this rule, the Company believes that the rule will
not have a material adverse effect on the Company's business,
financial position or results of operations.

See Note 4(A) of Notes to Consolidated Financial Statements on
pages 46-47 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, for additional information regarding
environmental matters.

(B)  Legal Matters

On July 26, 1996, the Company and RMNG, along with over 70 other
natural gas companies, were served by Jack J. Grynberg, acting on
behalf of the Government of the United States, with a Civil False
Claims Act lawsuit filed in Washington, D.C. alleging
mismeasurement of the heating content and volume of natural gas
on Federal and Native American land resulting in underpayment of
royalties to the federal government.  The

<PAGE> 19                                                       Form 10-Q

Company and the other named companies filed a motion to dismiss
the lawsuit on grounds of improper joinder and lack of jurisdiction.
The motion was granted in 1997.  Mr. Grynberg appealed the dismissal
of the action based on improper joinder, and the D.C. Court of Appeals
affirmed the joinder decision in October 1998.  Mr. Grynberg has
now filed over 70 new cases against over 350 defendants in nine
separate Federal Courts.  The action against the Company,
modified somewhat from his original action, was filed in Federal
District Court, District of Colorado, and the Company was served
in this action on May 25, 1999.  The Department of Justice
decided not to intervene in these cases in support of Grynberg's
complaint. On October 21, 1999, the Panel on the Multi-District
Litigation consolidated all of these cases in the Federal
District Court of Wyoming.

On September 23, 1999, a complaint styled as the First Amended
Class Action Petition regarding "Quinque Operating Company, et al.
v. Gas Pipelines, et al.," Case No. 99-C-30, Stevens County
District Court, Kansas, was filed.  The complaint names over 200
natural gas companies including the Company, K N Interstate Gas
Transmission Co., K N Natural Gas, Inc., MidCon Corporation,
MidCon Gas Services Corporation, MidCon Marketing Corporation,
MidCon Texas Pipeline Operator, Inc., Natural Gas Pipeline
Company of America, Northern Gas Company, Rocky Mountain Natural
Gas Company, TCP Gathering Company, and Westar Transmission Co.
The complaint contains allegations of mismeasurement of the
heating content and volume of natural gas on non-Federal and non-
Native American lands similar to the allegations contained in the
above-referenced False Claim Act lawsuit dealing with Federal and
Native American land. On September 24, 1999, Defendant Northern
Natural Gas Company filed a Notice of Removal to the United
States District Court for the District of Kansas, Case No. 99-
1390-MLB.  Subsequently, Defendants notified the Panel on Multi-
District Litigation of the existence of this case and requested
that it be consolidated as a "tag-a-long" action with the above-
referenced False Claim Act case in Wyoming.

The Company believes it has meritorious defenses to all lawsuits
and legal proceeds in which it is a defendant and will vigorously
defend against them.  Based on its evaluation of the above
matters, and after consideration of reserves established, the
Company believes that the resolution of such matters will not
have a material adverse effect on the Company's business,
financial position or results of operations.

See Note 4(B) of Notes to Consolidated Financial Statements on
pages 47-48 of the Company's Annual Report on Form 10-K for the
year ended December 31, 1998, for additional information regarding
legal matters.


<PAGE> 20                                                       Form 10-Q

Item 2.  Management's Discussion and Analysis of Financial
Condition and Results of Operations

General
-------

The following discussion should be read in conjunction with (i)
the accompanying interim Consolidated Financial Statements and
related Notes and (ii) the Consolidated Financial Statements,
related Notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations included in the
Company's 1998 Report on Form 10-K.  Due to the seasonal
variation in energy demand, among other factors, the interim
results which follow may not be indicative of the results to be
expected for an entire year.  As discussed in Notes 2 and 5 of
Notes to the accompanying interim Consolidated Financial
Statements, the Company has engaged in acquisition and
divestiture transactions (and may engage in additional such
transactions) which may affect the comparison of results of
operations between periods.  All per share amounts following
reflect the impact of the December 31, 1998, three-for-two common
stock split.

Certain information contained herein may include forward-looking
statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934.  Although the Company believes that these statements are
based upon reasonable assumptions, it can give no assurance that
its goals will be achieved.  Important factors that could cause
actual results to differ materially from those in the forward-
looking statements contained herein include, among other factors,
the pace of deregulation of retail natural gas and electricity
markets in the United States, federal, state and international
regulatory developments, the timing and extent of changes in
commodity prices for oil, natural gas, natural gas liquids
("NGLs"), electricity, certain agricultural products and interest
rates, the extent of success in acquiring natural gas facilities,
the timing and success of efforts to develop power, pipeline and
other projects, political developments in foreign countries,
weather-related factors, the Company's success in implementing
the Year 2000 Plan described elsewhere herein, the effectiveness
of the Year 2000 Plan and the Year 2000 readiness of vendors and
suppliers and conditions of capital markets and equity markets
during the periods covered by the forward-looking statements.
All of these factors are difficult to predict and many are beyond
the Company's control.

On July 8, 1999, the Company announced the signing of an
agreement and plan of merger to acquire Kinder Morgan Delaware.
On October 7, 1999, this merger was completed. Pursuant to the
terms of the merger agreement, the Company issued approximately
41.5 million shares of common stock in return for all of the
outstanding shares of Kinder Morgan Delaware.  On October 7,
1999, the Company issued 200,000 shares of common stock, par
value of $5.00 per share, of the Company to Petrie Parkman
(the ("Petrie Shares") pursuant to the terms of the engagement
letter between Petrie Parkman and the Company dated as of June
24, 1999, as amended as of August 20, 1999, in consideration
for Petrie Parkman's advisory services rendered in connection
with the acquisition of Kinder Morgan Delaware.  The issuance of
the Petrie Shares was exempt from registration under Section
4(2) of the Securities Act of 1933, as amended.  Upon
closing of the transaction, Richard D. Kinder, Chairman
and Chief Executive Officer of Kinder Morgan Delaware, was
named Chairman and Chief Executive Officer of the Company, and the
Company was renamed Kinder Morgan, Inc. (see Note 2 of Notes to
the accompanying interim Consolidated Financial Statements).  In
conjunction with the merger, the Company has announced plans
intended to increase profitability and decrease leverage, see
"Plan for the Combined Kinder Morgan" elsewhere herein and Note 6
of Notes to the accompanying interim Consolidated Financial Statements.

During the third quarter, the Company adopted a plan to
discontinue the direct marketing of non-energy products and
services (principally under the "Simple Choice" brand), which
activities had been carried on

<PAGE> 21                                                       Form 10-Q

largely through the Company's en*able joint venture with PacifiCorp
(see Note 6 of Notes to the accompanying interim Consolidated
Financial Statements and "Discontinued Operations" elsewhere herein).

Consolidated Financial Results
------------------------------
<TABLE>
<CAPTION>
                                 Three Months Ended September 30       Nine Months Ended September 30
                                ----------------------------------   ----------------------------------
                                                 (In Millions Except Per Share Amounts)
                                                         Increase                             Increase
                                   1999        1998     (Decrease)      1999        1998     (Decrease)
                                   ----        ----     ----------      ----         ----    ----------
<S>                             <C>         <C>         <C>          <C>         <C>         <C>

Operating Revenues              $1,458.7    $1,046.2    $ 412.5      $3,704.0    $3,265.1    $ 438.9
Gross Margin                       225.1       253.9      (28.8)        708.1       738.1      (30.0)
Operating Income                    57.4        93.8      (36.4)        204.1       267.3      (63.2)
Income (Loss) From Continuing
  Operations                        (1.7)       25.1      (26.8)          8.2        66.5      (58.3)
Loss From Discontinued
  Operations,
  Net of Tax                        (1.3)       (0.6)      (0.7)         (6.5)       (2.8)      (3.7)
Loss on Disposal of
Discontinued
  Operations, Net of Tax           (11.5)          -      (11.5)        (11.5)          -      (11.5)
Diluted Earnings (Loss) Per
  Share:
  Continuing Operations            (0.02)       0.37      (0.39)         0.11        1.05      (0.94)
  Discontinued Operations          (0.02)      (0.01)     (0.01)        (0.09)      (0.05)     (0.04)
  Disposal of Discontinued
  Operations                    $  (0.16)   $      -    $ (0.16)     $  (0.17)   $      -    $ (0.17)

</TABLE>

In comparison to the corresponding period of 1998, the Company's
consolidated results of continuing operations for the three
months ended September 30, 1999, reflect an increase of 39.4
percent in operating revenues and a decrease of 11.3 percent in
gross margin.  Additionally, 1999 results reflect decreases of
27.2 percent in operating income and 80.1 percent in income from
continuing operations, in each case before the reduction, in
1999, for merger-related and severance costs.  Diluted earnings
per common share from continuing operations of $(0.02) for 1999
represented a decline of $0.39 from 1998, reflecting, in addition
to the decline in 1999 income from continuing operations, an
increase of 4.3 percent in the number of diluted shares used to
calculate earnings per share. This increase in shares was largely
due to the issuance of 3.1 million shares as partial
consideration for the purchase of interests in power plants from
the Thermo Companies (see Note 2 of Notes to the accompanying
interim Consolidated Financial Statements).

In comparison to the corresponding period of 1998, the Company's
consolidated results of continuing operations for the nine months
ended September 30, 1999, reflect an increase of 13.4 percent in
operating revenues and a decrease of 4.1 percent in gross margin.
Additionally, 1999 results reflect decreases of 21.2 percent in
operating income and 78.8 percent in income from continuing
operations, in each case before the reduction in 1999 and 1998,
for merger-related and severance costs.  Diluted earnings per
common share from continuing operations for 1999 declined by 89.5
percent from 1998 reflecting, in addition to the decline in 1999
income from continuing operations, an increase of 11.4 percent in
the number of diluted shares used to calculate earnings per
share. This increase in shares was largely due to (i) the March
1998 common stock issuance associated with the acquisition of
MidCon (see Notes 2 and 11 of Notes to the accompanying interim
Consolidated Financial Statements) and (ii) the issuance of 3.1
million shares as partial consideration for the purchase of
interests in power plants from the Thermo Companies as described
preceding.

Operating income or loss for each of the Company's business
segments, as well as corporate expenses, interest expense, other
income and deductions and income taxes were affected by various
factors which are described within the corresponding individual
discussions which follow, see "Upstream Gathering and
Processing," "Midstream Sales, Transportation and Storage,"
"Downstream Retail and Marketing," "Corporate Expenses," "Other
Income and (Deductions)" and "Income Taxes on Continuing
Operations" elsewhere herein.

<PAGE> 22                                                       Form 10-Q

Results of Continuing Operations

The Company has segregated its results of operations into
"Upstream," "Midstream" and "Downstream" components.  The
Company's Upstream operations consist of (i) natural gas
gathering, (ii) natural gas processing and (iii) NGLs extraction
and marketing activities.  Midstream operations consist of
transportation, storage and bundled sales transactions for the
Company's interstate and intrastate pipelines.  Downstream
activities principally consist of energy marketing, regulated
natural gas distribution and electric power generation and sales.
The following segment data are before intersegment eliminations,
and exclude discontinued operations, general and administrative
expenses and severance and expenses related to the 1998 MidCon
acquisition and the acquisition of Kinder Morgan Delaware.  The
Company expects that, as a result of the fourth-quarter
acquisition of Kinder Morgan Delaware and its plans for
disposition of certain non-core businesses, its future segment
reporting will be revised (see Note 10 of Notes to the
accompanying interim Consolidated Financial Statements).

<TABLE>
<CAPTION>
                                     Three Months Ended September 30      Nine Months Ended September 30
                                    ---------------------------------    --------------------------------
                                               (Dollars in Millions Except Per Gallon Amounts)
                                                             Increase                            Increase
Upstream Gathering and Processing      1999        1998     (Decrease)     1999        1998     (Decrease)
---------------------------------      ----        ----     ----------     ----        ----     ----------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>
Operating Revenues
  Gas Sales                         $  59.4     $  55.4     $   4.0     $ 171.5     $ 154.5     $  17.0
  Natural Gas Liquids Sales            91.0        67.3        23.7       208.3       193.0        15.3
  Gathering and Other                  37.3        34.0         3.3       105.6        99.6         6.0
                                    -------     -------     -------     -------     -------     -------
                                      187.7       156.7        31.0       485.4       447.1        38.3
  Less - Gas Purchases and Other
Costs of Sales                        140.7       123.1        17.6       366.2       342.5        23.7
                                    -------     -------     -------     -------     -------     -------
Gross Margin                           47.0        33.6        13.4       119.2       104.6        14.6
                                    -------     -------     -------     -------     -------     -------

Operating Expenses
  Operations and Maintenance           22.7        21.0         1.7        65.7        69.9        (4.2)
  Depreciation and Amortization         7.0         7.0           -        20.7        19.9         0.8
  Taxes, Other Than Income Taxes        2.6         3.2        (0.6)        8.1         9.3        (1.2)
                                    -------     -------     -------     -------     -------     -------
                                       32.3        31.2         1.1        94.5        99.1        (4.6)
                                    -------     -------     -------     -------     -------     -------
Operating Income Before Corporate
  Expenses                          $  14.7     $   2.4     $  12.3     $  24.7     $   5.5     $  19.2
                                    =======     =======     =======     =======     =======     =======

Systems Throughput (Trillion Btus)
  Gas Sales                            23.8        30.3        (6.5)       87.5        79.8         7.7
  Gathering                            84.0        90.1        (6.1)      249.8       262.8       (13.0)
                                    -------     -------     -------     -------     -------     -------
                                      107.8       120.4       (12.6)      337.3       342.6        (5.3)
                                    =======     =======     =======     =======     =======     =======
Natural Gas Liquids Sales
    Sales (Million Gallons)           237.5       254.7       (17.2)      679.6       672.8         6.8
                                    =======     =======     =======     =======     =======     =======
    Average Sales Price/Gallon      $  0.38     $  0.26     $  0.12     $  0.31     $  0.29     $  0.02
                                    =======     =======     =======     =======     =======     =======

</TABLE>

Upstream's operating income before corporate expenses improved by
$12.3 million from $2.4 million for the three months ended
September 30, 1998, to $14.7 million for the third quarter of
1999.  The Upstream segment was positively impacted in 1999,
relative to 1998, by (i) approximately $12 million of increased
processing margins resulting largely from higher NGLs prices,
(ii) the fact that 1998 results included operating losses
associated with gas processing facilities that were sold in the
fourth quarter of 1998 and (iii) improved 1999 basis
differentials on the Pony Express Pipeline which positively
affected joint venture marketing activities. These positive
impacts were partially offset by approximately $3 million of
increased 1999 operations, maintenance and depreciation expenses
associated with the Company's remaining gathering and processing
systems.

Upstream's operating income before corporate expenses improved by
$19.2 million from $5.5 million for the nine months ended
September 30, 1998, to $24.7 million for the first nine months of
1999.  The Upstream segment was positively affected in 1999,
relative to 1998, by (i) approximately $13 million of increased

<PAGE> 23                                                      Form 10-Q

processing margins resulting largely from higher NGLs prices,
(ii) the fact that 1998 results included operating losses
associated with gas processing facilities that were sold in the
fourth quarter of 1998 and (iii) increased 1999 gathering
revenues resulting primarily from higher rates.  These positive
impacts were partially offset by approximately $1.5 million of
reduced 1999 operating income from the Company's K N Field
Services and Compressor Pump & Engine subsidiaries.

<TABLE>
<CAPTION>
                                     Three Months Ended September 30      Nine Months Ended September 30
                                    ---------------------------------   ---------------------------------
                                                            (Dollars in Millions)

Midstream Sales, Transportation
-------------------------------                              Increase                            Increase
  and Storage                          1999        1998     (Decrease)     1999        1998     (Decrease)
  -----------                          ----        ----     ----------     ----        ----     ----------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>
Operating Revenues
  Transportation and Storage        $ 149.9     $ 169.8     $ (19.9)    $ 475.1     $ 477.9     $  (2.8)
  Gas Sales                           292.6       237.9        54.7       688.7       594.1        94.6
  Other                                 2.6         7.0        (4.4)       13.7        17.4        (3.7)
                                    -------     -------     -------     -------     -------     -------
                                      445.1       414.7        30.4     1,177.5     1,089.4        88.1
  Less - Gas Purchases and Other
Costs of Sales                        276.5       218.3        58.2       637.0       541.7        95.3
                                    -------     -------     -------     -------     -------     -------
Gross Margin                          168.6       196.4       (27.8)      540.5       547.7        (7.2)
                                    -------     -------     -------     -------     -------     -------

Operating Expenses
  Operations and Maintenance           40.6        39.3         1.3       114.0       101.3        12.7
  Depreciation and Amortization        30.7        41.8       (11.1)      116.9       111.3         5.6
  Taxes, Other Than Income Taxes        9.5         9.4         0.1        28.6        25.5         3.1
                                    -------     -------     -------     -------     -------     -------
                                       80.8        90.5        (9.7)      259.5       238.1        21.4
                                    -------     -------     -------     -------     -------     -------

Operating Income Before Corporate
  Expenses                          $  87.8     $ 105.9     $ (18.1)    $ 281.0     $ 309.6     $ (28.6)
                                    =======     =======     =======     =======     =======     =======

Systems Throughput (Trillion Btus)    648.4       604.2        44.2     1,924.9     1,691.7       233.2
                                    =======     =======     =======     =======     =======     =======
</TABLE>

Midstream operating income before corporate expenses decreased by
$18.1 million from $105.9 million for the three months ended
September 30, 1998, to $87.8 million for the third quarter of
1999.   The Midstream segment was negatively impacted in 1999,
relative  to 1998, by (i) approximately $42 million of decreased
margins, primarily from the segment's interstate  pipeline
systems, due to reduced per unit margins and (ii) increased
operations and maintenance expenses.  The reduced margins were
largely due to decreased basis differentials resulting
principally from the two recent mild  winters, including the
resultant high levels of gas in underground storage.  In
addition, competitive pressures have increased in Midwest markets
due to actual or projected increased supply.  These negative
impacts were partially offset by the positive impacts of (i)
approximately $19 million of increased margins attributable to
increased 1999 throughput volumes and (ii) reduced depreciation
and amortization expense, largely attributable to the change in
the amortization period for the gas plant acquisition adjustment
recorded in conjunction with the acquisition of MidCon (see  Note
4 of Notes to the accompanying interim Consolidated Financial
Statements).  The businesses included in this segment will be
affected in the future by, among other factors, the September 30,
1999  sale of the Company's interest in Stingray Pipeline Company
LLC (see Note 5 of Notes to the accompanying interim consolidated
financial statements) and the sale of certain NGPL transportation
capacity to Aquila Energy as announced on September 27, 1999.

Midstream operating income before corporate expenses decreased by
$28.6 million from $309.6 million for the nine months ended
September 30, 1998, to $281.0 million for the first nine months
of 1999.  The Midstream segment was negatively impacted in 1999,
relative to 1998, primarily by reduced per unit margins due to
the factors described preceding.  This impact was partially
offset by (i) the fact that 1999 results include nine months of
the operations of MidCon, while 1998 results include only eight
months, (ii) increased 1999 throughput and (iii) the reduction in
the 1999 depreciation and amortization rate beginning in the
third quarter as described preceding.

<PAGE> 24                                                       Form 10-Q

<TABLE>
<CAPTION>
                                     Three Months Ended September 30      Nine Months Ended September 30
                                    ---------------------------------   ---------------------------------
                                                            (Dollars in Millions)
                                                             Increase                            Increase
Downstream Retail and Marketing        1999        1998     (Decrease)     1999        1998     (Decrease)
-------------------------------        ----        ----     ----------     ----        ----     ----------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>
Operating Revenues
  Gas Sales                         $1,114.9    $ 615.6     $ 499.3     $2,671.4    $2,042.8    $ 628.6
  Transportation and Other              21.8       41.0       (19.2)        68.9        70.1       (1.2)
                                    --------    -------     -------     --------    --------    -------
                                     1,136.7      656.6       480.1      2,740.3     2,112.9      627.4
  Less - Gas Purchases and Other
Costs of Sales                       1,124.8      626.2       498.6      2,684.5     2,018.7      665.8
                                    --------    -------     -------     --------    --------    -------
Gross Margin                            11.9       30.4       (18.5)        55.8        94.2      (38.4)
                                    --------    -------     -------     --------    --------    -------

Operating Expenses
  Operations and Maintenance            9.2         6.9         2.3         27.6        27.6          -
  Depreciation and Amortization         3.3         4.2        (0.9)        10.4        11.0       (0.6)
  Taxes, Other Than Income Taxes        1.5         1.8        (0.3)         4.6         4.9       (0.3)
                                    --------    -------     -------     --------    --------    -------
                                       14.0        12.9         1.1         42.6        43.5       (0.9)
                                    --------    -------     -------     --------    --------    -------


Operating Income (Loss) Before
  Corporate Expenses                $  (2.1)    $  17.5     $ (19.6)    $   13.2    $   50.7    $ (37.5)
                                    =======     =======     =======     ========    ========    =======

Gas Sales (Trillion Btus)             438.1       325.3       112.8      1,210.2       936.7      273.5
                                    =======     =======     =======     ========    ========    =======

</TABLE>

Downstream's operating results before corporate expenses
decreased by $19.6 million from $17.5 million of income for the
three months ended September 30, 1998, to a loss of $2.1 million
for the third quarter of 1999.   Downstream results were
negatively impacted in 1999, relative to 1998, by (i)
approximately $8.6 million of reduced sales and transport margins
from retail gas distribution, primarily due to the weather-
related reduction in 1999 irrigation demand, (ii) reduced 1999
per unit margins from commodity marketing resulting from lower
1999 demand for relatively high margin electric generation and
irrigation load in the Texas market areas, (iii)  higher
operations and maintenance expenses related to the Nebraska
Choice Gas program and (iv) higher fuel and maintenance costs at
the Company's electric generating facilities.  In April 1999,
Commodity Marketing became a principal gas supplier to Texas
intrastate affiliate pipelines, which resulted in a 35 percent
increase in third quarter 1999 sales volumes.

Downstream's operating income before corporate expenses decreased
by $37.5 million from $50.7 million for the nine months ended
September 30, 1998 to $13.2 million for the first nine months of
1999.  Downstream results were negatively impacted in 1999,
relative to 1998, by (i) approximately $10 million of reduced
margins from commodity marketing, (ii) approximately $17 million
of reduced margins from retail gas sales and transportation, due
primarily to weather-related factors, lower unit  margins
resulting from the Nebraska Choice Gas program and adjustments to
deferred purchased  gas costs and (iii) the inclusion in 1998
earnings of (a) $5.4 million in margins from sales of storage
gas, (b) income related to the favorable resolution of certain
above market gas purchase contracts and (c) first quarter 1998
operating income from the Company's Kansas gas distribution
properties which were sold on March 31, 1998.   These negative
impacts were partially offset by income from the Thermo assets in
1999 (see Note 2 of Notes to the accompanying interim
Consolidated Financial Statements).  As noted  above,  the
significant increase in 1999 gas sales volumes reflects Commodity
Marketing's role as a gas supplier to Texas intrastate
affiliates; additionally, 1998 volumes include only eight months
of MidCon commodity marketing activity.

<TABLE>
<CAPTION>
                                     Three Months Ended September 30        Nine Months Ended September 30
                                    ----------------------------------   ----------------------------------
                                                                 (In Millions)
                                                             Increase                              Increase
Corporate Expenses                    1999         1998     (Decrease)       1999        1998     (Decrease)
------------------                    ----         ----     ----------       ----        ----     ----------
<S>                                 <C>          <C>          <C>         <C>         <C>           <C>
General and Administrative          $ 32.0       $ 32.0       $    -      $ 103.8     $  92.8       $ 11.0
Merger-related and Severance Costs    11.0            -         11.0         11.0         5.8          5.2
                                    ------       ------       ------      -------     -------       ------
                                    $ 43.0       $ 32.0       $ 11.0      $ 114.8     $  98.6       $ 16.2
                                    ======       ======       ======      =======     =======       ======
</TABLE>

<PAGE> 25                                                       Form 10-Q

The merger-related and severance costs in 1999 represent costs
(principally severance) related to the K N Energy, Inc.
acquisition by merger of Kinder Morgan Delaware.  The merger-
related and severance costs in 1998 represent costs related to
the MidCon acquisition.  See Note 2 of Notes to the accompanying
interim Consolidated Financial Statements for more information
regarding these business combinations.  The increase in general
and administrative expenses for the nine months ended September
30, 1999, over the same period in 1998, was due principally to
(i) the fact that 1999 results include nine months of the
operations of MidCon, while 1998 results include only eight
months and (ii) reduced 1999 capitalization of overhead due to a
reduced level of capital spending.

<TABLE>
<CAPTION>
                                     Three Months Ended September 30       Nine Months Ended September 30
                                    ----------------------------------   ----------------------------------
                                                                 (In Millions)
                                                             Earnings                              Earnings
                                                             Increase                              Increase
Other Income and (Deductions)         1999         1998     (Decrease)       1999        1998     (Decrease)
-----------------------------         ----         ----     ----------       ----        ----     ----------
<S>                                 <C>          <C>          <C>         <C>         <C>           <C>
Interest Expense, Net               $(69.8)      $(64.5)      $ (5.3)     $(210.5)    $(178.3)      $(32.2)
Minority Interests                    (5.6)        (4.4)        (1.2)       (16.8)      (11.4)        (5.4)
Other, Net                            15.2         14.9          0.3         36.6        28.0          8.6
                                    ------       ------       ------      -------     -------       ------
                                    $(60.2)      $(54.0)      $ (6.2)     $(190.7)    $(161.7)      $(29.0)
                                    ======       ======       ======      =======     =======       ======

</TABLE>

The increase of $5.3 million in "Interest Expense, Net" for the
three months ended September 30, 1999, over the corresponding
period of 1998, was largely due to the cumulative impact of
reduced 1998 and 1999 cash flows from operations and associated
increases in debt levels, resulting from the depressed pricing
environment and unfavorable weather experienced during the twelve
months ended September 30, 1999, as described preceding.  The
factors were partially offset by decreased capital spending and
increased proceeds from asset sales, see "Liquidity and Capital
Resources" elsewhere herein.  The increase in net expense
associated with "Minority Interests" in 1999, relative to 1998,
principally reflects improved operating results from the
Company's 55 percent-owned Wildhorse joint venture.  The minor
increase in "Other, Net" from 1998 to 1999 was principally due to
the net impact of (i) the September 1999 pre-tax gain of $11.4
million from the sale of the Company's interest in the Stingray
Pipeline Company, L.L.C. and West Cameron Dehydration Company,
L.L.C. and (ii) the September 1998 pre-tax gain of $10.9 million
from the Company's sale of certain microwave towers and
associated facilities.

The increase of $32.2 million in "Interest Expense, Net" for the
nine months ended September 30, 1999, over the corresponding
period of 1998, was largely due to the factors affecting the
quarters as described preceding, and to the financing associated
with the January 30, 1998 acquisition of MidCon.  The increase in
net expense associated with "Minority Interests" in 1999,
relative to 1998, was principally due to dividend requirements
associated with the $175 million of Capital Trust Securities
issued in April 1998 (see Note 11 of Notes to the accompanying
interim Consolidated Financial Statements).  The $8.6 million
increase in "Other, Net" from 1998 to 1999 was principally due to
the net impact of  (i) the June, 1999 pre-tax gain of  $17.5
million from the sale of the Company's interests in the HIOS and
UTOS offshore pipeline systems, (ii) the September, 1999 pre-tax
gain of $11.4 million from the sale of the Company's interest in
Stingray Pipeline Company, L.L.C. and West Cameron Dehydration
Company, L.L.C., (iii) the March 1998 pre-tax gain of $8.5
million from the Company's sale of its Kansas natural gas
distribution properties and (iv) the September 1998 pre-tax gain
of $10.9 million from the Company's sale of certain microwave
towers and facilities.

<TABLE>
<CAPTION>
                                 Three Months Ended September 30       Nine Months Ended September 30
                                ----------------------------------   ----------------------------------
                                                         (Dollars In Millions)
Income Taxes on Continuing
--------------------------                               Increase                             Increase
  Operations                       1999        1998     (Decrease)      1999        1998     (Decrease)
  ----------                       ----        ----     ----------      ----        ----     ----------
<S>                              <C>         <C>         <C>          <C>         <C>          <C>
    Provision (Benefit)          $ (1.1)     $ 14.7      $ (15.8)     $  5.2      $ 39.1       $(33.9)
                                 ======      ======      =======      ======      ======       ======
    Effective Tax Rate             39.0%       37.0%         2.0%       39.0%       37.0%         2.0%
                                 ======      ======      =======      ======      ======       ======

</TABLE>

<PAGE> 26                                                       Form 10-Q

The $15.8 million net decrease in income tax expense from
continuing operations for the three months ended September 30,
1999 from the corresponding period of 1998 is principally
attributable to the decrease in 1999 pre-tax income.

The $33.9 million net decrease in income tax expense from
continuing operations for the nine months ended September 30,
1999 from the corresponding period of 1998 reflected a decrease
of approximately $34.1 million attributable to a decrease in 1999
pre-tax income and an increase of approximately $0.2 million
attributable to a change in the effective tax rate.

Discontinued Operations
-----------------------

During the third quarter, the Company adopted a plan to
discontinue the direct marketing of non-energy products and
services (principally under the "Simple Choice" brand), which
activities had been carried on largely through the Company's
en*able joint venture with PacifiCorp (see Note 6 of Notes to the
accompanying interim Consolidated Financial Statements). The
principal assets of this discontinued line of business remaining
as of September 30, 1999 consisted of an investment in en*able and
an indirect investment in Orcom Solutions (a provider of custom
software and outsource billing solutions for utilities and a
wholly owned subsidiary of en*able).  The results of these
operations and projected costs of disposal, net of tax, have been
reported under the captions "Loss from Discontinued Operations"
and "Loss on Disposal of Discontinued Operations," respectively,
in the accompanying interim Consolidated Statements of Income.

The Company currently expects that it will record additional
charges to discontinued operations in the fourth quarter of 1999,
see Note 6 of Notes to the accompanying interim Consolidated
Financial Statements.

Liquidity and Capital Resources
-------------------------------

The following table illustrates the sources of the Company's
invested capital.  These balances reflect the incremental capital
associated with the acquisition of MidCon, including the post-
acquisition refinancings completed in 1998 (see Notes 2 and 11 of
Notes to the accompanying interim Consolidated Financial
Statements).  The Company's capital structure will change
materially from that shown as of September 30, 1999, as a result
of common stock issued in conjunction with the Company's October
7, 1999 acquisition of Kinder Morgan Delaware (see Note 2 of
Notes to the accompanying Interim Consolidated Financial
Statements).

<PAGE> 27                                                       Form 10-Q

<TABLE>
<CAPTION>
                                     September 30                         December 31
                              --------------------------   -----------------------------------------
                                                      (Dollars in Thousands)
                                  1999          1998           1998          1997          1996
                                  ----          ----           ----          ----          ----
<S>                           <C>           <C>            <C>           <C>           <C>
Long-Term Debt                $3,298,484    $ 2,905,688    $ 3,300,025   $   553,816   $   423,676
Common Equity                  1,223,958      1,263,544      1,216,821       606,132       519,794
Preferred Stock                        -          7,000          7,000         7,000         7,000
Capital Trust Securities         275,000        275,000        275,000       100,000             -
                              ----------    -----------    -----------   -----------   -----------
  Capitalization               4,797,442      4,451,232      4,798,846     1,266,948       950,470
Short-Term Debt                  585,867      2,167,297 1    1,702,013 1     359,951       156,271
                              ----------    -----------    -----------   -----------   -----------
  Invested Capital            $5,383,309    $ 6,618,529    $ 6,500,859   $ 1,626,899   $ 1,106,741
                              ==========    ===========    ===========   ===========   ===========
Capitalization:
---------------
  Long-Term Debt                   68.8%          65.2%          68.8%         43.7%         44.6%
  Common Equity                    25.5%          28.4%          25.4%         47.8%         54.7%
  Preferred Stock                     -            0.2%           0.1%          0.6%          0.7%
  Capital Trust Securities          5.7%           6.2%           5.7%          7.9%            -

Invested Capital:
-----------------
  Total Debt                       72.2%          76.6%          76.9%         56.2%         52.4%
  Equity, Including Capital
   Trust Securities                27.8%          23.4%          23.1%         43.8%         47.6%

(1)Includes the $1,394,846 Substitute Note assumed in
  conjunction with the acquisition of MidCon, which Note was repaid
  in January 1999.

</TABLE>

The following discussion of cash flows should be read in
conjunction with the accompanying Consolidated Statements of Cash
Flows and related supplemental disclosures.

Net Cash Flows From Operating Activities
----------------------------------------

The net cash inflow from operating activities increased from $3.1
million for the nine months ended September 30, 1998, to $123.5
million for the first nine months of 1999, an increase of
$120.4 million.  Excluding the impact of discontinued operations,
cash flow increased by $124.3 million, from $11.9 million in 1998
to $136.2 million in 1999.  These increases are primarily
attributable to the net impact of (i) the September 1999 sale of
$150 million of accounts receivable (see Note 7 of Notes to the
accompanying Consolidated Financial Statements), (ii)
approximately $82 million of increased 1999 cash flow from
changes in levels of gas in underground storage, (iii) the
inclusion in 1998 results of $27.5 million of proceeds from the
buyout of certain contractual gas purchase obligations, (iv)
increased 1999 interest payments and (v) the decrease in 1999
earnings before non-cash charges and credits.

Net Cash Flows From Investing Activities
----------------------------------------

The net cash inflow from investing activities for the nine months
ended September 30, 1999, consisted principally of (i) $1.1
billion of proceeds from the sale of U.S. government securities,
which were used, together with additional short-term borrowings,
to repay the Substitute Note (see "Net Cash Flows From Financing
Activities" following), (ii) $170.7 million of net cash outflows
for capital expenditures, acquisitions and investments, (iii)
proceeds of $28.7 million from the sale of Tom Brown, Inc.
preferred stock and (iv) $89.6 million of proceeds from sales of
other assets.  The net cash outflow from investing activities for
the nine months ended September 30, 1998 consisted principally of
(i) $2.2 billion in cash paid to Occidental for the purchase of
MidCon, (ii) net purchases of $1.1 billion of U.S. government
securities as collateral for the Substitute Note and as
collateral for the Thermo purchase obligation, (iii) $239.8
million of net cash outflows for capital expenditures, other
acquisitions and investments and (iv) $28.8 million of proceeds
from sales of other assets.

<PAGE> 28                                                        Form 10-Q

On August 3, 1999, the Company announced plans to divest itself
of certain non-strategic assets.  In addition, the Company
continues to evaluate its asset base for potential additional
divestitures, (see Note 6 of Notes to the accompanying interim
Consolidated Financial Statements).

Net Cash Flows From Financing Activities
----------------------------------------

The net cash outflow for financing activities for the nine months
ended September 30, 1999, was principally attributable to the
January 4, 1999, repayment of the Substitute Note (see Notes 2
and 11 of Notes to the accompanying interim Consolidated
Financial Statements).  The note was repaid using the proceeds of
approximately $1.1 billion from the sale of U.S. government
securities which had been held as collateral, with the balance of
the funds provided by an increase in short-term borrowings.  In
addition, 1999 cash flows include (i) the payment of $42.5
million of common and preferred dividends, (ii) the payment of
$7.4 million to redeem preferred stock, (iii) payments of $5.2
million for the retirement of long-term debt and (iii) receipt of
$5.6 million for common stock issued.  The Company has announced
the fact that future dividends are expected to decrease, see
"Plan for the Combined Kinder Morgan" elsewhere herein.

The net cash inflow from financing activities of $3.5 billion for
the nine months ended September 30, 1998, was principally the
result of financing activities in conjunction with the purchase
of MidCon (see Notes 2 and 11 of Notes to the accompanying
interim Consolidated Financial Statements).  In March 1998, the
Company issued 12.5 million shares (18.75 million shares after
adjustment for the December 1998 three-for-two stock split) of
common stock in an underwritten public offering, receiving net
proceeds of approximately $624.6 million.  Also in March 1998,
the Company issued $2.35 billion principal amount of debt
securities of varying maturities and interest rates in an
underwritten public offering, receiving net proceeds of
approximately $2.34 billion.  The net proceeds from these two
offerings were used to refinance borrowings under the MidCon
acquisition financing arrangements and to purchase U.S.
government securities to collateralize a portion of the
Substitute Note.  In April 1998, the Company sold $175 million of
7.63% Capital Securities due April 15, 2028, in an underwritten
offering, with the net proceeds of $173.1 million used to
purchase U.S. government securities to further collateralize the
Substitute Note.  In addition, 1998 results include (i) the
payment of $37.9 million of common and preferred dividends, (ii)
payments of $23.6 million to retire long-term debt, (iii) receipt
of $11.7 million for other common stock issued, and (iv) $16.8
million of minority interest contributions.

The Company's principal sources of short-term liquidity are its
revolving bank facilities totaling $1 billion.  At September 30,
1999, the Company had $578.7 million of bank borrowings and
commercial paper (which is backed by the bank facilities) issued
and outstanding.  The corresponding amount outstanding was $606.4
million at October 22, 1999.  After inclusion of applicable
letters of credit, the remaining available borrowing capacity
under the bank facilities was $405.5 million and $377.8 million
at September 30, 1999 and October 22, 1999, respectively.  As
described in the Company's Report on Form 10-K for the year ended
December 31, 1998, the Company's bank facilities and certain of
its operating lease arrangements contain covenants related to the
Company's ratio of debt to total capitalization, consolidated net
worth and debt ratings.

In addition, in September 1999, the Company established a
receivables sales facility that provides up to $150 million of
additional liquidity.  In accordance with this agreement,
proceeds of $150 million were received on September 30, 1999 and
subsequently were used to retire debt obligations of Kinder
Morgan, Inc. outstanding at the time of its acquisition by the
Company (see Note 7 of Notes to the accompanying interim
Consolidated Financial Statements).  In accordance with
authoritative accounting guidelines, cash flows associated with
this facility are included with "Cash flows from Operating
Activities" in the accompanying interim Consolidated Statements
of Cash Flows.

<PAGE> 29                                                       Form 10-Q

Regulation
----------

On January 23, 1998, K N Interstate Gas Transmission Co. ("KNI"),
a wholly owned subsidiary of the Company, filed a general rate
case with the Federal Energy Regulatory Commission ("FERC")
requesting a $30.2 million increase in annual revenues.  As a
result of the FERC's action, KNI was allowed to place its rates
into effect on August 1, 1998, subject to refund, and provisions
for refund have been recorded based on its expectation of
ultimate resolution.  By a subsequent order, the FERC required
KNI to remove costs associated with the Pony Express project and
to refund the associated dollars.  The interim refund, associated
with the ordered removal of the Pony Express facilities' costs
from KNI's rates, amounts to approximately $13 million, and has
yet to be refunded.  KNI has filed for rehearing of the FERC's
orders that addressed Pony Express.  As a result of a settlement
conference held on October, 27, 1999, KNI has filed a
comprehensive Stipulation and Agreement on November 3, 1999,
which, if approved by the FERC, will resolve this
proceeding.

On December 29, 1998, Rocky Mountain Natural Gas Company
("RMNG"), a wholly owned subsidiary of Kinder Morgan, received a
"show cause" order from the Colorado Public Utilities Commission
(the "Commission").  RMNG has reached settlement on the issue,
and a Stipulation and Agreement memorializing the settlement with
the Staff of the Commission and the Office of Consumer Counsel
has been filed and approved.  As part of this settlement, RMNG
agreed to reduce its sales and transportation rates effective
June 1, 1999.  The settled rate reduction is anticipated to
reduce RMNG's annual revenues by approximately $0.9 million per
year.

Environmental and Legal Matters
-------------------------------

See Note 21 of Notes to the accompanying interim Consolidated
Financial Statements for information regarding environmental
and legal matters.

Plan for the Combined Kinder Morgan
------------------------------------

In conjunction with the Company's completed acquisition by merger
of Kinder Morgan Delaware, the Company has announced plans to
institute a "back to basics" strategy to improve the Company's
financial performance.  As part of this strategy, the Company has
or intends to:

     * Focus on and enhance utilization of core assets.  The Company's
       current plans contemplate that core businesses will include
       interstate natural gas pipelines and associated assets,
       interstate refined products pipelines, bulk terminals, retail
       natural gas distribution and power development.

     * Sell non-core assets to de-leverage the balance sheet.  The
       Company has previously reported the identification of a number of
       assets for potential divestiture and the process is continuing
       (see Note 6 of Notes to the accompanying interim Consolidated
       Financial Statements).  In total, the sale of non-strategic
       assets is currently expected to reduce debt and long-term leases
       by $750 million to $1 billion.

     * Sell select core assets for fair value to Kinder Morgan Energy
       Partners (NYSE:ENP), a publicly traded master limited
       partnership.  Any such assets sold must qualify for the
       partnership and be accretive to distributions per unit.  By
       selling assets to KMEP, the Company will continue to participate
       in their future growth through its general and limited partner
       interests.

<PAGE> 30                                                       Form 10-Q

     * Reduce corporate overhead costs by $65 million to $70 million
       annually starting in 2000. Approximately one-third of the savings
       is expected to come from payroll reductions.  Nearly all of the
       cost cuts will occur at the corporate level as opposed to field
       operations.  Regulated operations and services will not be
       adversely affected by the cost reductions.

     * Align employee and shareholder incentives.  Richard Kinder and
       William Morgan, who became the two largest individual
       shareholders of the merged company upon closing, are the top two
       executives of the Company and receive a salary of $1 per year.
       In addition, all full-time employees (other than Richard Kinder
       and William Morgan) have been issued stock options under
       a newly created stock option program (see Note 8 of Notes to
       the accompanying interim Consolidated Financial Statements).

     * Recommend to the new board of the combined company a reduction
       of the dividend from $0.80 per share to $0.20 per share annually.
       This measure would save nearly $70 million in cash annually that
       could be used to reduce debt and fuel growth initiatives.  The
       Company is committed to increasing the dividend as the Company's
       financial performance improves.

     * Aggressively seek accretive acquisitions and expansions in core
       businesses.  For example, the Company will pursue power
       development and retail natural gas distribution opportunities, as
       well as strategic growth projects along its interstate pipeline
       systems.

Readiness for Year 2000
-----------------------

The following is a discussion of the Year 2000 problem and its
potential impact on the Company.  The Securities and Exchange
Commission ("SEC") has issued specific guidelines for public
companies regarding their disclosure of the Year 2000 problem.
The guidelines require more detailed disclosure of each company's
analysis of and approach to the Year 2000 problem.  As a result,
the Company is providing the following disclosure; however, the
length and detail contained in this disclosure, relative to the
other disclosures contained herein, is not an indication of the
Company's view of the relative risk of the Year 2000 problem to
the Company.

Some computers and programs, and some devices containing computer
chips ("embedded chips") store or process dates containing the
Year 2000 as "00" and they may fail to recognize the Year 2000 as
a leap year.  This can result in inaccurate date-related
calculations.  It is expected that once the Year 2000 arrives,
computers, computer programs and devices with embedded chips that
have not been identified, and if necessary modified to correct
this problem, may not function normally.  The Company relies on a
number of automated systems to conduct its operation's and to
transact its business, as is common among large diversified
energy companies.  In addition, certain of the Company's
pipelines and processing equipment and related systems contain
electric controls or other devices containing embedded chips.
These controls may also be adversely affected by this problem.
Similarly, third party vendors and servicers also have automated
systems that may be adversely affected by this problem.

In 1997, the Audit Committee of the Company's Board of Directors
(the "Audit Committee") established a Year 2000 project to
address the Year 2000 problem.  In that year, the Company
established a Year 2000 Executive Steering Committee (the "Year
2000 Committee") and a Year 2000 Project Management Office (the
"Year 2000 Project Management Office").  The Year 2000 project is
an ongoing effort monitored by the Audit Committee.

<PAGE> 31                                                       Form 10-Q

The Audit Committee has adopted a Year 2000 Plan (the "Plan") and
will oversee its implementation by receiving periodic reports
from the Year 2000 Committee and directly from management.  The
Audit Committee is prepared to require management to make
additional efforts, including amending the Plan as necessary, to
fulfill the Audit Committee's goal of taking reasonable steps to
minimize injury to people, damage to property, disruption to the
Company's delivery of products and services, supporting systems
and business operations, and other risks associated with the Year
2000 problem.

The Year 2000 Committee is charged with directing the
implementation of the Plan in accordance with resolutions of the
Audit Committee and under the direction of the Company's
designated senior executives.  The Year 2000 Committee oversees
the Year 2000 Project Management Office, headed by the Year 2000
Project Coordinator.  The Year 2000 Committee keeps the Audit
Committee informed of the Company's progress in implementing the
Plan and of significant updates that are made to the Plan.  The
Year 2000 Committee communicates the Audit Committee's directives
concerning the Plan to management and executives, and oversees
the implementation of those directives.

The Year 2000 Project Management Office works closely with the
Company's Readiness Teams comprised of members of the Company's
operating units.  The teams have been organized to further
implement the Plan throughout the Company.  The Project
Management Office, among other things, promotes exchange of
information about Year 2000 problems and solutions, assists in
disseminating information about the Company's policies governing
communications concerning Year 2000 issues and serves as a
conduit between the various Readiness Teams and the Year 2000
Committee.

The aim of the Plan is to take reasonable steps to prevent the
Company's mission critical functions from being impaired due to
the Year 2000 problem.  "Mission critical" describes those
systems, devices, functions and external entities that are of
material importance to maintaining the Company's capacity to
deliver and account for products and services without
interruption, and to maintain the Company's supporting business
operations with no material disruption or diminution in quality.
Each of the Company's operating units is in various stages of
implementing the Plan to address the Year 2000 problem.  These
efforts include:

     * an inventory of systems and areas which may need to be
       corrected;
     * an assessment of potential problems;
     * remediation and implementation, with priority given to mission
       critical items;
     * the testing of such systems and devices; and
     * the development of contingency plans in case the Company cannot
       correct the problem in time, or in the event certain facets of
       the Year 2000 problem go undetected or do not manifest themselves
       until after January 1, 2000.

Specifically, the Company is in the process of correcting
programmable code, replacing non-Year 2000-ready embedded chips,
installing Year 2000-ready releases of certain vendor-supplied
computer systems and, in some cases, replacing existing systems
with new internally or externally developed software in advance
of December 31, 1999.

The process of inventorying, assessing, remediating, and testing
in anticipation of the Year 2000 is necessarily an ongoing and
continuing process.  As the Company learns more about the Year
2000 problem and its effects on the Company, the process of
evaluation, remediation and testing is repeated continuously.
The Company anticipates that it will be necessary to continue
this process into the Year 2000 as new problems are identified,
as well as to repeat the process for problems that can only
reasonably be identified after December 31, 1999.

<PAGE> 32                                                       Form 10-Q

As of October 21, 1999, the Company and all of its business units
were at various points in implementation of the Plan.  The
Company tracks its progress towards implementing the Plan in the
following categories: (i) internal software applications and
systems, which includes the Company's information technology
applications and programs ("IT Systems"), (ii) field systems,
which includes the various automated systems that are used to
gather, process and transport the Company's natural gas
("Automation") and measurement accounting, which includes the
Company's systems to measure the gas flow ("Measurement"), (iii)
desktop systems, which includes the internal computers utilized by
the Company's employees,  and (iv) external entities, which includes
an assessment of the Company's critical vendors and suppliers and
their Year 2000 readiness ("External Entities").  The chart below
shows the dates that the Company has completed or expects to
complete, as applicable, the stages in the listed categories:

<TABLE>
<CAPTION>
                                                       Stages
                    ----------------------------------------------------------------------------
Categories                                                              Contingency  Year 2000
                     Inventory   Assessment   Remediation    Testing     Planning      Ready
                     ---------   ----------   -----------    -------     --------      -----
<S>                    <C>           <C>         <C>          <C>           <C>        <C>
IT Systems             12/97         4/98        10/99        10/99         9/99       11/99
Field Systems:
   Automation          12/98         6/99        11/99         8/99         7/99       11/99
   Measurement         12/98         3/99        10/99         8/99         7/99       10/99
Desktop                 7/99         8/99        10/99        10/99         6/99       10/99
External Entities      10/98         8/99        N/A*         N/A*          9/99        9/99

*Not Applicable

</TABLE>

The Company will continue to closely monitor its progress in
these categories and revise the estimated completion dates as
applicable.

For the Company's Plan to be successful, the Company must rely
for some purposes on outside contractors.  There is a risk that
those contractors will not complete their work prior to the Year
2000.  The Company is developing alternative ways to conduct its
business if such deadlines are not met.  However, any alternative
may involve additional expense and may not be implemented in time
to avoid the Year 2000 problem.  Ultimately, these alternatives
may not be successful.

The Company also relies on suppliers, business partners and other
External Entities that may or may not be addressing their own
problems associated with the Year 2000 problem.  The Company has
sent out questionnaires to External Entities to determine what
steps they have taken to correct any Year 2000 problems they may
have.  The Company has no control over such External Entities'
efforts, so the Company has developed contingency plans in case
such External Entities do not complete their efforts before the
Year 2000.

The contingency plans developed by the Company will address the
fact that despite the Company's good faith reasonable efforts,
the Company may not be able to remediate all of its mission
critical systems.  In addition, External Entities that do
business with the Company may not be Year 2000 ready.  The
Company's contingency plans call for teams of employees to be
available in the evening of December 31, 1999 and on other key
dates such as February 29, 2000, to respond rapidly to any Year
2000-related problem that occurs or affects the Company's mission
critical systems.   The contingency plans call for an on-going
assessment of the Year 2000 problem following January 1, 2000 and
procedures for remediating any problems that arise.

<PAGE> 33                                                       Form 10-Q

The Company estimates that the direct costs the Company has
incurred or will incur in 1998, 1999 and 2000 associated with
assessing, inventorying, remediating and testing internally
developed computer applications, hardware and equipment,
including embedded chip systems and third-party developed
software, to be between $5 million and $7 million.  In addition,
as part of the integration of the Company's systems with the
systems of MidCon, the Company has begun modifying certain of its
computer systems for the combined company or purchasing computer
systems from third parties.  These computer systems will address
the Year 2000 problem.  The costs for these computer systems are
expected to be between $23 million and $25 million, the majority
of which will be capitalized.

The SEC's guidelines also require the Company to address the most
reasonably likely worst case scenarios resulting from the Year
2000 problem.  As a result of the Year 2000 problem, the Company
may be faced with: failure of electrical, gas and similar
services and supplies from utilities, disruption of
telecommunications facilities, interruptions in the nation's
transportation systems, failure of a substantial number of the
Company's mission critical computer hardware and software
systems, including mission critical internal systems as well as
systems that control operational facilities such as pipeline,
electric generation, transmission and distribution systems, re-
coding errors due to the failure to fix all of the Company's
computer code, failure to discover or fix all embedded chips and
sabotage.  In addition, the Company's key suppliers or customers
may experience their own Year 2000 problems in a way that
materially adversely affects the Company's ability to do business
without interruption or disruption.  The Company could also face
substantial claims from customers for loss of revenues due to
service interruptions, for the Company's inability to account for
revenues, for inaccurate customer billing, or for unfulfilled
contractual obligations.  The Company could face substantial
expenses from Year-2000 related litigation, for fixing problems
following the failure of mission critical systems and for
executing the contingency plans.  As a result of the cumulative
impact of these events, the Company's business may be materially
adversely affected.  The adverse impact of these events occurring
can not be quantified at this time.

In addition to the Plan, the Company is in the process of
developing contingency plans to address issues associated with
the reasonably likely worst case scenarios.  The Company has
completed such contingency plans for field operations, and is in
the process of developing contingency plans for mission critical
systems Company-wide and expects to have such plans completed in
advance of January 1, 2000.

The Company does not believe that the direct costs associated
with the Year 2000 problem will be material to its business,
financial position or results of operations.

Item 3.  Quantitative and Qualitative Disclosures About Market
         Risk

There have been no material changes in market risk exposures that
would affect the quantitative and qualitative disclosures
presented as of December 31, 1998, in the "Risk Management"
section of Management's Discussion and Analysis of Financial
Condition and Results of Operations on page 25 of the Company's
Annual Report on Form 10-K for the year ended December 31, 1998.


<PAGE> 34                                                       Form 10-Q

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

On July 26, 1996, the Company and RMNG, along with over 70 other
natural gas companies, were served by Jack J. Grynberg, acting on
behalf of the Government of the United States, with a Civil False
Claims Act lawsuit filed in Washington, D.C. alleging
mismeasurement of the heating content and volume of natural gas
on Federal and Native American land resulting in underpayment of
royalties to the federal government.  The Company and the other
named companies filed a motion to dismiss the lawsuit on grounds
of improper joinder and lack of jurisdiction.  The motion was
granted in 1997.  Mr. Grynberg appealed the dismissal of the
action based on improper joinder, and the D.C. Court of Appeals
affirmed the joinder decision in October 1998.  Mr. Grynberg has
now filed over 70 new cases against over 350 defendants in nine
separate Federal Courts.  The action against the Company,
modified somewhat from his original action, was filed in Federal
District Court, District of Colorado, and the Company was served
in this action on May 25, 1999.  The Department of Justice
decided not to intervene in these cases in support of Grynberg's
complaint. On October 21, 1999, the Panel on the Multi-District
Litigation consolidated all of these cases in the Federal
District Court of Wyoming.

On September 23, 1999, a complaint styled as the First Amended
Class Action Petition regarding "Quinque Operating Company, et al.
v. Gas Pipelines, et al.," Case No. 99-C-30, Stevens County
District Court, Kansas, was filed.  The complaint names over 200
natural gas companies including the Company, K N Interstate Gas
Transmission Co., K N Natural Gas, Inc., MidCon Corporation,
MidCon Gas Services Corporation, MidCon Marketing Corporation,
MidCon Texas Pipeline Operator, Inc., Natural Gas Pipeline
Company of America, Northern Gas Company, Rocky Mountain Natural
Gas Company, TCP Gathering Company, and Westar Transmission Co.
The complaint contains allegations of mismeasurement of the
heating content and volume of natural gas on non-Federal and non-
Native American lands similar to the allegations contained in the
above-referenced False Claim Act lawsuit dealing with Federal and
Native American land. On September 24, 1999, Defendant Northern
Natural Gas Company filed a Notice of Removal to the United
States District Court for the District of Kansas, Case No. 99-
1390-MLB.  Subsequently, Defendants notified the Panel on Multi-
District Litigation of the existence of this case and requested
that it be consolidated as a "tag-a-long" action with the above-
referenced False Claim Act case in Wyoming.

The Company believes it has meritorious defenses to all lawsuits
and legal proceeds in which it is a defendant and will vigorously
defend against them.  Based on its evaluation of the above
matters, and after consideration of reserves established, the
Company believes that the resolution of such matters will not
have a material adverse effect on the Company's business,
financial position or results of operations.

Item 2.  Changes in Securities and Use of Proceeds

On October 7, 1999, the Company issued 200,000 shares of common
stock, par value of $5.00 per share, of the Company to Petrie
Parkman (the "Petrie Shares") pursuant to the terms of the
engagement letter between Petrie Parkman and the Company dated as
of June 24, 1999, as amended as of August 20, 1999, in
consideration for Petrie Parkman's advisory services rendered in
connection with the acquisition of Kinder Morgan Delaware.  The
issuance of the Petrie Shares was exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended.

<PAGE> 35                                                       Form 10-Q

Item 4.  Submission of Matters to a Vote of Security Holders

a.)  The Company held a Special Meeting of Stockholders on
     September 28, 1999 (the "Special Meeting").

b.)  Proxies for the Special Meeting were solicited pursuant to
     Regulation 14A of the Securities Exchange Act of 1934.

c.)  The matters set forth below were voted on at the Special
     Meeting:

     (i)  A proposal to approve the issuance of approximately
          41,500,000 shares of Company common stock in connection with the
          proposed merger pursuant to which Kinder Morgan Delaware will
          become a wholly owned subsidiary of the Company, was approved and
          the number of affirmative votes, negative votes and abstentions
          with respect to this matter were as follows:

          For:      53,280,108
          Against:     488,072
          Abstain:     270,964

     (ii) A proposal to approve an amendment to the Company's articles
          of incorporation to change the Company's name to "Kinder Morgan,
          Inc.," was approved and the number of affirmative votes, negative
          votes and abstentions were respect to this matter were as
          follows:

          For:      52,486,616
          Against:   1,317,030
          Abstain:     235,498

Item 5.  Other Information

On October 7, 1999, the Company consummated its acquisition of
Kinder Morgan Delaware pursuant to the terms of the merger
agreement.  Also, on October 7, 1999, upon the consummation of
the transactions contemplated by the merger agreement, David W.
Burkholder, Robert H. Chitwood, Howard P. Coghlan, Jordan L.
Haines and James C. Taylor resigned from the Company's Board of
Directors. In addition, upon consummation of the merger, the
Company entered into Governance Agreements with each of Richard
D. Kinder and Morgan Associates, Inc.  On October 8, 1999, the
number of directors constituting the Company's Board of Directors
was set at ten and the remaining directors, in accordance with
the Governance Agreements described above, appointed Richard D.
Kinder, William V. Morgan, Fayez Sarofim and Ted A. Gardner to
fill the vacancies on the Company's Board of Directors.

On August 5, 1999, John F. Riordan resigned from the Board of
Directors.

Effective July 31, 1999, Clyde McKenzie, Chief Financial Officer,
Mort Aaronson, Chief Marketing Officer, and John DiNardo,
Executive Vice President of K N Gas Gathering, left the company
as part of a corporate reorganization.

Effective July 8, 1999, Larry D. Hall resigned his post as
Chairman and Chief Executive Officer of the Company. At that
time, Stewart Bliss, an independent member of the Company's Board
of Directors, assumed the Chairman and CEO positions on an
interim basis.  Upon closing of the acquisition by merger of
Kinder Morgan Delaware, Richard D. Kinder, Chairman and CEO of
Kinder Morgan Delaware, was named Chairman

<PAGE> 36                                                       Form 10-Q

and CEO of the Company. For more information concerning the
acquisition of Kinder Morgan Delaware, see Note 2 of Notes to the
interim Consolidated Financial Statements, included elsewhere
herein.

On June 24, 1999, Richard D. Kinder resigned from the Board of
Directors to pursue the transaction between the Company and
Kinder Morgan Delaware.  On June 20, 1999, David M. Carmichael
resigned from the Company's Board of Directors to pursue another
business venture.

Item 6.  Exhibits

(A) Exhibits

     2.1  Agreement and Plan of Merger dated July 8,
          1999, among the Company, Rockies Merger Corp. and
          Kinder Morgan Delaware (incorporated by reference to
          Exhibit 2.1 to the Company's Registration Statement on
          Form S-4 filed on August 23, 1999 (File No.
          333-85747)).

     2.2  First Amendment to the Agreement and Plan of Merger
          dated August 20, 1999, among the Company, Rockies
          Merger Corp. and Kinder Morgan Delaware (incorporated
          by reference to Exhibit 2.2 to the Company's
          Registration Statement on Form S-4 filed on August 23,
          1999 (File No. 333-85747)).

     *3.1 Certificate of Amendment to the Restated Articles of
          Incorporation of the Company as filed on October 7,
          1999, with the Secretary of State of Kansas.

     *3.2 Bylaws of the Company as amended to October 7, 1999.

     *4.1 Amendment No. 2 to Rights Agreement of the Company
          dated July 8, 1999, between the Company and First
          Chicago Trust Company of New York.

     10.1 Governance Agreement dated October 7, 1999, between the
          Company and Richard D. Kinder (incorporated by
          reference to Exhibit 99.C of the Schedule 13D filed by
          Mr. Kinder on October 8, 1999).

     10.2 Governance Agreement dated October 7, 1999, between the
          Company and Morgan Associates, Inc. (incorporated by
          reference to Exhibit 99.C of the Schedule 13D filed by
          Morgan Associates, Inc. and William V. Morgan on
          October 8, 1999).

     10.3 Employment Agreement dated October 7, 1999, between the
          Company and Richard D. Kinder (incorporated by
          reference to Exhibit 99.D of the Schedule 13D filed by
          Mr. Kinder on October 8, 1999).

    *10.4 Receivables Purchase Agreement dated September 28,
          1999, among KN Receivables Corporation, as Seller,
          Falcon Asset Securitization Corporation, International
          Securitization Corporation and The Financial
          Institutions Party Hereto, as Investors and Bank One,
          NA, as Agent.


<PAGE> 37                                                       Form 10-Q

    *10.5 Receivables Sale Agreement dated September 28, 1999,
          between K N Energy, Inc., as the Originator, and other
          Originators specified herein and KN Receivables
          Corporation, as Buyer.

    *27.1 Financial Data Schedule

*  filed herewith

(B) Reports on Form 8-K

Current Report on Form 8-K dated July 14, 1999, was filed July
14, 1999, pursuant to Items 5 and 7 of that form.  The following
was disclosed pursuant to Item 5 of that form:
     1) K N Energy, Inc. entered into an Agreement and Plan of Merger
        (the "Merger Agreement") dated as of July 8, 1999, by and among
        K N Energy, Inc. and Rockies Merger Corp., a wholly owned
        subsidiary of K N Energy, Inc., and Kinder Morgan Delaware.
     2) Certain stockholders of Kinder Morgan Delaware entered into a
        Voting Agreement (the "Voting Agreement") whereby they agreed,
        among other things, to vote their shares of Kinder Morgan
        Delaware common stock in favor of the merger.
     3) On June 20, 1999, David M. Carmichael resigned from the
        Company's Board of Directors to pursue another business venture.
        On June 24, 1999, Richard D. Kinder resigned from K N Energy,
        Inc.'s Board of Directors.  On July 8, 1999, Larry D. Hall
        resigned his post as Chairman and Chief Executive Officer of K N
        Energy, Inc.
     4) Stewart A. Bliss, a director of the Company, assumed the
        Company Chairman and CEO positions on an interim basis.  Upon
        consummation of the merger, Mr. Kinder will be named Chairman and
        Chief Executive Officer of the Company.
Pursuant to Item 7 of that form, the Merger Agreement, the Voting
Agreement and a joint press release of K N Energy, Inc. and
Kinder Morgan, Inc. issued July 8, 1999, announcing the merger
were filed as exhibits.

Current Report on Form 8-K dated September 15, 1999, was filed
September 15, 1999, pursuant to Item 5 and Item 7 of that form.
A press release outlining the strategies that the Company plans
to implement following the completion of the merger in which
Kinder Morgan Delaware will become a wholly owned subsidiary of
the Company was disclosed pursuant to Item 5.  The press release
was attached as an exhibit pursuant to Item 7.

Current Report on Form 8-K dated September 29, 1999, was filed on
September 29, 1999, pursuant to Item 5 and Item 7 of that form.
A press release announcing that the Company's stockholders had
approved the issuance of shares of the Company's common stock in
connection with the merger of a wholly owned subsidiary of the
Company with and into Kinder Morgan Delaware and that the
Company's stockholders had approved an amendment to the Company's
Articles of Incorporation to change the Company's name to Kinder
Morgan, Inc. upon completion of the Merger was disclosed pursuant
to Item 5.  The press release was attached as an exhibit pursuant
to Item 7.

<PAGE> 38                                                       Form 10-Q

                            SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                              KINDER MORGAN, INC.
                              (Registrant)


November 5, 1999              /s/ Jack W. Ellis II
                              -----------------------------------
                              Jack W. Ellis II
                              Vice President and Controller
                              (On Behalf of the Registrant and as
                              Principal Accounting Officer)


                          EXHIBIT INDEX

     2.1       Agreement and Plan of Merger dated July 8,
               1999, among the Company, Rockies Merger Corp. and
               Kinder Morgan Delaware (incorporated by
               reference to Annex A-1 of the Company's
               Registration Statement on Form S-4 filed on August
               23, 1999 (File No. 333-85747)).

     2.2       First Amendment to the Agreement and Plan of
               Merger dated August 20, 1999, among the Company,
               Rockies Merger Corp. and Kinder Morgan Delaware
               (incorporated by reference to Exhibit 2.2 to the
               Company's Registration Statement on Form S-4 filed
               on August 23, 1999 (File No. 333-85747)).

     *3.1      Certificate of Amendment to the Restated
               Articles of Incorporation of the Company as filed
               on October 7, 1999, with the Secretary of State of
               Kansas.

     *3.2      Bylaws of the Company as amended to October 7, 1999.

     *4.1      Amendment No. 2 to Rights Agreement of the
               Company dated July 8, 1999, between the Company
               and First Chicago Trust Company of New York.

     10.1      Governance Agreement dated October 7, 1999,
               between the Company and Richard D. Kinder
               (incorporated by reference to Exhibit 99.C of the
               Schedule 13D filed by Mr. Kinder on October 8,
               1999).

     10.2      Governance Agreement dated October 7, 1999,
               between the Company and Morgan Associates, Inc.
               (incorporated by reference to Exhibit 99.C of the
               Schedule 13D filed by Morgan Associates, Inc. and
               William V. Morgan on October 8, 1999).

     10.3      Employment Agreement dated October 7, 1999,
               between the Company and Richard D. Kinder
               (incorporated by reference to Exhibit 99.D of the
               Schedule 13D filed by Mr. Kinder on October 8,
               1999).

     *10.4     Receivables Purchase Agreement dated September 28,
               1999, among KN Receivables Corporation, as
               Seller, Falcon Asset Securitization Corporation,
               International Securitization Corporation and The
               Financial Institutions Party Hereto, as Investors
               and Bank One, NA, as Agent.

     *10.5     Receivables Sale Agreement dated September 28,
               1999, between K N Energy, Inc., as the Originator,
               and other Originators specified herein and KN
               Receivables Corporation, as Buyer.

     *27.1     Financial Data Schedule

*    filed herewith