Form 10-Q


=================================================================

        UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                      Washington, DC 20549

                            FORM 10-Q

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

        For the quarterly period ended September 30, 2000
                                       ------------------
                               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.)

    500 Dallas, Suite 1000, Houston, Texas               77002
    --------------------------------------      -----------------------
       (Address of principal executive                (Zip Code)
                   offices)

Registrant's telephone number, including area code (713) 369-9000
                                                   --------------

-----------------------------------------------------------
  (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___

The  number  of  shares outstanding for each of the  registrant's
classes  of common stock, as of the latest practicable date  was:
Common Stock, $5 par value; outstanding 114,409,373 shares as  of
October 31, 2000.


<PAGE> 2
              KINDER MORGAN, INC. AND SUBSIDIARIES
                            FORM 10-Q
                QUARTER ENDED SEPTEMBER 30, 2000


                            Contents


 PART I. FINANCIAL INFORMATION
                                                                   Page
 Item 1. Financial Statements (Unaudited)                          Number

            Consolidated Balance Sheets.......................        3-4
            Consolidated Statements of Income.................          5
            Consolidated Statements of Cash Flows.............          6
            Notes to Consolidated Financial Statements........       7-18

 Item 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations...............      18-30

 Item 3. Quantitative and Qualitative Disclosures About Market
           Risk...............................................         30

 PART II OTHER INFORMATION

 Item 1. Legal Proceedings....................................         30
 Item 6. Exhibits and Reports on Form 8-K.....................         30

 SIGNATURE....................................................         31



<PAGE> 3

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

CONSOLIDATED BALANCE SHEETS (Unaudited)
Kinder Morgan, Inc. and Subsidiaries
(In Thousands)

<TABLE>
<CAPTION>
                                                  September 30,    December 31,
                                                       2000            1999
                                                  -------------   -------------
<S>                                              <C>             <C>
ASSETS:
 Current Assets:
 Cash and Cash Equivalents                        $    19,198     $    26,378
 Restricted Deposits                                      272              51
 Accounts Receivable                                  423,876         306,451
 Receivable from Kinder Morgan Energy Partners              -         330,000
 Inventories                                           49,300          50,328
 Gas Imbalances                                        54,263          51,024
 Other                                                 16,232          19,154
 Net Current Assets of Discontinued Operations         10,434          58,991
                                                  -----------     -----------
                                                      573,575         842,377
                                                  -----------     -----------

 Investments:
 Kinder Morgan Energy Partners                      1,707,470       1,791,768
 Other                                                149,271         126,103
                                                  -----------     -----------
                                                    1,856,741       1,917,871
                                                  -----------     -----------

 Property, Plant and Equipment                      6,188,089       6,167,251
 Less Accumulated Depreciation and Amortization       408,150         377,687
                                                  -----------     -----------
                                                    5,779,939       5,789,564
                                                  -----------     -----------

 Deferred Charges and Other Assets                    239,741         209,758

 Net Non-current Assets of Discontinued
   Operations                                          74,560         659,236
                                                  -----------     -----------

 Total Assets                                     $ 8,524,556     $ 9,418,806
                                                  ===========     ===========

The accompanying notes are an integral part of these statements.

</TABLE>


<PAGE 4>

CONSOLIDATED BALANCE SHEETS (Unaudited)
Kinder Morgan, Inc. and Subsidiaries
(In Thousands)

<TABLE>
<CAPTION>

                                                     September 30,    December 31,
                                                          2000            1999
                                                     -------------   -------------
<S>                                                  <C>             <C>
 LIABILITIES AND STOCKHOLDERS' EQUITY:
 Current Liabilities:
 Current Maturities of Long-term Debt                $         -     $     7,167
 Notes Payable                                                 -         574,400
 Accounts Payable                                        330,663         224,625
 Accrued Taxes                                            13,847          36,075
 Gas Imbalances                                           42,487          74,992
 Payable for Purchase of Thermo Companies                 15,000          44,320
 Reserve for Loss on Disposal of Discontinued
   Operations                                             17,181         535,630
 Other                                                   127,670         206,620
                                                     -----------     -----------
                                                         546,848       1,703,829
                                                     -----------     -----------
 Other Liabilities and Deferred Credits:
 Deferred Income Taxes                                 2,161,382       2,228,553
 Other                                                   231,196         242,926
                                                     -----------     -----------
                                                       2,392,578       2,471,479
                                                     -----------     -----------

 Long-term Debt                                        3,560,547       3,293,326
                                                     -----------     -----------

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

 Minority Interests in Equity of Subsidiaries              7,396           9,331
                                                     -----------     -----------

 Stockholders' Equity:
 Common Stock-
   Authorized - 150,000,000 Shares, Par Value
     $5 Per Share
   Outstanding - 114,352,762 and 112,665,977
     Shares, Respectively, After Deducting 131,594
     and 172,402 Shares Held in Treasury                 572,422         564,192
 Additional Paid-in Capital                            1,188,072       1,203,008
 Retained Deficit                                        (15,143)        (95,615)
 Other                                                    (3,164)         (5,744)
                                                     -----------     -----------
 Total Stockholders' Equity                            1,742,187       1,665,841
                                                     -----------     -----------

 Total Liabilities and Stockholders' Equity          $ 8,524,556     $ 9,418,806
                                                     ===========     ===========

The accompanying notes are an integral part of these statements.

</TABLE>


<PAGE 5>

CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Kinder Morgan, Inc. and Subsidiaries
(In Thousands except Per Share Amounts)

<TABLE>
<CAPTION>

                                                 Three Months Ended          Nine Months Ended
                                                   September 30,               September 30,
                                             -----------------------     -----------------------
                                                 2000          1999          2000          1999
                                             ----------    ----------    ----------    ----------
<S>                                         <C>           <C>           <C>           <C>
 Operating Revenues:
   Natural Gas Sales                         $  578,898    $  299,191    $1,250,686    $  736,854
   Natural Gas Transportation and Storage       138,306       173,530       443,546       552,934
   Other                                         31,859        23,961        85,187        65,888
                                             ----------    ----------    ----------    ----------
 Total Operating Revenues                       749,063       496,682     1,779,419     1,355,676
                                             ----------    ----------    ----------    ----------

 Operating Costs and Expenses:
   Gas Purchases and Other Costs of Sales       576,370       318,291     1,233,715       772,517
   Operations and Maintenance                    38,391        38,559       117,927       125,744
   General and Administrative                    14,553        26,825        42,701        72,060
   Depreciation and Amortization                 27,012        31,674        80,784       119,664
   Taxes, Other Than Income Taxes                 7,241         8,938        20,926        25,753
   Merger-related Costs                               -        10,962             -        10,962
                                             ----------    ----------    ----------    ----------
 Total Operating Costs and Expenses             663,567       435,249     1,496,053     1,126,700
                                             ----------    ----------    ----------    ----------

 Operating Income                                85,496        61,433       283,366       228,976
                                             ----------    ----------    ----------    ----------

 Other Income and (Deductions):
   Kinder Morgan Energy Partners:
     Equity in Earnings                          34,562             -        99,287             -
     Amortization of Excess Investment           (6,927)            -       (21,366)            -
   Equity in Earnings (Losses) of Other
     Equity Investments                          (1,783)        1,783        (7,399)       12,312
   Interest Expense, Net                        (61,594)      (61,410)     (184,463)     (187,223)
   Minority Interests                            (5,975)       (6,062)      (18,012)      (18,626)
   Other, Net                                       588        13,906        11,152        33,699
                                             ----------    ----------    ----------    ----------
 Total Other Income and (Deductions)            (41,129)      (51,783)     (120,801)     (159,838)
                                             ----------    ----------    ----------    ----------

 Income from Continuing Operations
   Before Income Taxes                           44,367         9,650       162,565        69,138
 Income Taxes                                    17,739         3,764        65,026        26,964
                                             ----------    ----------    ----------    ----------
 Income from Continuing Operations               26,628         5,886        97,539        42,174
                                             ----------    ----------    ----------    ----------
 Discontinued Operations, Net of Tax:
    Loss from Discontinued Operations                 -        (8,925)            -       (40,499)
    Loss on Disposal of Discontinued
      Operations                                      -       (11,479)            -       (11,479)
                                             ----------    ----------    ----------    ----------
 Total Loss From Discontinued Operations              -       (20,404)            -       (51,978)
                                             ----------    ----------    ----------    ----------

 Net Income (Loss)                               26,628       (14,518)       97,539        (9,804)
 Less - Preferred Dividends                           -             -             -           129
 Less - Premium Paid on Preferred Stock
   Redemption                                         -             -             -           350
                                             ----------    ----------    ----------    ----------
 Earnings (Loss) Available For Common Stock  $   26,628    $  (14,518)   $   97,539    $  (10,283)
                                             ==========    ==========    ==========    ==========

 Number of Shares Used in Computing Basic
   Earnings Per Common Share (Thousands)        114,461        70,914       113,906        70,363
                                             ==========    ==========    ==========    ==========
 Basic Earnings (Loss) Per Common Share:
   Continuing Operations                     $     0.23    $     0.08    $     0.86    $     0.59
   Discontinued Operations                            -         (0.12)            -         (0.58)
   Loss on Disposal of Discontinued
     Operations                                       -         (0.16)            -         (0.16)
                                             ----------    ----------    ----------    ----------
 Total Basic Earnings (Loss) Per Common
   Share                                     $     0.23    $    (0.20)   $     0.86    $    (0.15)
                                             ==========    ==========    ==========    ==========
 Number of Shares Used in Computing Diluted
   Earnings Per Common Share (Thousands)        116,177        70,986       114,686        70,441
                                             ==========    ==========    ==========    ==========
 Diluted Earnings (Loss) Per Common Share:
   Continuing Operations                     $     0.23    $     0.08    $     0.85    $     0.59
   Discontinued Operations                            -         (0.12)            -         (0.58)
   Loss on Disposal of Discontinued
     Operations                                       -         (0.16)            -         (0.16)
                                             ----------    ----------    ----------    ----------
 Total Diluted Earnings (Loss) Per Common
   Share                                     $     0.23    $    (0.20)   $     0.85    $    (0.15)
                                             ==========    ==========    ==========    ==========

 Dividends Per Common Share                  $     0.05    $     0.20    $     0.15    $     0.60
                                             ==========    ==========    ==========    ==========

The accompanying notes are an integral part of these statements.

</TABLE>


<PAGE> 6

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

<TABLE>
<CAPTION>

                                                           Nine Months Ended
                                                             September 30,
                                                       ------------------------
                                                           2000          1999
                                                       -----------   -----------
<S>                                                   <C>           <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
 Income from Continuing Operations                     $   97,539    $   42,174
 Adjustments to Reconcile Income from Continuing
   Operations to Net Cash Flows from Operating
   Activities:
      Depreciation and Amortization                        80,784       119,664
      Deferred Income Taxes                                58,417        (1,994)
      Equity in Earnings of Kinder Morgan Energy
       Partners                                           (77,921)            -
      Distributions from Kinder Morgan Energy Partners     84,315             -
      Deferred Purchased Gas Costs                          2,329         5,800
      Net Gains on Sales of Facilities                     (2,130)      (30,908)
      Changes in Other Working Capital Items               (3,225)     (108,007)
      Changes in Deferred Revenues                         (3,573)      (11,665)
      Other Non-cash Charges and Credits to Income        (16,486)      (11,078)
      Other, Net                                          (21,181)      (18,727)
                                                       ----------    ----------
      Net Cash Flows Provided by (Used in) Continuing
        Operations                                        198,868       (14,741)
      Net Cash Flows Provided by (Used in)
        Discontinued Operations                          (102,374)      138,288
                                                       ----------    ----------
 NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES           96,494       123,547
                                                       ----------    ----------

 CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital Expenditures                                     (74,114)      (60,631)
 Proceeds from Sales to Kinder Morgan Energy Partners     330,000             -
 Acquisitions                                             (19,412)      (35,000)
 Investments                                              (41,712)      (25,393)
 Sale of Tom Brown, Inc. Stock                             14,864        28,650
 Sale of U.S. Government Securities                             -     1,092,415
 Proceeds from Sales of Other Assets                       11,415        89,701
                                                       ----------    ----------
 Net Cash Flows Provided by Continuing Investing
   Activities                                             221,041     1,089,742
 Net Cash Flows Provided by (Used in) Discontinued
   Investing Activities                                   126,440       (51,686)
                                                       ----------    ----------
 NET CASH FLOWS PROVIDED BY INVESTING ACTIVITIES          347,481     1,038,056
                                                       ----------    ----------

 CASH FLOWS FROM FINANCING ACTIVITIES:
 Short-term Debt, Net                                    (313,200)   (1,113,146)
 Long-term Debt Retired                                    (1,622)       (5,167)
 Premium Equity Participating Securities Contract Fee        (654)       (1,097)
 Common Stock Issued                                       15,022         5,590
 Other Financing                                         (133,409)            -
 Preferred Stock Redeemed                                       -        (7,350)
 Treasury Stock Issued                                        997           236
 Treasury Stock Acquired                                      (18)         (545)
 Cash Dividends, Common and Preferred                     (17,068)      (42,458)
 Minority Interests, Net                                   (1,203)          934
                                                       ----------    ----------
 NET CASH FLOWS USED IN FINANCING ACTIVITIES             (451,155)   (1,163,003)
                                                       ----------    ----------

 Net Decrease in Cash and Cash Equivalents                 (7,180)       (1,400)
 Cash and Cash Equivalents at Beginning of Period          26,378        16,247
                                                       ----------    ----------
 Cash and Cash Equivalents at End of Period            $   19,198    $   14,847
                                                       ==========    ==========

For supplemental cash flow information, see Note 8.
The accompanying notes are an integral part of these statements.

</TABLE>


<PAGE> 7

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.   General
     -------

In October 1999, K N Energy, Inc., a Kansas corporation, acquired
Kinder Morgan, Inc., a Delaware corporation, referred to in these
Notes  as Kinder Morgan Delaware.  K N Energy, Inc. then  changed
its  name  to  Kinder Morgan, Inc.  Unless the  context  requires
otherwise, references to "we," "us," "our," or the "Company"  are
intended  to  mean Kinder Morgan, Inc. (a Kansas corporation  and
formerly  known  as  K  N  Energy,  Inc.)  and  its  consolidated
subsidiaries.   We  have  prepared  the  accompanying   unaudited
consolidated financial statements under the rules and regulations
of  the Securities and Exchange Commission.  Under such rules and
regulations, we have condensed or omitted certain information and
notes  normally  included  in financial  statements  prepared  in
conformity with accounting principles generally accepted  in  the
United  States.   We believe, however, that our  disclosures  are
adequate  to make the information presented not misleading.   The
consolidated  financial statements reflect all  adjustments  that
are,   in  the  opinion  of  management,  necessary  for  a  fair
presentation  of  our financial results for the interim  periods.
You  should  read  these  consolidated  financial  statements  in
conjunction  with  our  consolidated  financial  statements   and
related  notes  included in our 1999 Form  10-K.   Certain  prior
period  amounts have been reclassified to conform to the  current
presentation.

2.   Business Combination
     --------------------

On October 7, 1999, we completed our acquisition of Kinder Morgan
Delaware,  the sole stockholder of the general partner of  Kinder
Morgan Energy Partners, L.P.  Kinder Morgan Energy Partners,  the
nation's  largest pipeline master limited partnership,  owns  and
operates product pipelines, bulk terminals, natural gas pipelines
and  certain  other businesses.  Kinder Morgan  Energy  Partners'
1999  Form 10-K contains additional information on its businesses
and  assets.  We issued approximately 41.5 million shares of  our
common  stock  in exchange for all of the outstanding  shares  of
Kinder  Morgan  Delaware.  This transaction was  a  purchase  for
accounting  purposes,  with the assets acquired  and  liabilities
assumed recorded at their respective estimated fair market values
as  of  the  acquisition  date.  We began including  the  assets,
liabilities  and results of operations of Kinder Morgan  Delaware
with  ours beginning with the October 1999 acquisition.  Our 1999
Form 10-K contains additional information on this acquisition.

The   following  pro  forma  information  gives  effect  to   our
acquisition  of  Kinder  Morgan  Delaware  as  if  the   business
combination  had  occurred January 1, 1999.  This  unaudited  pro
forma  information  should  be  read  in  conjunction  with   the
accompanying  consolidated  financial  statements  and  with  the
financial statements and other financial information included  in
our  1999  Form  10-K.   This  pro  forma  information  does  not
necessarily  indicate  the  financial  results  that  would  have
occurred  if  this  acquisition  had  taken  place  on  the  date
indicated, nor should it necessarily be viewed as an indicator of
future financial results.

                                                       Nine Months Ended
Unaudited Pro Forma Financial Information              September 30, 1999
-----------------------------------------          -------------------------
                                                      (Dollars In Millions
                                                   Except Per Share Amounts)


Operating Revenues                                       $    3,748.4
Net Loss                                                 $       (2.3)
Diluted Loss Per Common Share                            $      (0.02)
Number of Shares Used in Computing Diluted Loss
   Per Common Share (In Thousands)                            112,124


<PAGE> 8

3.   Accounting for Certain Equity Transactions by Affiliates
     --------------------------------------------------------

We  account  for our investment in Kinder Morgan Energy  Partners
(among other entities) under the equity method of accounting.  In
each  accounting period, we record our share of these  investees'
earnings,  and  amortize any "excess" investment. We  adjust  the
amount of our excess investment when an equity method investee or
a consolidated subsidiary issues additional equity (or reacquires
equity   shares)  in  any  manner  which  alters  our   ownership
percentage.  Differences between the per unit sales proceeds from
these  equity  issuances (or reacquisitions) and  our  underlying
book  basis,  as  well  as the pro rata  portion  of  the  excess
investment  (including associated deferred taxes) which  must  be
written off, are recorded directly to paid-in capital rather than
being recognized as gains or losses.


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

Based on a study of the useful lives of the underlying assets  by
an  independent  third  party,  in  July  1999,  we  changed  our
depreciation  rates associated with a portion  of  our  property,
plant,  and  equipment acquired from MidCon Corp. in early  1998.
This   change   decreased  "Depreciation  and  Amortization"   by
approximately $9.7 million and $29.0 million for the quarter  and
nine months ended September 30, 2000, respectively, and increased
"Income   from  Continuing  Operations"  and  "Net   Income"   by
approximately  $5.8 million ($0.05 per diluted share)  and  $17.4
million ($0.15 per diluted share) for the quarter and nine months
ended  September  30, 2000, respectively, in  comparison  to  the
amounts  we  would have recorded using the previous  depreciation
rates.

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

On  October  4, 2000, we announced that we intended to contribute
approximately  $300  million of assets to  Kinder  Morgan  Energy
Partners.   The largest asset we intend to contribute  is  Kinder
Morgan  Texas Pipeline, Inc.  We will also contribute the  Casper
and Douglas Natural Gas Gathering and Processing Systems, our  50
percent  interest in Coyote Gas Treating, LLC and our 25  percent
interest  in Thunder Creek Gas Services, L.L.C.  As consideration
for  the  sale,  we will receive approximately $300  million,  50
percent  in cash and 50 percent in Kinder Morgan Energy  Partners
limited  partnership units.  We expect this transaction to  close
during the fourth quarter.

In  August  2000, Kinder Morgan Power Company, one of our  wholly
owned  subsidiaries,  announced plans  to  build  a  550-megawatt
electric   power  plant  in  Jackson,  Michigan.   All  necessary
regulatory   permits  and  approvals  have  been  obtained,   and
construction  on  the  $250 million natural gas-fired  plant  has
begun.   The plant is expected to begin producing power  in  June
2002.   In  May 2000, Kinder Morgan Power announced another  550-
megawatt  facility  which  is currently  being  constructed  near
Little Rock, Arkansas.

In  April 2000, Kinder Morgan Energy Partners issued 4.5  million
limited  partnership units in a public offering  at  a  price  of
$39.75 per unit, receiving total net proceeds (after underwriting
discount)  of  $171.3 million.  We did not acquire any  of  these
units.   This  transaction  reduced our percentage  ownership  of
Kinder  Morgan  Energy  Partners  from  approximately  19.9%   to
approximately 18.6% and had the associated effects of  increasing
our investment in the net assets of Kinder Morgan Energy Partners
by  $6.1 million and reducing (i) our excess investment in Kinder
Morgan   Energy  Partners  by  $81.1  million,  (ii)   associated
accumulated deferred income taxes by $30.0 million, (iii) paid-in
capital by $45.0 million and (iv) the monthly amortization of the
excess investment by approximately $176 thousand (see Note 3).


<PAGE> 9

On  December  30, 1999, we entered into a contribution  agreement
with  several of our wholly owned subsidiaries and Kinder  Morgan
Energy Partners.  As a result, effective as of December 31, 1999,
we  contributed all of our interests in the following  to  Kinder
Morgan  Energy Partners: (i) our wholly owned subsidiary,  Kinder
Morgan  Interstate Gas Transmission LLC (formerly K N  Interstate
Gas  Transmission Co.), (ii) our wholly owned subsidiary,  Kinder
Morgan  Trailblazer LLC (formerly NGPL-Trailblazer, Inc.),  which
owns  a  one-third interest in Trailblazer Pipeline  Company  and
(iii) our 49% interest in Red Cedar Gathering Company.

On  September  30, 1999, we sold (to an unaffiliated  party)  our
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.  On June 30, 1999, we sold our  interests  in
the  HIOS and UTOS offshore pipeline systems and related laterals
to  Leviathan  Gas  Pipeline Partners, L.  P.   These  two  sales
yielded   total  cash  proceeds  of  approximately  $75  million,
resulted  in a total pretax gain of approximately $28.9  million,
and substantially eliminated our investment in offshore assets.

On September 3, 1999, we sold 1,000,000 shares of preferred stock
of  Tom  Brown,  Inc.  for approximately  $29  million  in  cash,
realizing  a  gain  of $2.2 million (approximately  $1.3  million
after tax, or $0.02 per diluted share).

Additional   information  on  these  and  other   investment/sale
transactions is included in our 1999 Form 10-K.  Note 6  contains
information regarding sales of assets and businesses included  in
discontinued operations.

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

During  the  third quarter of 1999, we adopted and implemented  a
plan  to  discontinue our direct marketing of non-energy products
and services (principally under the "Simple Choice" brand), which
activities had been carried on largely through our en*able  joint
venture  with PacifiCorp.  During the fourth quarter of 1999,  we
adopted and implemented plans to discontinue the following  lines
of  business: gathering and processing of natural gas,  providing
field  services to natural gas producers, commodity marketing  of
natural gas and natural gas liquids, international operations and
West  Texas pipelines.  The accounting for the discontinuance  of
these  businesses  is further described in Note  6  of  Notes  to
Consolidated Financial Statements included in our 1999 Form 10-K.
The estimated loss associated with discontinuing these businesses
remains  subject  to  uncertainty with respect  to  the  ultimate
proceeds  to  be  received  from the sale  and  the  pre-disposal
operation of these assets (among other factors) and, accordingly,
the  actual loss may differ materially from the estimate recorded
as  of December 31, 1999.  Any such difference will be recognized
in  the period in which it is probable and estimable, and will be
classified in the same manner as the original estimated loss.

<PAGE> 10

Summarized  financial  data  of discontinued  operations  are  as
follows:
<TABLE>
<CAPTION>

                                           Three Months Ended        Nine Months Ended
                                             September 30,             September 30,
                                        ------------------------  ------------------------
                                           2000         1999         2000         1999
                                        -----------  -----------  -----------  -----------
                                                          (In Thousands)
Income Statement Data
---------------------
<S>                                    <C>          <C>          <C>          <C>
Operating Revenues:
   Commodity Marketing                  $        -   $1,110,755   $  580,159   $2,608,987
   Gathering and Processing                 86,847      166,855      400,572      430,268
   West Texas Pipelines                          -       16,679        8,336       47,221
   International Operations                  1,498          425        4,381        1,096

Loss From Discontinued Operations,
 Net of Tax Benefit:
   Commodity Marketing, net of $2,750
     and $8,875 of tax                           -   $   (4,301)           -   $  (13,881)
   Gathering and Processing, net of
     $515 and $8,315 of tax                      -         (805)           -      (13,005)
   West Texas Pipelines, net of $1,162
     and $3,964 of tax                           -       (1,817)           -       (6,200)
   International Operations, net of
     $417 and $590 of tax                        -         (652)           -         (922)
   en*able/Orcom, net of $863 and
     $4,150 of tax                               -       (1,350)           -       (6,491)
                                                     ----------                ----------
                                                     $   (8,925)               $  (40,499)
                                                     ==========                ==========
</TABLE>
<TABLE>
<CAPTION>

                                                    September 30, 2000
                                        -------------------------------------------
                                        Gathering and  International
                                         Processing     Operations        Total
                                        -------------  -------------  -------------
Balance Sheet Data                                    (In Thousands)
------------------
<S>                                      <C>            <C>            <C>
Net Current Assets of Discontinued Operations:
  Cash and Cash Equivalents               $    5,093     $    2,617     $    7,710
  Restricted Deposits                         12,198              -         12,198
  Accounts Receivable                         58,631          2,356         60,987
  Inventories                                    196          1,164          1,360
  Gas Imbalances Receivable                   12,899              -         12,899
  Other Current Assets                         3,450            534          3,984
  Accounts Payable                           (71,628)        (2,592)       (74,220)
  Accrued Taxes                               (4,071)            (4)        (4,075)
  Gas Imbalances Payable                      (3,114)             -         (3,114)
  Other Current Liabilities                   (3,688)        (3,607)        (7,295)
                                          ----------     ----------     ----------
                                          $    9,966     $      468     $   10,434
                                          ==========     ==========     ==========
Net Non-current Assets of Discontinued Operations:
  Investments                             $   37,677     $   10,040     $   47,717
  Property, Plant and Equipment, Net         120,398         10,950        131,348
  Deferred Charges                            (9,297)         7,960         (1,337)
  Deferred Income Taxes                      (49,535)           780        (48,755)
  Minority Interests in Equity of
    Subsidiaries                             (53,646)          (767)       (54,413)
                                          ----------     ----------     ----------
                                          $   45,597     $   28,963     $   74,560
                                          ==========     ==========     ==========
</TABLE>


In  our 1999 Form 10-K and our Form 10-Qs filed for the first and
second  quarters of 2000, we provided information on the progress
made in disposing of our discontinued businesses.  On October 30,
2000, we  announced that  we had entered into a definitive agree-
ment with Tom  Brown, Inc.  to  distribute  all the assets of the
Wildhorse  Energy Partners,  LLC  joint venture to the members in
anticipation  of  dissolution  of the joint  venture.  Formed  in
1996, Wildhorse is owned  55  percent by us and 45 percent by Tom
Brown.   Wildhorse  will distribute all of the gathering and pro-
cessing assets to Tom Brown  and  we  will receive the Wolf Creek
storage  facility and cash in a transaction expected to close  on
or before November 30, 2000. The remaining assets associated with
discontinued operations, representing a relatively small percent-
age of the total operations discontinued as of December 31, 1999,
are  in  various stages of the disposition process.  Our  divest-
iture  process  is expected to be substantially completed  during
2000.


<PAGE> 11

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

In  September  1999,  certain of our  wholly  owned  subsidiaries
entered  into  a  five-year  agreement  to  sell  their  accounts
receivable  in  a  transaction accounted for  as  a  sale.   This
transaction  and  the associated accounting is discussed  in  our
1999  Form 10-K.  We received $150 million in proceeds  from  the
sale  of receivables on September 30, 1999.  In the first quarter
of  2000,  we  reduced our participation in this receivable  sale
program  by $124.9 million, principally as a result of the  then-
pending disposition of our wholesale gas marketing business.   On
April  25,  2000, we repaid the residual balance  and  terminated
this agreement.

8.   Supplemental Cash Flow Information
     ----------------------------------

We  consider  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
Provided   by   Operating   Activities"   in   the   accompanying
Consolidated  Statements  of  Cash Flows  includes,  among  other
things,   equity   in  undistributed  earnings   or   losses   of
unconsolidated  subsidiaries (other  than  Kinder  Morgan  Energy
Partners) and joint ventures.

                                                      Nine Months Ended
                                                        September 30,
                                                  --------------------------

                                                     2000           1999
                                                  -----------    -----------
                                                        (In Thousands)
CHANGES IN OTHER WORKING CAPITAL ITEMS
  (Net of Effects of Acquisitions and Sales)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Accounts Receivable                               $   (2,518)    $   24,769
Materials and Supplies Inventory                      (1,688)           912
Gas in Underground Storage - Current                  (5,463)        (4,788)
Other Current Assets                                 (30,169)       (17,638)
Accounts Payable                                      89,406        (90,338)
Other Current Liabilities                            (52,793)       (20,924)
                                                  ----------     ----------
                                                  $   (3,225)    $ (108,007)
                                                  ==========     ==========
 SUPPLEMENTAL CASH FLOW INFORMATION

Cash Paid During the Period for:
   Interest, Net of Amount Capitalized            $  224,261     $  250,598
                                                  ==========     ==========
   Distributions on Preferred Capital Trust
     Securities                                   $   10,956     $   10,956
                                                  ==========     ==========
   Income Taxes                                   $    7,141     $    5,449
                                                  ==========     ==========


9.   Business Segments
     -----------------

In  accordance with the manner in which we currently  manage  our
businesses, including the allocation of capital and evaluation of
business  unit  performance,  we report  our  operations  in  the
following  segments: (1) Natural Gas Pipeline Company of  America
and  certain associated entities, referred to as Natural, a major
interstate  natural gas pipeline system; (2) Kinder Morgan  Texas
Pipeline  and certain associated entities, referred to as  Kinder
Morgan Texas, a major intrastate natural gas pipeline system; (3)
Retail,  the (largely regulated) distribution of natural  gas  to
retail customers and (4) Power and Other, the generation and sale
of  electric  power, together with various other  activities  not
constituting business segments.  Prior to our December  31,  1999
sale to Kinder Morgan Energy Partners (see Note 5), we also owned
and  operated  Kinder  Morgan Interstate.  In  October  2000,  we
announced  that  we  would contribute several  assets  to  Kinder
Morgan  Energy Partners,

<PAGE> 12

including Kinder Morgan Texas  Pipeline.  Additional  information
on  this  pending  transaction  is  contained in  Note  5  of the
accompanying Notes to Consolidated Financial Statements.

The  accounting  policies we apply in the generation  of  segment
information are generally the same as those described in  Note  1
of  Notes  to Consolidated Financial Statements included  in  our
1999  Form  10-K, except that items below the "Operating  Income"
line  are  either not allocated to business segments or  are  not
considered  by  Management  in its evaluation  of  business  unit
performance.   In addition, certain items included  in  operating
income  (such  as  general and administrative expenses)  are  not
allocated  to individual business segments.  With adjustment  for
these  items, we currently evaluate business segment  performance
primarily based on operating income in relation to the  level  of
capital employed.  Intersegment sales are accounted for at market
prices, while asset transfers are made at either market value or,
in  some  instances,  book value.  As necessary  for  comparative
purposes,   prior   period  results  and   balances   have   been
reclassified to conform to the current presentation.

BUSINESS SEGMENT INFORMATION (In Thousands)

<TABLE>
<CAPTION>

                       Three Months Ended September 30, 2000        Three Months Ended September 30, 1999
                     ------------------------------------------   ------------------------------------------
                      Operating       Revenues                     Operating       Revenues
                    Income Before       From                     Income Before       From
                      Corporate       External     Intersegment    Corporate       External     Intersegment
                        Costs        Customers       Revenues        Costs        Customers       Revenues
                     ------------   ------------   ------------   ------------   ------------   ------------
<S>                 <C>             <C>            <C>            <C>           <C>             <C>

Natural (NGPL)       $   82,305      $  172,160     $        -     $   78,805    $  154,341      $      190
Kinder Morgan
 Interstate (KMIGT)           -               -              -         14,543        21,382           7,273
Retail                    4,875          41,585              -         (1,399)       31,104              59
Kinder Morgan Texas
 (KMTP)                   3,957         515,694              -          1,726       275,975               -
Power and Other           8,912          19,624             49          5,545        13,880              49
                     ----------      ----------     ----------     ----------    ----------      ----------
  Consolidated          100,049      $  749,063     $       49         99,220    $  496,682      $    7,571
                                     ==========     ==========                   ==========      ==========
General and
 Administrative
 Expenses               (14,553)                                      (26,825)
Merger-related
 Costs                        -                                       (10,962)
                     ----------                                    ----------
Operating Income         85,496                                        61,433
Other Income and
 (Deductions)           (41,129)                                      (51,783)
                     ----------                                    ----------
Income from
 Continuing
 Operations Before
 Income Taxes        $   44,367                                    $    9,650
                     ==========                                    ==========
</TABLE>

<TABLE>
<CAPTION>

                        Nine Months Ended September 30, 2000         Nine Months Ended September 30, 1999
                    -----------------------------------------    -------------------------------------------
                      Operating       Revenues                     Operating       Revenues
                    Income Before       From                     Income Before       From
                      Corporate       External     Intersegment    Corporate       External     Intersegment
                        Costs        Customers       Revenues        Costs        Customers       Revenues
                    -------------  -------------  -------------  -------------  -------------  -------------
<S>                 <C>            <C>            <C>             <C>            <C>            <C>
Natural (NGPL)       $  253,501     $  441,031     $      (18)     $  224,528     $  459,256     $    1,132
Kinder Morgan
 Interstate (KMIGT)           -              -              -          41,285         70,025         10,032
Retail                   30,993        146,171              -          14,714        137,164             64
Kinder Morgan Texas
 (KMTP)                  18,384      1,139,124              -          12,826        644,418              -
Power and Other          23,189         53,093             97          18,645         44,813            146
                     ----------     ----------     ----------      ----------     ----------     ----------
  Consolidated          326,067     $1,779,419     $       79         311,998     $1,355,676     $   11,374
                                    ==========     ==========                     ==========     ==========
General and
 Administrative
 Expenses               (42,701)                                      (72,060)
Merger-related
 Costs                        -                                       (10,962)
                     ----------                                    ----------
Operating Income        283,366                                       228,976
Other Income and
 (Deductions)          (120,801)                                     (159,838)
                     ----------                                    ----------
Income from
 Continuing
 Operations Before
 Income Taxes       $  162,565                                     $   69,138
                    ==========                                     ==========

</TABLE>

<PAGE> 13

<TABLE>
<CAPTION>
                                                   Assets at September 30, 2000
                         --------------------------------------------------------------------------------
                                         Kinder
                                         Morgan                     Kinder         Power
                           Natural     Interstate      Retail    Morgan Texas    and Other     Consolidated
                         ------------ ------------  ------------ ------------  --------------  ------------
<S>                      <C>          <C>           <C>          <C>          <C>              <C>
                                                          (In Thousands)
Continuing Operations    $5,505,690   $        -     $  405,476   $  327,491   $2,200,905 (1)   $8,439,562
Discontinued Operations                                                                             84,994
                                                                                                ----------
Consolidated                                                                                    $8,524,556
                                                                                                ==========
(1)Principally the investment in Kinder Morgan Energy Partners

</TABLE>

GEOGRAPHIC INFORMATION

All  but an insignificant amount of our assets and operations are
located in the continental United States.

10.  Financing
     ---------

We  have  available a $500 million 364-day credit facility  dated
October  25, 2000 (which contains terms and covenants similar  to
our prior facility) and a $400 million amended and restated five-
year  revolving credit agreement dated January 30,  1998.   These
bank  facilities  can  be  used for general  corporate  purposes,
including  backup for our commercial paper program,  and  include
covenants  which are common in such arrangements.  Our 1999  Form
10-K  contains additional information concerning these covenants.
Under  these bank facilities, we are required to pay  a  facility
fee  based on the total commitment, whether used or unused, at  a
rate  which varies based on our senior debt rating.   We  had  no
borrowings under our bank facilities at September 30, 2000 or  at
October  25,  2000.   Because we have both  the  intent  and  the
ability  (through our five-year revolving credit facility) to re-
finance  our  commercial paper borrowings and the current maturi-
ties  of  our long-term debt on a long-term basis, these liabili-
ties,  totaling $269.4  million  at September 30, 2000, have been
included  with  "Long-term Debt" in the accompanying Consolidated
Balance Sheet.

The  commercial paper we issue, which is supported  by  the  bank
facilities,  is  comprised  of unsecured  short-term  notes  with
maturities  not  to  exceed 270 days  from  the  date  of  issue.
Commercial  paper outstanding at September 30, 2000  and  October
25,  2000  was  $261.2 million and $256.5 million,  respectively.
Our  weighted-average  interest  rate  on  short-term  borrowings
outstanding  at  September 30, 2000 was  6.98  percent.   Average
short-term  borrowings outstanding during the  third  quarter  of
2000  were $240.3 million and our weighted-average  interest rate
was  6.78  percent.   Average  short-term borrowings  outstanding
during the first nine months of 2000 were $343.8  million and our
weighted-average interest rate was 6.42 percent.

On  October  19, 2000, our Board of Directors declared  a  common
stock dividend of $0.05 per share payable on November 14, 2000 to
shareholders of record as of October 31, 2000.

11.  Regulatory Matters
     ------------------

On  July  17, 2000, Natural filed its Compliance Plan,  including
pro  forma tariff sheets, pursuant to FERC's Order Nos.  637  and
637-A.   The FERC directed all interstate pipelines to  file  pro
forma tariff sheets to comply with new regulatory requirements in
the    Orders    regarding   scheduling   procedures,    capacity
segmentation, imbalance management services and penalty  credits,
or  in  the  alternative, to explain why no changes  to  existing
tariff  provisions are necessary. Natural's filing  is  currently
pending FERC action and any changes to its tariff provisions  are
not  expected  to  take effect until after the entire  Order  637
process is finished for all interstate pipelines.

<PAGE> 14

On May 10, 2000, Chesapeake Panhandle Limited Partnership filed a
complaint  with  the  FERC against Natural, MidCon  Gas  Products
Corp.,  MidCon Gas Services Corp., K N Energy, Inc. and us.   The
complaint  alleges  that Natural collected an unlawful  gathering
rate  from Chesapeake for the period March 1998 through  December
1999.  Chesapeake is seeking a refund totaling $5.2 million.   We
have responded and denied the allegations.  On July 27, 2000, the
FERC   issued  an  order  commencing  a  preliminary   non-public
investigation  into  the  complaint.  We  believe  that  we  have
meritorious defenses to the claim.

12.  Comprehensive Income
     --------------------

Statement of Financial Accounting Standards No. 130, Reporting of
Comprehensive  Income, requires that enterprises report  a  total
for  comprehensive  income.   The only  difference  between  "net
income" and "comprehensive income" for us has been the unrealized
gain  or  loss on our investment in available-for-sale securities
which was recorded directly to stockholders' equity.  During  the
quarter  ended  March  31,  2000,  we  sold  our  only  remaining
available-for-sale securities.

<TABLE>
<CAPTION>
                                    Three Months Ended        Nine Months Ended
                                      September 30,             September 30,
                                 ------------------------  ------------------------
                                    2000         1999         2000         1999
                                 -----------  -----------  -----------  -----------
<S>                             <C>          <C>          <C>          <C>
                                               (Millions of Dollars)
Net Income                       $     26.6   $    (14.5)  $     97.5   $     (9.8)
Gain (Loss) From Available-for-
 Sale Securities                          -         (0.5)         1.6          2.5
                                 ----------   ----------   ----------   ----------
Comprehensive Income (Loss)      $     26.6   $    (15.0)  $     99.1   $     (7.3)
                                 ==========   ==========   ==========   ==========

</TABLE>

13.  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  derivative's  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 trans-
actions that receive hedge accounting.

The  Statement is effective for fiscal years beginning after June
15,  2000.   The Statement cannot be applied retroactively.   The
Statement must be applied to (i) derivative instruments and  (ii)
certain derivative instruments embedded in hybrid contracts  that
were  issued, acquired, or substantively modified after  December
31,  1997  (and, at our election, before January  1,  1998).   We
enter  into  derivatives  contracts solely  for  the  purpose  of
hedging exposures which accompany our normal business activities.
Because (i) we currently report our derivatives at fair value  in
our  consolidated  balance  sheets,  (ii)  the  majority  of  our
derivatives activities would be considered cash flow hedges under
the   Statement,  (iii)  the  Statement  provides   for   hedging
accounting treatment for this use of derivatives and (iv) because
we do not expect any material amount of hedge ineffectiveness, no
material impact on our earnings or financial position is expected
to result from adoption of the Statement.

<PAGE> 15

14.  Interest Expense, Net
     ---------------------

"Interest   Expense,  Net"  as  presented  in  the   accompanying
Consolidated  Statements  of  Income  is  net  of  (i)  the  debt
component  of  the  allowance for funds used during  construction
("AFUDC  -  Interest"), (ii) in 1999, interest income related  to
government securities associated with the acquisition  of  MidCon
Corp.   (see  Note  1(K)  of  Notes  to  Consolidated   Financial
Statements included in our 1999 Form 10-K) and (iii) in the first
quarter  of  2000,  interest  income  attributable  to  our  note
receivable from Kinder Morgan Energy Partners associated with the
sale of certain interests (see Note 5).

                       Three Months Ended          Nine Months Ended
                          September 30,              September 30,
                    ------------------------    ------------------------
                                       (In Thousands)

                        2000         1999           2000         1999
                    -----------  -----------    -----------  -----------

AFUDC - Interest      $   713      $   388        $ 1,710      $   699
Interest Income       $     -      $     -        $ 2,647      $   480

15.  Other, Net
     ----------

"Other,  Net"  as  presented  in  the  accompanying  Consolidated
Statement of Income for the three months ended September 30, 1999
principally consists of (i) an $11.4 million gain from  the  sale
of certain offshore assets, and (ii) a $2.2 million gain from the
sale  of  Tom  Brown, Inc. Preferred Stock.  For the nine  months
ended  September 30, 1999, "Other, Net" principally  consists  of
(i)  the  $28.9  million gain from the sale of  certain  offshore
assets and (ii) the $2.2 million gain from the sale of Tom Brown,
Inc.  Preferred  Stock.  "Other, Net" for the nine  months  ended
September 30, 2000, principally consists of (i) $4.1 million  due
to  the  recovery of note receivable proceeds in  excess  of  its
carrying  value, (ii) $3.9 million attributable to the settlement
of  a  regulatory matter for an amount less than that  previously
reserved  and (iii) $1.3 million attributable to a gain from  the
sale of Tom Brown, Inc. Common Stock.  Note 5 contains additional
information on certain of these matters.

16.  Environmental and Legal Matters
     -------------------------------

(A)    Environmental Matters

On  December 20, 1999, the U.S. Department of Justice (DOJ) filed
a  Complaint  against Natural on behalf of the U.S. Environmental
Protection  Agency  (EPA)  in  the  Federal  District  Court   of
Colorado,  Civil  Action 99-S-2419.  The Complaint  alleged  that
Natural failed to obtain all of the necessary air quality permits
in  1979 when it constructed the Akron Compressor Station,  which
consisted  of three compressor engines in Weld County,  Colorado.
Natural  and  the EPA, through the DOJ, have reached a  tentative
settlement  of  this issue.  The EPA has agreed  to  dismiss  all
allegations  and  claims upon completion  of  the  terms  of  the
settlement.

Based  on  current information, we do not believe that compliance
with  federal, state and local environmental laws and regulations
will  have a material adverse effect on our business, cash flows,
financial  position or results of operations.  In  addition,  the
clean-up  programs in which we are engaged are  not  expected  to
interrupt  or  diminish  our ability to operate  our  businesses.
However, there can be no assurances that future events,  such  as
changes  in existing laws, the promulgation of new laws,  or  the
development of new facts or conditions will not cause us to incur
significant costs.

<PAGE> 16

See  Note  9(A) of Notes to Consolidated Financial Statements  in
our   1999   Form  10-K  for  additional  information   regarding
environmental matters.

(B)    Litigation Matters

"K  N  TransColorado,  Inc.  v.  TransColorado  Gas  Transmission
Company, et. al," Case No. 00-CV-129, District Court,  County  of
Garfield, State of Colorado.  On June 15, 2000, K N TransColorado
filed  suit  against  Questar TransColorado and  several  of  its
affiliated  Questar  entities, asserting  claims  for  breach  of
fiduciary   duties,  breach  of  contract,  constructive   trust,
rescission of the partnership agreement, breach of good faith and
fair dealing, tortious concealment, misrepresentation, aiding and
abetting  a  breach  of  fiduciary  duty,  dissolution   of   the
TransColorado  partnership, and seeking a  declaratory  judgment,
among other claims.  The TransColorado partnership has been  made
a  defendant  for purposes of an accounting.  The  lawsuit  stems
from  Questar's failure to support the TransColorado partnership,
together  with  its decision to seek regulatory  approval  for  a
project  that  competes with the Partnership, in  breach  of  its
fiduciary  duties  as  a  partner.  K N  TransColorado  seeks  to
recover  damages  in  excess of $152  million  due  to  Questar's
breaches  and, in addition, seeks punitive damages.  In  response
to the complaint, on July 28, 2000, the Questar entities filed  a
counterclaim and third party claims against us and certain of our
entities for claims arising out of the construction and operation
of  the TransColorado pipeline project.  The claims allege, among
other things, that the Kinder Morgan entities interfered with and
delayed  construction of the pipeline and made misrepresentations
about  marketing  of  capacity.  The  Questar  entities  seek  to
recover  damages in excess of $185 million for an alleged  breach
of fiduciary duty and other claims.

"Jack J. Grynberg v. K N Energy, Inc., Rocky Mountain Natural Gas
Company, and GASCO, Inc.," Civil Action No. 92-N-2000. On October
9,  1992,  Jack  J.  Grynberg filed suit  in  the  United  States
District Court  for the District  of  Colorado against  us, Rocky
Mountain Natural Gas Company and GASCO, Inc. alleging that  these
entities, the K N Entities,  as  well  as K N  Production Company
and K N Gas Gathering,  Inc.,  have  violated  federal  and state
antitrust laws.  In  essence, Grynberg asserts that the companies
have  engaged  in  an  illegal exercise of monopoly  power,  have
illegally  denied him economically feasible access  to  essential
facilities to store, transport and distribute gas,  and illegally
have attempted to monopolize or to enhance or maintain an  exist-
ing  monopoly.  Grynberg  also asserts  certain  state causes  of
action relating to a gas  purchase contract.  In  February  1999,
the  Federal District Court granted summary judgment  for the K N
Entities as to some of Grynberg's antitrust and state law claims,
while  allowing other claims to  proceed  to  trial.  In addition
to monetary damages, Grynberg has requested that the K N Entities
be ordered to  divest  all  interests in natural gas exploration,
development and production properties, all interests in distribu-
tion  and marketing operations,  and all interests in natural gas
storage facilities, in order to separate these interests from our
natural  gas  gathering and transportation  system  in  northwest
Colorado.  No trial date has been set.

"Jack  J.  Grynberg, individually and as general partner  for the
Greater  Green  River  Basin Drilling  Program:  72-73  v.  Rocky
Mountain Natural Gas Company and K N Energy, Inc.," Case  No. 90-
CV-3686.  On June 5, 1990, Jack J. Grynberg filed suit, which  is
presently   pending  in  Jefferson  County  District  Court   for
Colorado,  against  Rocky Mountain Natural  Gas  Company  and  us
alleging  breach  of  contract and fraud.  In  essence,  Grynberg
asserts  claims that the named companies failed to  pay  Grynberg
the  proper  price,  impeded the flow of  gas,  mismeasured  gas,
delayed his development of gas reserves, and other claims arising
out  of  a  contract  to purchase gas from a field  in  northwest
Colorado.  On February 13, 1997, the trial judge entered  partial
summary  judgment for Mr. Grynberg on his contract claim that  he
failed  to  receive the proper price for his  gas.   This  ruling
followed  an appellate decision which was adverse to  us  on  the
contract  interpretation of the price issue, but  which  did  not
address  the  question of whether Grynberg could legally  receive
the  price  he  claimed or whether he had illegally diverted  gas
from  a  prior  purchase.  On August 29, 1997,  the  trial  judge
stayed the

<PAGE> 17

summary judgment pending resolution of a proceeding at  the  FERC
to  determine  if Grynberg was entitled to administrative  relief
from  an  earlier dedication of the same gas to  interstate  com-
merce.  The  background  of  that proceeding is described in  the
immediately   following  paragraph.   On  March  15,   1999,   an
Administrative Law Judge for the FERC ruled, after an evidentiary
hearing, that Mr. Grynberg had illegally diverted the gas when he
entered  the  contract  with  the named  companies  and  was  not
entitled  to  relief.  Grynberg filed exceptions to this  ruling.
In  late  March 2000, the FERC issued an order affirming in  part
and  denying  in  part the motions for rehearing of  its  Initial
Decision.   The  action in Colorado remains stayed pending  final
resolution of the FERC proceeding.

"Jack J. Grynberg v. Rocky  Mountain Natural Gas Company," Docket
No.  GP91-8-008.  On May 8, 1991, Grynberg filed a  petition  for
declaratory  order with the FERC seeking a determination  whether
he  was  entitled  to the price he seeks in the Jefferson  County
District   Court  proceeding  referred  to  in  the   immediately
preceding   paragraph.   While  Grynberg  initially  received   a
favorable  decision from the FERC, that decision was reversed  by
the Court of Appeals for the District of Columbia Circuit on June
6,  1997.   This  matter  has  been  remanded  to  the  FERC  for
subsequent  proceedings.  The matter was  set  for  an  expedited
evidentiary hearing, and an Initial Decision favorable  to  Rocky
Mountain  was issued on March 15, 1999.  That decision determined
that  Grynberg  had intentionally diverted gas  from  an  earlier
dedication to interstate commerce in violation of the Natural Gas
Act  and  denied  him equitable administrative relief.   Grynberg
filed  exceptions to this Initial Decision.  In late March  2000,
the  FERC issued an order affirming in part and denying  in  part
the  motions  for  rehearing of its Initial Decision.   In  April
2000, we, together with the other parties, filed for rehearing.

"United  States  of  America, ex rel., Jack J.  Grynberg  v.  K N
Energy," Civil  Action No. 97-D-1233, filed in the U.S.  District
Court,  District of Colorado.  This action was filed pursuant  to
the   federal  False  Claim  Act  and  involves  allegations   of
mismeasurement  of natural gas produced from federal  and  Indian
lands.  The Department of Justice  has  decided not to  intervene
in support  of the action.  The  complaint is  part  of  a larger
series of  similar  complaints  filed by Mr. Grynberg  against 77
natural  gas  pipelines (approximately 330 other defendants).  An
earlier  single  action  making substantially similar allegations
against the pipeline industry was dismissed by Judge Hogan of the
U.S. District Court for  the District of Columbia  on grounds  of
improper  joinder  and  lack of jurisdiction.  As  a result,  Mr.
Grynberg filed individual complaints in various courts throughout
the  country.  These  cases were  recently  consolidated  by  the
Judicial  Panel for Multidistrict Litigation, and  transferred to
the  District  of  Wyoming.  Motions  to  Dismiss were  filed  on
November  19, 1999.  Plaintiff  filed his response on January 14,
2000 and defendants filed their Reply Brief on February 14, 2000.
An  oral argument on the Motion to Dismiss occurred on  March 17,
2000.  On  July 20, 2000 the  United  States  of  America filed a
motion  to dismiss  those claims  by Grynberg that deal  with the
manner  in  which  defendants valued gas  produced  from  federal
leases.

"Quinque  Operating  Company, et. al. v. Gas Pipelines, et. al.,"
Cause  No.  99-1390-CM,  United States  District  Court  for  the
District  of Kansas.  This action was originally filed in  Kansas
state  court in Stevens County, Kansas as a class action  against
approximately  245  pipeline  companies  and  their   affiliates,
including certain Kinder Morgan entities.  The plaintiffs in  the
case  purport  to represent a class of natural gas producers  and
fee  royalty  owners who allege that they have  been  subject  to
systematic gas mismeasurement by the defendants for more than  25
years.  Subsequently, one of the defendants removed the action to
Kansas  Federal  District Court.  Thereafter, we filed  a  motion
with   the   Judicial  Panel  for  Multidistrict  Litigation   to
consolidate  this action for pretrial purposes with the  Grynberg
False  Claim  Act  cases  referred to above,  because  of  common
factual questions.  On April 10, 2000, the MDL Panel ordered that
this  case be consolidated with the Grynberg federal False Claims
Act cases.

<PAGE> 18

"Dirt  Hogs,  Inc. v. Natural Gas Pipeline Company of America, et
al."  There have been several related cases with Dirt Hogs,  Inc.
with  allegations  of breach of contract, false  representations,
improper   requests   for  kickbacks  and  other   improprieties.
Essentially,  the  plaintiff claims  that  it  should  have  been
awarded  extensive  pipeline reclamation work without  having  to
qualify  or bid as a qualifying contractor.  Case No. Civ-98-231-
R,  is a case which was dismissed in the U.S. District Court  for
the Western District of Oklahoma because of pleading deficiencies
and is now on appeal to the 10th Circuit (Case No. 99-6-026).  On
April  10,  2000, the 10th Circuit upheld the dismissal  of  this
action.    Another  case,  arising  out  of  the   same   factual
allegations, was filed by Dirt Hogs in the District Court,  Caddo
County,  Oklahoma  (Case No. CJ-99-92), on March  29,  1999.   By
agreement  of  all parties, this action is currently  stayed.   A
third  related  case,  styled "Natural  Gas  Pipeline  Company of
America, et al. v. Dirt Hogs, Inc." (Case No. 99-360-R), resulted
in  a  default  judgement  against Dirt  Hogs.   After  initially
appealing the default judgement, Dirt Hogs dismissed their appeal
on September 1, 1999.

"K N  Energy,  Inc.,  et  al. v. James P.  Rode  and  Patrick  R.
McDonald," Case  No.  99CV1239,  filed  in  the  District  Court,
Jefferson    County,    Division   8,    Colorado.     Defendants
counterclaimed  and filed third party claims against  several  of
our  former officers and/or directors.  Messrs. Rode and McDonald
are former principal shareholders of Interenergy Corporation.  We
acquired  Interenergy on December 19, 1997 pursuant to  a  Merger
Agreement dated August 25, 1997.  Rode and McDonald allege that K
N  Energy  committed  securities  fraud,  common  law  fraud  and
negligent  misrepresentation  as  well  as  breach  in  contract.
Plaintiffs  are  seeking  an unspecified amount  of  compensatory
damages,  greater than $2 million, plus unspecified exemplary  or
punitive  damages, attorney's fees and their costs.  We  filed  a
motion  to  dismiss, and on April 21, 2000, the Jefferson  County
District  Court  Judge  dismissed the case  against  us  and  the
individuals  with  prejudice.  Defendants also  filed  a  federal
securities fraud action in the United States District  Court  for
the  District  of Colorado on January 27, 2000 titled: "James  P.
Rode  and Patrick R. McDonald v. K N Energy, Inc., et al.," Civil
Action  No.  00-N-190.  This case initially raised the  identical
state  law  claims contained in the counterclaim and third  party
complaint  in  state court.  Rode and McDonald filed  an  amended
Complaint, which dropped the state-law claims.  This Complaint is
now  the subject of a motion to dismiss filed by defendants.  The
case  has  been  stayed pending the  outcome  of  these  motions.
A  third  related  class  action  case styled,"  Adams vs. Kinder
Morgan, Inc.,  et. al.," Civil Action No. 00-M-516, in the United
States District Court for the District of Colorado  was served on
us  on April 10, 2000.  As of this date no class has been  certi-
fied.  We have filed a motion to dismiss this  case, and the case
has been stayed pending the resolution of this motion.

We  believe that we have meritorious defenses to all lawsuits and
legal  proceedings in which we are defendants and will vigorously
defend  against  them.   Based on our  evaluation  of  the  above
matters,  and  after  consideration of reserves  established,  we
believe  that  the resolution of such matters  will  not  have  a
material  adverse effect on our business, financial  position  or
results of operations.

See  Note  9(B) of Notes to Consolidated Financial Statements  of
our  1999  Form  10-K for additional information regarding  legal
matters.

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

General
-------

The  following discussion should be read together  with  (i)  the
accompanying consolidated financial statements and related  notes
and  (ii) the consolidated financial statements and related notes
and  Management's Discussion and Analysis of Financial  Condition
and  Results of Operations included in our 1999 Form  10-K.   For
various  reasons, including seasonal variations in energy  demand
and  prices,  the  interim results that follow may  not  directly
suggest what level of earnings to expect for an entire year.   In
addition,  certain previously reported

<PAGE> 19

amounts  have  been placed under different captions in the finan-
cial  statements in order  to report them where comparable  items
are currently recorded.

We  have  both acquired and disposed of assets and businesses  in
the recent past.  In October 2000, we announced our intention  to
contribute  several  assets  to Kinder  Morgan  Energy  Partners,
including  Kinder Morgan Texas Pipeline.  These  changes  in  the
makeup  of  our portfolio of businesses may affect the comparison
of operating results and financial position between periods.  Our
1999  Form  10-K and Notes 2 and 5 of the accompanying  Notes  to
Consolidated  Financial Statements contain  more  information  on
these transactions.

We   manage  our  various  businesses  by,  among  other  things,
allocating  capital and monitoring operating  performance.   This
management  process  includes dividing the overall  Company  into
business   segments  so  that  performance  can  be   effectively
monitored  and  reported for a limited number of discrete  units.
Currently, we report our operations in the following segments:

<TABLE>
<CAPTION>

Business Unit                      Business Conducted              Referred to As:
-------------                      ------------------              ---------------
<S>                               <C>                             <C>
Natural Gas Pipeline Company of    Major interstate natural        Natural
   America and certain affiliates  gas pipeline system

Kinder Morgan Texas Pipeline and   Major intrastate natural gas    Kinder Morgan Texas
   certain affiliates              pipeline system

Retail Natural Gas Distribution    The regulated sale of natural   Retail
                                   gas to residential, commercial
                                   and industrial customers

Power Generation and Other         The construction and operation  Power and Other
                                   of electric generation
                                   facilities, together with
                                   other activities not
                                   constituting business segments

</TABLE>

We also owned and operated Kinder  Morgan Interstate  Gas  Trans-
mission  LLC,  an  interstate natural  gas  pipeline  system, re-
ferred  to  in this report as Kinder Morgan Interstate, until  it
was sold to Kinder Morgan Energy Partners in December 1999.  That
sale  transaction,  which also included interests  in  two  joint
ventures, is discussed in our 1999 Form 10-K.

Certain information  contained in this  report  may include "for-
ward-looking statements" within the meaning of the Private Secur-
ities Litigation Reform Act of 1995. These statements are subject
to risks and uncertainties and  are  based  on  the  beliefs  and
assumptions  of  our  management, based on information  currently
available  to  our  management.  When words such  as  "believes,"
"expects,"   "anticipates,"  "intends,"   "plans,"   "estimates,"
"should"  or similar expressions are used, we are making forward-
looking statements.

Forward-looking  statements  are not guarantees  of  performance.
They  involve risks, uncertainties and assumptions.   Our  future
results  and stockholder values may differ materially from  those
expressed  in  these  forward-looking statements.   Many  of  the
factors  that will determine these results and values are  beyond
our   ability  to  control  or  predict.   These  statements  are
necessarily  based  upon various assumptions involving  judgments
with  respect to the future including, among others, the  ability
to   achieve   cost   savings  and  revenue   growth,   national,
international,  regional  and  local  economic,  competitive  and
regulatory conditions and

<PAGE> 20

developments,  technological  developments, capital market condi-
tions,  inflation  rates, interest rates, the political  and eco-
nomic stability of oil producing nations, energy markets, weather
conditions,  business and regulatory or legal decisions, the pace
of deregulation of retail natural gas and electricity, the timing
and  extent of changes  in commodity prices for oil, natural gas,
natural  gas  liquids, electricity and certain agricultural  pro-
ducts,  the timing  and  success of business development efforts,
and  other  uncertainties, all of which are difficult to  predict
and many of which  are beyond our control.  Readers are cautioned
not  to  put undue  reliance  on  any forward-looking statements.
For those statements, we claim the protection of the safe  harbor
for  forward-looking  statements contained in the Private Securi-
ties Litigation Reform Act of 1995.

<TABLE>
<CAPTION>

Consolidated Financial Results
------------------------------

                            Three Months Ended September 30,       Nine Months Ended September 30,
                          -----------------------------------    -----------------------------------
                                                    Increase                               Increase
                             2000         1999     (Decrease)       2000         1999     (Decrease)
                          -----------  ----------- -----------   -----------  ----------- -----------
                                            (In Thousands Except Per Share Amounts)
<S>                      <C>          <C>         <C>           <C>          <C>         <C>
Operating Revenues        $  749,063   $  496,682  $  252,381    $1,779,419   $1,355,676  $  423,743
Gross Margin                 172,693      178,391      (5,698)      545,704      583,159     (37,455)
General and
 Administrative Expenses      14,553       26,825     (12,272)       42,701       72,060     (29,359)
Merger-related Costs             N/A       10,962         N/A           N/A       10,962         N/A
Operating Income              85,496       61,433      24,063       283,366      228,976      54,390
Income From Continuing
  Operations                  26,628        5,886      20,742        97,539       42,174      55,365
Loss From Discontinued
  Operations, Net of Tax        N/A       (20,404)       N/A           N/A       (51,978)       N/A
Diluted Earnings (Loss)
  Per Share:
    Continuing Operations       0.23         0.08        0.15          0.85         0.59        0.26
    Discontinued
     Operations                 N/A         (0.28)       N/A           N/A         (0.74)       N/A

</TABLE>

Our results for the quarter ended September 30, 2000, reflect  an
increase  of  $252.4  million (50.8%) in  operating  revenues,  a
decrease  of $5.7 million (3.2%) in gross margin and an  increase
of  $24.1  million  (39.2%) in operating income  from  the  third
quarter  of  1999.   Operating results for 2000  do  not  include
revenues,  costs and expenses of Kinder Morgan Interstate,  which
was  sold to Kinder Morgan Energy Partners effective December 31,
1999.  The  increase in operating revenues is  due  to  increased
revenues  at  all operating segments, principally  Kinder  Morgan
Texas,   partially  offset  by  the  absence  of  Kinder   Morgan
Interstate revenues in the third quarter of 2000.  The decline in
gross  margin  principally reflects the  sale  of  Kinder  Morgan
Interstate.   General and administrative expenses decreased  from
$26.8  million in the third quarter of 1999 to $14.5  million  in
the  third  quarter of 2000, a decrease of $12.3 million  (45.7%)
due   to  cost  reductions  implemented  following  the  business
combination  with  Kinder Morgan Delaware as we discussed  in our
1999  Form 10-K.  These cost reductions principally resulted from
reductions  in  headcount and employee-related expenses, consoli-
dation  of  facilities  and other  efficiencies  associated  with
implementation  of the plan for combining the two  entities.  The
increased  operating income, which  occurred  despite the sale of
Kinder  Morgan Interstate,  reflects improved third-quarter  2000
performance by several operating segments as discussed following.

Our results for the nine months ended September 30, 2000, reflect
an  increase  of $423.7 million (31.3%) in operating revenues,  a
decrease  of $37.5 million (6.4%) in gross margin and an increase
of   $54.4   million  (23.8%)  in  operating  income   from   the
corresponding period of 1999.  Operating results for 2000 do  not
include revenues, costs and expenses of Kinder Morgan Interstate,
which  was  sold  to  Kinder  Morgan  Energy  Partners  effective
December 31, 1999.  The increase in operating revenues is due  to
increased revenues at all operating segments, principally  Kinder
Morgan  Texas,  partially offset by the absence of Kinder  Morgan
Interstate

<PAGE> 21

revenues in 2000 results.  The decline in gross margin principal-
ly reflects the  sale  of Kinder Morgan Interstate.  General  and
administrative expenses decreased from $72.1 million in the first
nine months of 1999 to $42.7 million in the first nine  months of
2000, a decrease of $29.4 million (40.7%) due  to cost  reduction
measures  implemented  following  the  business  combination with
Kinder  Morgan  Delaware.  The increased operating income,  which
occurred despite the sale of Kinder  Morgan Interstate,  reflects
improved  2000  performance by several operating segments as dis-
cussed following.

The  operating results by individual segment and explanations  of
significant  variances  in  results  which  follow   are   before
intersegment eliminations.

<TABLE>
<CAPTION>
                                    Three Months Ended September 30,     Nine Months Ended September 30,
 Natural Gas Pipeline Company       ---------------------------------   ---------------------------------
 ----------------------------                               Increase                            Increase
   of America                          2000        1999    (Decrease)      2000       1999     (Decrease)
   ----------                       ----------  ---------- ----------   ---------- ----------  ----------
                                                  (In Thousands Except Systems Throughput)
<S>                                <C>         <C>        <C>          <C>        <C>         <C>
 Operating Revenues:
   Transportation and Storage       $ 114,529   $ 130,732  $ (16,203)   $ 373,821  $ 416,967   $ (43,146)
   Other                               57,632      23,799     33,833       67,193     43,421      23,772
                                    ---------   ---------  ---------    ---------  ---------   ---------
 Total Operating Revenues             172,161     154,531     17,630      441,014    460,388     (19,374)
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Costs and Expenses:
   Gas Purchases and Other Costs
    of Sales                           49,772      35,283     14,489       64,794     82,667     (17,873)
   Operations and Maintenance          13,945      13,545        400       44,348     48,031      (3,683)
   Depreciation and Amortization       21,021      21,082        (61)      63,336     88,270     (24,934)
   Taxes, Other Than Income Taxes       5,118       5,816       (698)      15,035     16,892      (1,857)
                                    ---------   ---------  ---------    ---------  ---------   ---------
 Total Operating Expenses              89,856      75,726     14,130      187,513    235,860     (48,347)
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Income Before Corporate
   Costs                            $  82,305   $  78,805  $   3,500    $ 253,501  $ 224,528   $  28,973
                                    =========   =========  =========    =========  =========   =========

 Systems Throughput (Trillion
   Btus)                                323.5       330.4       (6.9)     1,101.6     1091.2        10.4
                                    =========   =========  =========    =========  =========   =========

</TABLE>

Natural's  operating income before corporate costs  increased  by
$3.5  million (4.4%) in the third quarter of 2000 from the  third
quarter  of  1999.   Operating results for 2000  were  positively
affected, relative to 1999, by  (i) higher operational gas  sales
revenue   due  primarily  to  higher  gas  prices  and  increased
operational  efficiency and (ii) reduced ad valorem taxes.  These
positive  effects  were  partially offset  by  (i)  reduced  2000
revenues  due  to sales of certain gathering assets and  offshore
laterals  (see  Note 5 of the accompanying Notes to  Consolidated
Financial  Statements)  and  (ii) decreased  2000  unit  revenues
largely  attributable  to  both existing  and  planned  competing
pipeline   capacity  (with  the  attendant   reduced   value   of
transportation) in the upper Midwest, Natural's principal  market
area;  although, as discussed in our 1999 Form 10-K  and  in  our
Form  10-Qs for the first two quarters of 2000, Natural continues
to   experience  success  in  retaining  existing  customers  and
acquiring new customers.

Natural's operating income before corporate costs increased $29.0
million (12.9%) in the nine months ended September 30, 2000  from
the corresponding period in 1999.  Year-to-date 2000 results were
affected  positively,  relative to  1999,  by  the  same  factors
affecting   the  third  quarter,  as  discussed  preceding.    In
addition,  results  for 2000 were positively affected  by  (i)  a
reduction in amortization resulting from the July 1999 change  in
amortization  rates  (see  Note 4 of the  accompanying  Notes  to
Consolidated  Financial Statements), (ii) increased 2000  storage
activity, (iii) favorable gas imbalance resolutions in  2000  and
(iv)  reduced  2000 operations and maintenance  expenses  due  to
successful cost control measures. Year-to-date 2000 results  were
negatively affected, relative to 1999, by the absence,  in  2000,
of  revenues  from  assets that were sold and reduced  2000  unit
revenues  due  to market conditions as discussed in the  previous
paragraph.

<PAGE> 22

In  July  2000,  Natural  entered into agreements  with  Northern
Indiana  Public  Service  ("NIPSCO"), a subsidiary  of  NiSource,
Inc.,  to extend the terms of its firm natural gas transportation
and  storage  services.  The agreements total 295,100 MMBtus  per
day  of  capacity beginning December 1, 2000 and December 1, 2001
and  continuing  through November 30, 2002.  Natural  and  NIPSCO
also  extended the terms of two storage  agreements totaling 10.5
Bcf of capacity beginning  December 1,  2000  and  April  1, 2001
and continuing through March 31, 2003.

In  September  2000,  Natural announced that the  Federal  Energy
Regulatory  Commission would support issuing the  certificate  of
public  convenience and necessity to construct  and  operate  the
Horizon   pipeline.   Final  certification   awaits   a   pending
environmental  review.  The  Horizon Pipeline  Company,  a  joint
venture of Natural and Nicor Inc., has proposed to construct 28.5
miles   of   36-inch  diameter  pipe  and  8,900  horsepower   of
compression  facilities  and lease  380  MDth  per  day  of  firm
capacity on 42 miles of existing pipeline from Natural.  The  new
facilities  and leased capacity would allow Horizon to  transport
380  MDth  of  natural gas per day from near Joliet into  McHenry
County,  connecting the emerging supply hub at  Joliet  with  the
northern  part  of  the  Nicor  Gas distribution  system  and  an
existing  Natural  pipeline.  Construction  on  the  $75  million
pipeline  is  expected  to  begin in the  summer  of  2001,  with
completion  projected  in the spring  of  2002.   Nicor  Gas  has
committed to transport 300 MDth per day on the pipeline.

<TABLE>
<CAPTION>

                                              Three Months Ended    Nine Months Ended
 Kinder Morgan Interstate Gas Transmission    September 30, 1999   September 30, 1999
 -----------------------------------------    ------------------   ------------------
                                                    (In Thousands Except Systems
                                                            Throughput)
<S>                                              <C>                  <C>
 Operating Revenues:
   Transportation and Storage                     $    28,517          $    79,753
   Other                                                  138                  304
                                                  -----------          -----------
 Total Operating Revenues                              28,655               80,057
                                                  -----------          -----------

 Operating Costs and Expenses:
   Gas Purchases and Other Costs of Sales               2,992                3,683
   Operations and Maintenance                           4,844               16,291
   Depreciation and Amortization                        5,210               15,364
   Taxes, Other Than Income Taxes                       1,066                3,434
                                                  -----------          -----------
 Total Operating Expenses                              14,112               38,772
                                                  -----------          -----------

 Operating Income Before Corporate Costs          $    14,543          $    41,285
                                                  ===========          ===========


 Systems Throughput (Trillion Btus)                      52.3                155.6
                                                  ===========          ===========
</TABLE>

In  December  1999, we contributed Kinder Morgan  Interstate  and
Kinder  Morgan Trailblazer LLC (formerly NGPL-Trailblazer, Inc.),
as  well as our interest in Red Cedar Gathering Company to Kinder
Morgan  Energy Partners (see Note 5 of the accompanying Notes  to
Consolidated Financial Statements).

<PAGE> 23

<TABLE>
<CAPTION>

                                    Three Months Ended September 30,     Nine Months Ended September 30,
                                    ---------------------------------   ---------------------------------
                                                            Increase                            Increase
 Retail                                2000        1999    (Decrease)      2000       1999     (Decrease)
 ------                             ----------  ---------- ----------   ---------- ----------  ----------
                                                  (In Thousands Except Systems Throughput)
<S>                                <C>         <C>        <C>          <C>        <C>         <C>
 Operating Revenues:
   Gas Sales                        $  26,035   $  17,073  $   8,962    $ 103,094  $  94,747   $   8,347
   Transportation                      11,356      10,245      1,111       31,177     30,459         718
   Other                                4,194       3,846        348       11,900     12,023        (123)
                                    ---------   ---------  ---------    ---------  ---------   ---------
 Total Operating Revenues              41,585      31,164     10,421      146,171    137,229       8,942
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Costs and Expenses:
   Gas Purchases and Other Costs
    of Sales                           24,007      19,937      4,070       77,301     82,168      (4,867)
   Operations and Maintenance           9,258       8,916        342       27,342     29,312      (1,970)
   Depreciation and Amortization        2,928       2,841         87        8,705      8,526         179
   Taxes, Other Than Income Taxes         517         869       (352)       1,830      2,509        (679)
                                    ---------   ---------  ---------    ---------  ---------   ---------
 Total Operating Expenses              36,710      32,563      4,147      115,178    122,515      (7,337)
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Income Before
   Corporate Costs                  $   4,875   $  (1,399) $   6,274    $  30,993  $  14,714   $  16,279
                                    =========   =========  =========    =========  =========   =========
 Systems Throughput (Trillion
   Btus)                                 15.8        12.1        3.7         49.3       38.8        10.5
                                    =========   =========  =========    =========  =========   =========
</TABLE>

Retail's  operating  income before corporate costs  increased  by
$6.3  million in the third quarter of 2000 from the third quarter
of  1999.   Operating results for 2000 were positively  impacted,
relative  to  1999, by (i) increased irrigation volumes in  2000,
(ii) increased service revenues in 2000, (iii) reduced ad valorem
and  use  taxes  in  2000  and  (iv) reduced  costs  for  certain
administrative functions due to renegotiation of a contract  with
a third-party service provider.

Retail's operating income before corporate costs increased  $16.3
million  (110.6%)  in the nine months ended September  30,  2000,
from the corresponding period in 1999.  Year-to-date 2000 results
were  positively  affected, relative to 1999,  by  (i)  increased
system  throughput in 2000, although a portion of  this  increase
represents  volumes transported for relatively low margins,  (ii)
reduced cost of gas in 2000 achieved by utilizing lower cost  gas
from storage (Retail utilizes the average  cost  inventory method
for  its  gas  in underground storage), (iii) certain unfavorable
adjustments to gas costs affecting 1999 results  and (iv) reduced
2000 operating expenses.   These  reduced  operating expenses re-
sulted from (i) a reduction in advertising and marketing expenses
for  the  Choice Gas program, (ii) continued focus  on  efficient
operations and (iii) reduced ad valorem and use taxes.

<TABLE>
<CAPTION>

                                             Three Months Ended                     Nine Months Ended
                                               September 30,                          September 30,
                                    ------------------------------------   ------------------------------------
                                                              Increase                               Increase
 Kinder Morgan Texas Pipeline          2000         1999     (Decrease)       2000        1999      (Decrease)
                                    -----------  ----------- -----------   ----------- -----------  -----------
                                                     (In Thousands Except Systems Throughput)
<S>                                <C>          <C>         <C>           <C>         <C>          <C>
 Operating Revenues
   Gas Sales                        $  495,788   $  260,337  $  235,451    $1,084,635  $  604,124   $  480,511
   Transportation and Storage            5,938        5,238         700        18,361      17,595          766
   Other                                13,968       10,400       3,568        36,128      22,699       13,429
                                    ----------   ----------  ----------    ----------  ----------   ----------
 Total Operating Revenues              515,694      275,975     239,719     1,139,124     644,418      494,706
                                    ----------   ----------  ----------    ----------  ----------   ----------
 Operating Costs and Expenses:
   Gas Purchases and Other Costs
    of Sales                           497,776      261,005     236,771     1,081,135     594,791      486,344
   Operations and Maintenance           11,712       11,820        (108)       34,104      32,887        1,217
   Depreciation and Amortization           712          616          96         2,105       1,819          286
   Taxes, Other Than Income Taxes        1,537          808         729         3,396       2,095        1,301
                                    ----------   ----------  ----------    ----------  ----------   ----------
 Total Operating Expenses              511,737      274,249     237,488     1,120,740     631,592      489,148
                                    ----------   ----------  ----------    ----------  ----------   ----------

 Operating Income Before
   Corporate Costs                  $    3,957   $    1,726  $    2,231    $   18,384  $   12,826   $    5,558
                                    ==========   ==========  ==========    ==========  ==========   ==========
 Systems Throughput (Trillion
   Btus)                                 175.6        158.6        17.0         490.5       446.3         44.2
                                    ==========   ==========  ==========    ==========  ==========   ==========

</TABLE>

<PAGE> 24

In  October  2000, we announced that we would contribute  several
assets  to Kinder Morgan Energy Partners, including Kinder Morgan
Texas   Pipeline.    Additional  information  on   this   pending
transaction is contained in Note 5 of the accompanying  Notes  to
Consolidated Financial Statements.

Kinder  Morgan  Texas's operating income before  corporate  costs
increased by $2.2 million (129.3%) in the third quarter  of  2000
from   the  third  quarter  of  1999.   Operating  results   were
positively  impacted in 2000, relative to 1999, by (i)  increased
throughput volumes, principally due to additional gas  sales  and
(ii)  increased  natural gas liquids revenues resulting  from  an
increase  in the average price of natural gas liquids from  $0.36
per  gallon in 1999 to $0.53 per gallon in 2000.  These  positive
effects were partially offset by (i) slightly reduced natural gas
liquids  sales volumes, (ii) increased depreciation expenses  and
(iii) increased ad valorem taxes.

Kinder  Morgan  Texas's operating income before  corporate  costs
increased  by  $5.6  million (43.3%) in  the  nine  months  ended
September 30, 2000, from the corresponding period in 1999.  Year-
to-date  2000  results  were affected  principally  by  the  same
factors  affecting  the  third quarter, as  discussed  preceding,
except  that on a year-to-date basis, natural gas liquids volumes
were  higher in 2000 than in 1999.  The increased volumes in 2000
were  due to the fact that no processing was done in January  and
February of 1999 at a processing facility at which Kinder  Morgan
Texas  leases capacity. Year-to-date results were also negatively
impacted  by slightly higher operations and maintenance  expenses
in 2000.

On  October 31, 2000, Kinder Morgan Texas announced that  it  had
entered  into a long-term natural gas transportation and  storage
agreement  with Calpine Corporation, a fully integrated  electric
power company, making Kinder Morgan Texas the primary natural gas
transporter for Calpine in the Texas Gulf Coast and Houston  Ship
Channel  markets.  Under the agreement, which begins  January  1,
2001,  Calpine  will have access to up to 375,000 MMBtus of  firm
natural  gas  transportation service per day from  Kinder  Morgan
Texas  for  a  period of 10 years.  In July 2000,  Kinder  Morgan
Texas  announced that it had entered into a new natural gas sales
and transportation agreement with Calpine.  Under this agreement,
Kinder Morgan Texas will supply Calpine's  Pasadena II  gas-fired
cogeneration facility in Texas with  60,000 MMBtus of natural gas
per day - about 75 percent of the amount of natural gas the plant
will burn. The contract will continue through the summer of 2002.
Kinder Morgan Texas currently supplies 100 percent of the natural
gas Calpine burns at its Pasadena I plant.

<TABLE>
<CAPTION>
                                    Three Months Ended September 30,     Nine Months Ended September 30,
                                    ---------------------------------   ---------------------------------
                                                            Increase                            Increase
 Power and Other                       2000        1999    (Decrease)      2000       1999     (Decrease)
 ---------------                    ----------  ---------- ----------   ---------- ----------  ----------
                                                  (In Thousands Except Systems Throughput)
<S>                                <C>         <C>        <C>          <C>        <C>         <C>
 Operating Revenues                 $  19,674   $  13,929  $   5,745    $  53,191  $  44,959   $   8,232
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Costs and Expenses:
   Gas Purchases and Other Costs
    of Sales                            4,816       3,156      1,660       10,468      9,906         562
   Operations and Maintenance           3,526       2,924        602       12,231      9,900       2,331
   Depreciation and Amortization        2,351       1,925        426        6,638      5,685         953
   Taxes, Other Than Income Taxes          69         379       (310)         665        823        (158)
                                    ---------   ---------  ---------    ---------  ---------   ---------
 Total Operating Expenses              10,762       8,384      2,378       30,002     26,314       3,688
                                    ---------   ---------  ---------    ---------  ---------   ---------

 Operating Income Before
   Corporate Costs                  $   8,912   $   5,545  $   3,367    $  23,189  $  18,645   $   4,544
                                    =========   =========  =========    =========  =========   =========
</TABLE>

Power and Other operating income before corporate costs increased
by  $3.4  million (60.7%) in the third quarter of 2000  from  the
third quarter of 1999. Operating results were positively impacted
in 2000, relative to 1999, by

<PAGE> 25

(i)  profits from development of a 550-megawatt electric generat-
ing plant near Little Rock, Arkansas and (ii) increased  earnings
from   other  activities,  principally  our  agreement  with   HS
Resources,  Inc. as described in our 1999 Form 10-K.  These posi-
tive  effects  were partially  offset by (i) increased fuel costs
in 2000  for  power generation and (ii) increased 2000 operations
and maintenance and depreciation expenses.

Power and Other operating income before corporate costs increased
by  $4.5  million (24.4%) in the nine months ended September  30,
2000,  from the corresponding period in 1999.  Year-to-date  2000
results  were  affected by the same factors affecting  the  third
quarter, as discussed in the preceding paragraph.

<TABLE>
<CAPTION>

                                    Three Months Ended September 30,     Nine Months Ended September 30,
                                    ---------------------------------   ---------------------------------
                                                            Increase                            Increase
 Other Income and (Deductions)         2000        1999    (Decrease)      2000       1999     (Decrease)
 -----------------------------      ----------  ---------- ----------   ---------- ----------  ----------
                                                               (In Thousands)
<S>                                <C>         <C>        <C>          <C>        <C>         <C>
 Kinder Morgan Energy Partners:
   Equity in Earnings               $  34,562   $       -  $  34,562    $  99,287  $       -   $  99,287
   Amortization of Excess
    Investment                         (6,927)          -     (6,927)     (21,366)         -     (21,366)
 Equity in Earnings of Other
    Equity Investments                 (1,783)      1,783     (3,566)      (7,399)    12,312     (19,711)
 Interest Expense                     (61,594)    (61,410)      (184)    (184,463)  (187,223)      2,760
 Minority Interests                    (5,975)     (6,062)        87      (18,012)   (18,626)        614
 Other, Net                               588      13,906    (13,318)      11,152     33,699     (22,547)
                                    ---------   ---------  ---------    ---------  ---------   ---------
    Total                           $ (41,129)  $ (51,783) $  10,654    $(120,801) $(159,838)  $  39,037
                                    =========   =========  =========    =========  =========   =========
</TABLE>

The  equity  in  earnings of Kinder Morgan  Energy  Partners  and
associated amortization during 2000 result from our October  1999
acquisition  of  Kinder Morgan Delaware.   Kinder  Morgan  Energy
Partners'  Form  10-Q  for  the third quarter  of  2000  contains
additional  information  about its results  of  operations.   The
decrease in "Equity in Earnings of Other Equity Investments" from
the  third quarter of 1999 to the third quarter of 2000 and  from
the first nine months of 1999 to the first nine months of 2000 is
principally due to the sale of various equity method investments.
In  addition,  2000  results reflect increased  losses  from  the
TransColorado  pipeline joint venture.  "Other, Net" in the third
quarter of 2000 principally consists of  miscellaneous gains from
asset  sales.   Third-quarter 1999 "Other, Net" included  (i)  an
$11.4  million  gain from the sale of Stingray Pipeline  Company,
L.L.C.  and  (ii) a $2.2 million gain from the sale  of preferred
stock of Tom Brown, Inc.  Additional information on these matters
is  contained  in  Notes  2  and  5 of the  accompanying Notes to
Consolidated Financial Statements.

"Other,  Net"  for  the  nine months  ended  September  30,  2000
includes  (i) $4.1 million due to the recovery of note receivable
proceeds  in excess of its carrying value, (ii) $3.9 million  due
to  the settlement of a regulatory matter for an amount less than
that previously reserved, (iii) a $1.3 million gain from the sale
of  common stock of Tom Brown, Inc. and (iv) miscellaneous  gains
from  the sale of assets.  "Other, Net" for the nine months ended
September  30,  1999 included (i) a $17.5 million gain  from  the
sale of certain offshore assets, (ii) an $11.4 million gain  from
the  sale  of  Stingray Pipeline Company, L.L.C.,  (iii)  a  $2.2
million gain from the sale of preferred stock of Tom Brown,  Inc.
and  (iv) dividend income from preferred stock of Tom Brown, Inc.
prior to its sale.

<TABLE>
<CAPTION>
                                         Three Months Ended                  Nine Months Ended
                                            September 30,                      September 30,
 Income Taxes - Continuing        ---------------------------------  ---------------------------------
 -------------------------                                Increase                           Increase
   Operations                        2000       1999     (Decrease)     2000        1999    (Decrease)
   ----------                     ---------- ----------  ----------  ----------  ---------- ----------
                                                             (In Thousands)
<S>                              <C>        <C>         <C>         <C>         <C>        <C>
 Income Tax Provision             $  17,739  $   3,764   $  13,975   $  65,026   $  26,964  $  38,062
                                  =========  =========   =========   =========   =========  =========

 Effective Tax Rate                    40.0%      39.0%        1.0%       40.0%       39.0%       1.0%
                                  =========  =========   =========   =========   =========  =========

</TABLE>

<PAGE> 26

The  increase  of $14.0 million in the income tax provision  from
the  third  quarter  of  1999 to the third  quarter  of  2000  is
composed  of (i) an increase of $13.5 million due to an  increase
in  pretax income and (ii) an increase of $0.5 million due to  an
increase  in  the  effective tax rate in 2000.  The  increase  of
$38.1  million  in the income tax provision from the  first  nine
months  of  1999 to the first nine months of 2000 is composed  of
(i)  an  increase of $36.4 million due to an increase  in  pretax
income and (ii) an increase of $1.7 million due to an increase in
the  effective  tax  rate in 2000.  In each case,  the  increased
effective  tax rate is principally due to an increased  provision
for state income taxes.

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

During  the  third quarter of 1999, we adopted and implemented  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 our en*able  joint
venture  with PacifiCorp.  During the fourth quarter of 1999,  we
adopted and implemented plans to discontinue the following  lines
of  business: gathering and processing of natural gas,  providing
field  services to natural gas producers, commodity marketing  of
natural gas and natural gas liquids, international operations and
West  Texas  pipelines.  Our 1999 Form 10-K  contains  additional
information  on these matters.  Note 6 of the accompanying  Notes
to  Consolidated  Financial Statements contains  (i)  information
concerning  the  status of disposition efforts  with  respect  to
these assets, (ii) certain financial information with respect  to
discontinued  operations  and (iii) our remaining  investment  in
these businesses.

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

The  following  table  illustrates the sources  of  our  invested
capital.   The  balances  at December  31,  1998  and  thereafter
reflect  the  incremental capital associated with our acquisition
of  MidCon  Corp.,  including  our post-acquisition  refinancings
completed  in  1998.   The  balances at  December  31,  1999  and
September 30, 2000 also reflect the impacts associated  with  our
acquisition  of  Kinder Morgan Delaware and our sale  of  certain
assets  to Kinder Morgan Energy Partners.  Notes 2 and 5  of  the
accompanying Notes  to Consolidated Financial Statements  contain
additional information on these transactions.  Our capitalization
will  be  affected by, among other things, the  maturity  of  two
securities  in  2001, see "Net Cash Flows from Financing  Activi-
ties" following.

<PAGE> 27

<TABLE>
<CAPTION>
                                                                       December 31,
                              September 30,    ----------------------------------------------------------
                                  2000             1999             1998           1997           1996
                              -----------      -----------      -----------    -----------    -----------
<S>                          <C>              <C>              <C>            <C>            <C>
                                                         (Dollars in Thousands)
Long-term Debt                $3,560,547       $3,293,326       $3,300,025     $  553,816     $  423,676
Common Equity                  1,742,187        1,665,841        1,216,821        606,132        519,794
Preferred Stock                        -                -            7,000          7,000          7,000
Capital Trust Securities         275,000          275,000          275,000        100,000              -
                              ----------       ----------       ----------     ----------     ----------
  Capitalization               5,577,734        5,234,167        4,798,846      1,266,948        950,470
Short-Term Debt (2)                    -          581,567        1,702,013 (1)    359,951        156,271
                              ----------       ----------       ----------     ----------     ----------
  Invested Capital            $5,577,734       $5,815,734       $6,500,859     $1,626,899     $1,106,741
                              ==========       ==========       ==========     ==========     ==========

Capitalization:
---------------
  Long-term Debt                   63.8%            62.9%            68.8%          43.7%          44.6%
  Common Equity                    31.2%            31.8%            25.4%          47.8%          54.7%
  Preferred Stock                     -                -              0.1%           0.6%           0.7%
  Capital Trust Securities          5.0%             5.3%             5.7%           7.9%             -

Invested Capital:
-----------------
Total Debt                         63.8%            66.6%            76.9%          56.2%          52.4%
Equity, Including Capital
  Trust Securities                 36.2%            33.4%            23.1%          43.8%          47.6%

(1)  Includes   the   $1,394,846   Substitute   Note  assumed in
     conjunction  with  the acquisition of MidCon  Corp.,  which
     note was repaid in January 1999.
(2)  At  September  30,  2000,  $269.4  million   of  short-term
     obligations have been reclassified to long-term debt due to
     our  intent  and ability to refinance them on  a  long-term
     basis  (see  Note  10 of the accompanying Notes to Consoli-
     dated Financial Statements).

</TABLE>

As discussed in Note 5 to the accompanying consolidated financial
statements,  in April 2000, Kinder Morgan Energy Partners  issued
4.5  million limited partnership units in a public offering.   We
did  not  acquire  any  of  these  units  and,  accordingly,  our
percentage ownership of Kinder Morgan Energy Partners was reduced
by  approximately  1.3 percent.  In accordance  with  the  policy
described  in  Note 3 of the accompanying Notes  to  Consolidated
Financial  Statements, various balance sheet accounts,  including
paid-in-capital,  were also affected.  Kinder Morgan Energy Part-
ners  has  adopted  an aggressive acquisition  strategy and it is
expected that future acquisitions will be  financed,  in part, by
issuance of  additional limited partnership units.  Therefore, it
is  expected that future similar transactions will occur.  Never-
theless, because (i) it is Kinder Morgan Energy Partners'  policy
that such acquisitions be accretive to cash flow per common unit,
(ii) the general partner interest  is  not diluted by such trans-
actions and (iii) for a given  level  of  cash  distribution, the
incentive  distribution structure  results  in  relatively larger
distributions to the general partner  as  the  number of  limited
partnership  units outstanding  increases,  it is not anticipated
that  additional  transactions  will collectively have an adverse
effect on cash flows or earnings from this investment.

CASH FLOWS
----------

The  following  discussion  of  cash  flows  should  be  read  in
conjunction  with the Statements of Consolidated Cash  Flows  and
related  supplemental information included in our 1999 Form  10-K
and  the  accompanying  Consolidated Statements  of  Cash  Flows,
including the related supplemental disclosures.

Net Cash Flows from Operating Activities
----------------------------------------

"Net  Cash Flows Provided by Operating Activities" decreased from
$123.5  million for the nine months ended September 30,  1999  to
$96.5  million for the nine months ended September  30,  2000,  a
decline of $27.0 million (21.9%).  This decline is primarily  due
to  an  increase in cash flows used for discontinued  operations,
which increased from a source of $138.3 million in the first nine
months  of  1999  to a use of $102.4 million in  the  first

<PAGE> 28

nine  months of 2000, a $240.7 million increased use of cash  re-
flecting (i)  $124.9 million of cash outflow in 2000 attributable
to  the termination of our receivable sale program and (ii) 124.9
million of cash inflow  in  1999 attributable to  the  receivable
sale program  (see  "Net Cash  Flows  from  Financing Activities"
following).  The decline in "Net Cash Flows Provided by Operating
Activities" for discontinued operations was partially  offset  by
an  increase  in  cash  flows provided by continuing  operations,
which  increased from a use of $14.7 million for the nine  months
ended  September 30, 1999 to a source of $198.9 million  for  the
nine  months  ended September 30, 2000.  This $213.6  million  of
increased cash flow is primarily due to (i) $84.3 million of cash
distributions  received  in  the  first  nine  months   of   2000
attributable  to  our interest in Kinder Morgan  Energy  Partners
(see  Note  2 of the accompanying Notes to Consolidated Financial
Statements and the discussion following), (ii) a decrease in cash
used  for working capital of $104.8 million during the first nine
months  of  2000 and (iii) a decrease in cash used in  the  first
nine  months  of  2000 to make interest payments  reflecting  the
decreased average debt balance outstanding.  Partially offsetting
this increase were January 2000 payments associated with December
1999 gas supply purchases.

In  general, distributions from Kinder Morgan Energy Partners are
declared  in the month following the end of the quarter to  which
they  apply  and  are paid in the month following  the  month  of
declaration to the general partner and unit holders of record  as
of the end of the declaration month.  Therefore, the accompanying
Statement  of  Consolidated Cash Flows for the nine months  ended
September  30,  2000 reflects the receipt of  a  total  of  $84.3
million  of cash distributions from Kinder Morgan Energy Partners
for  the fourth quarter of 1999 and the first six months of 2000.
The cash distributions attributable to our interest for the three
months  and  nine  months ended September 30,  2000  total  $37.0
million  and  $105.4  million,  respectively.   The  increase  in
distributions  during  2000 reflects, among  other  factors,  the
December  31,  1999  transfer of certain properties  from  us  to
Kinder  Morgan  Energy Partners (see Note 5 of  the  accompanying
Notes to Consolidated Financial Statements).

Net Cash Flows from Investing Activities
----------------------------------------

"Net  Cash Flows Provided by Investing Activities" decreased from
$1.0  billion  for the nine months ended September  30,  1999  to
$347.5  million for the nine months ended September 30,  2000,  a
decline  of  $690.6  million  principally  due  to  the  sale  of
approximately  $1.1 billion of government securities  during  the
first  nine months of 1999, with the proceeds utilized  to  repay
the  Substitute Note assumed in conjunction with the January 1998
acquisition  of  MidCon  Corp. (see "Cash  Flows  From  Financing
Activities"  following  and  Note  2  of  Notes  to  Consolidated
Financial  Statements included in our 1999 Form 10-K).  Partially
offsetting  this decrease was (i) $330 million of  cash  received
during  2000 from the sale of certain interests to Kinder  Morgan
Energy  Partners  (see  Note  5  of  the  accompanying  Notes  to
Consolidated  Financial  Statements)  and  (ii)  cash  flows   of
discontinued investing activities increasing from a use of  $51.7
million  in the first nine months of 1999 to a source  of  $126.4
million in the first nine months of 2000, which was principally a
result of the $163.9 million of proceeds received from ONEOK  for
the  sale  of  gathering and processing businesses  in  Oklahoma,
Kansas  and West Texas (see Note 6 of the accompanying  Notes  to
Consolidated  Financial Statements).  We are in  the  process  of
monetizing  our remaining investment in discontinued  businesses,
see "Discontinued Operations" elsewhere herein.

Net Cash Flows from Financing Activities
----------------------------------------

"Net  Cash  Flows  Used in Financing Activities"  decreased  from
approximately  $1.2 billion for the nine months  ended  September
30,  1999  to $451.2 million for the nine months ended  September
30,  2000,  a  decline  of approximately  $711.8  million.   This
decrease  was principally due to the first-quarter 1999 repayment
of  the  $1.39  billion  Substitute Note as discussed  preceding,
partially offset by increased short-term borrowings

<PAGE> 29

during  the  same  period, as well  as  reduced cash payments for
dividends  in 2000.  Partially offsetting these effects were  in-
creased 2000 cash used for miscellaneous financing activities.

As  further  discussed  in Note 10 of the accompanying  Notes  to
Consolidated Financial Statements, our principal sources of short-
term  liquidity are our revolving bank facilities  totaling  $900
million.   At  September  30, 2000,  we  had  $261.2  million  of
commercial paper (which is backed by the bank facilities)  issued
and outstanding.  The corresponding amount outstanding was $256.5
million  at  October  25,  2000.  After inclusion  of  applicable
letters  of  credit,  the remaining available borrowing  capacity
under  the bank facilities was $670.5 million and $625.2  million
at  September  30,  2000 and October 25, 2000, respectively.   As
described in our 1999 Form 10-K, our bank facilities and  certain
of  our operating lease arrangements contain covenants related to
our ratio of debt to total capitalization, consolidated net worth
and  debt ratings.  For additional information on utilization  of
these  facilities,  see  Note 10 of  the  accompanying  Notes  to
Consolidated Financial Statements.

On  March 1, 2001, our $400 million of Reset Put Securities  will
either  (i) have their interest rate reset and remain outstanding
with a maturity date of March 1, 2021 as a result of the exercise
of  a call option by Morgan Stanley & Co. or (ii) be redeemed  by
us  as  a result of the automatic exercise of a mandatory put  by
First Trust National Association on behalf of the holders in  the
event that Morgan Stanley fails to exercise its call option.   If
we  redeem  the  Reset  Put Securities, the  required  funds  are
expected  to  be  provided principally by incremental  short-term
borrowing.   It  is  not currently possible  to  determine  which
outcome  will result because the principal economic  decision  is
dependent upon interest rates in effect at the time the  decision
must  be made.  These securities are included in "Long-term Debt"
in the accompanying Consolidated Balance Sheets.

In  November  1998,  we  sold $460 million  principal  amount  of
premium  equity  participating securities in a  public  offering.
These  securities  obligated the holders to  purchase  a  certain
amount  of our Common Stock based on the market price at the  end
of  a three-year period.  In November 2001, the maturity of these
securities  will  result in our receipt of $460 million  in  cash
and,  based on the current market price of our Common Stock,  the
issuance of approximately 13.4  million  shares of common  stock.
The  cash  proceeds are expected to be used to  retire  the  $400
million of 6.45%  Senior Notes which mature concurrently with the
premium equity participating securities and to repay a portion of
short-term borrowings then outstanding.

In  September  1999, we established an accounts receivable  sales
facility   that  provided  up  to  $150  million  of   additional
liquidity.   In  accordance  with  this  agreement,  we  received
proceeds  of  $150  million on September 30,  1999.   Cash  flows
associated with this facility are included with "Cash flows  from
Operating Activities" in the accompanying Consolidated Statements
of Cash Flows.  In February 2000, we reduced our participation in
this receivables sales program by $124.9 million, principally  as
a  result  of  our then-pending disposition of our wholesale  gas
marketing  business.  On April 25, 2000, we repaid  the  residual
balance and terminated the agreement.

Regulatory Matters
------------------

See  Note  11 of the accompanying Notes to Consolidated Financial
Statements  for  information regarding regulatory  matters.   The
reader  is  also  directed to Notes 8(A) and  8(B)  of  Notes  to
Consolidated  Financial  Statements of our  1999  Form  10-K  for
additional information on regulatory matters.

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

See  Note  16 of the accompanying Notes to Consolidated Financial
Statements  for  information regarding  environmental  and  legal
matters.  The reader is also directed to Notes 9(A) and  9(B)  of
Notes to Consolidated

<PAGE> 30

Financial Statements of our 1999 Form  10-K for additional infor-
mation on our pending litigation  and environmental  matters.  We
believe we have established adequate reserves such that the reso-
lution of pending  litigation  and environmental matters will not
have  a  material adverse impact  on our  business,  cash  flows,
financial position or results of operations.

Business Strategy
-----------------

The reader is directed to our 1999 Form 10-K for a discussion  of
business strategy.

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, 1999, in  the  "Risk  Management"
section  of  Management's Discussion and  Analysis  of  Financial
Condition  and  Results of Operations contained in our 1999  Form
10-K.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

The  reader is directed to Note 16 of the accompanying  Notes  to
Consolidated  Financial Statements in Part I, Item  1,  which  is
incorporated herein by reference.

Item 6.  Exhibits and Reports on Form 8-K

   (A)     Exhibits

   27.1  Financial Data Schedule*

   *Included in SEC copy only.

   (B)     Reports on Form 8-K

      (1)  Current  Report on Form 8-K dated November 6, 2000 was
           filed pursuant to Items 7 and 9 of that form.

Pursuant  to  Item 9 of that form, in Item 7 we filed  an exhibit
containing  presentation  materials for use  at  a  meeting  with
analysts and others on November 6, 2000.

<PAGE> 31

                            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 13, 2000                /s/ C. Park Shaper
                               ----------------------------------
                               C. Park Shaper
                               Vice President and Chief Financial Officer
                               (Principal Financial and Accounting Officer)

<PAGE> 32

                          EXHIBIT INDEX

 27.1   Financial Data Schedule*

 *Included in SEC copy only.