KINDER MORGAN ENERGY PARTNERS, L.P.
                           EXECUTIVE COMPENSATION PLAN

                          SETTLEMENT AND TERMINATION OF
                              AMENDED AND RESTATED
                     INCENTIVE COMPENSATION GRANT AGREEMENT


      This Settlement and Termination  ("Settlement  and  Termination")  of that
certain  Amended  and  Restated  Incentive  Compensation  Grant  Agreement  (the
"Restated Grant Agreement") is made as of April 20, 2000,  between KINDER MORGAN
ENERGY PARTNERS, L.P. (the "Partnership") and DAVID G. DEHAEMERS, JR.
(the "Participant").

      WHEREAS,  as of July 1, 1997, an Incentive  Compensation  Grant  Agreement
(the  "Original  Agreement")  was  entered  into  between  the  Partnership  and
Participant  pursuant to which the Partnership made a grant to Participant as of
February  14,  1997 of  Incentive  Compensation  pursuant  to the  Partnership's
Executive  Compensation  Plan (the  "Plan"),  all as  specified  in the Original
Agreement;

      WHEREAS,  as of January 4, 1999, the Partnership and Participant  entered
into the Restated Grant Agreement;

      NOW,  THEREFORE,  in order to carry out the purposes of the Kinder  Morgan
Energy Partners,  L.P. Executive  Compensation Plan, a copy of which is attached
hereto as Exhibit A and the provisions of which are incorporated by reference as
though fully stated herein,  and in consideration  of the mutual  agreements and
other matters set forth herein and in the Plan, the  Partnership and Participant
hereby agree as follows:

Section 1.  Recitals.  The terms of the  foregoing  Recitals  are  incorporated
herein and made a part of this Settlement and Termination.

Section 2.  Settlement of Incentive  Compensation.  Contemporaneously  herewith,
Participant,  Kinder  Morgan,  Inc.  and Kinder  Morgan G.P.,  Inc.  executed an
employment  agreement  which  provides for  compensation  in  settlement  of the
Partnership's  obligations  under  the  Plan,  the  Original  Agreement  and the
Restated  Grant  Agreement.  This  Settlement  and  Termination  supercedes  and
terminates  the Restated  Grant  Agreement  and the Original  Agreement in their
entirety,  and the Restated Grant Agreement and the Original Agreement are of no
further  force or  effect.  Participant  does not  have any  remaining  grant of
Incentive Compensation or other rights under the Plan.

Section 3. Binding Effect.  This  Settlement and  Termination  shall be binding
upon and inure to the  benefit of any  successors  to the  Partnership  and all
persons lawfully claiming under Participant.


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Section  4.  Capitalized   Terms.   Capitalized   terms  used  herein  but  not
otherwise defined herein shall have the meanings ascribed to them in the Plan.

      IN WITNESS  WHEREOF,  the  Partnership  has  caused  this  Settlement  and
Termination  to  be  duly  executed  by  one  of  its  officers  thereunto  duly
authorized, and Participant has executed this Settlement and Termination, all as
of the day and year first above written.


                               KINDER MORGAN ENERGY PARTNERS, L.P.

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

                               By:      /s/ Joseph Listengart
                                        ----------------------------------
                               Title:   Vice President



                                       /s/ David G. Dehaemers, Jr.
                                       -----------------------------------
                                       David G. Dehaemers, Jr.