MDU RESOURCES GROUP, INC

              1992 KEY EMPLOYEE STOCK OPTION PLAN

                            (KESOP)

I.   Purpose

The  purpose  of the MDU Resources Group, Inc. 1992 Key  Employee
Stock  Option  Plan (the "Plan") is to motivate key employees  of
MDU  Resources  Group,  Inc. and its business  units  to  achieve
specified  long-term  performance goals of MDU  Resources  Group,
Inc. or its business units and to encourage ownership by them  of
the   Common  Stock  of  MDU  Resources  Group,  Inc.   The  Plan
accomplishes  these objectives through the grant  of  performance
accelerated  Stock Options and the opportunity to  earn  dividend
equivalents.

II.  Definitions

The   following  definitions  shall  be  used  for  purposes   of
administering the Plan:

     "Agreement" means a written agreement evidencing each  award
     of  Options, which shall contain such terms and be  in  such
     form as the Compensation Committee may determine.

     "Board" means the Board of Directors of the Company.

     "Cause" means the (1) continued failure by a Participant  to
     perform  his/her duties (except as a direct  result  of  the
     Participant's  Disability) after receiving  notification  by
     the  Chief Executive Officer of the Company or an individual
     designated by the Chief Executive Officer (or the  Board  of
     Directors  of the Company in the case of the Chief Executive
     Officer) identifying the manner in which the Participant has
     failed  to perform his/her duties, (2) engaging in  conduct,
     which,  in  the  opinion  of  a majority  of  the  Board  of
     Directors  of the Company or a business unit, is  materially
     injurious to the Company, or (3) conviction of any felony.

     "Change  of Control" means the earliest of the following  to
     occur:  (a) the public announcement by the Company or by any
     person  (which shall not include the Company, any subsidiary
     of  the Company, or any employee benefit plan of the Company
     or  of  any subsidiary of the Company) ("Person") that  such
     Person,  who  or  which, together with  all  Affiliates  and
     Associates  (within the meanings ascribed to such  terms  in
     the  Rule  12b-2 of the General Rules and Regulations  under
     the  Exchange  Act) of such Person, shall be the  beneficial
     owner of twenty percent (20%) or more of the voting stock of
     the  Company outstanding; (b) the commencement of, or  after
     the  first public announcement of any Person to commence,  a
     tender  or  exchange offer the consummation of  which  would
     result in any Person becoming the beneficial owner of voting
     stock  aggregating thirty percent (30%) or more of the  then
     outstanding   voting   stock  of  the   Company;   (c)   the
     announcement  of  any transaction relating  to  the  Company
     required  to  be  described pursuant to the requirements  of
     Item  6(e)  of  Schedule  14A of Regulation  14A  under  the
     Exchange Act; (d) a proposed change in constituency  of  the
     Board  such  that, during any period of two (2)  consecutive
     years,  individuals  who  at the beginning  of  such  period
     constitute  the Board cease for any reason to constitute  at
     least  a majority thereof, unless the election or nomination
     for  election by the stockholders of the Company of each new
     Director was approved by a vote of at least two-thirds (2/3)
     of  the  Directors then still in office who were members  of
     the  Board at the beginning of the period; or (e) any  other
     event   which  shall  be  deemed  by  a  majority   of   the
     Compensation Committee to constitute a "change in control."

     "Common  Stock" means the Common Stock, $1.00 par value,  of
     the Company.

     "Company" shall refer to MDU Resources Group, Inc.

     "Companies" shall refer to MDU Resources Group, Inc. and its
     business units.

     "Compensation  Committee"  or  "Committee"  shall   be   the
     Compensation  Committee of the Board  of  Directors  of  the
     Company  or  any  Committee of the Board performing  similar
     functions as appointed from time to time by the Board.

     "Covered  Employee"  means  any  Participant  who  would  be
     considered   a   "Covered   Employee"   for   purposes    of
     Section  162(m)  of the Internal Revenue Code  of  1986,  as
     amended.

     "Disability" means the inability of a Participant to perform
     each  and every duty pertaining to the Participant's regular
     occupation by reason of any medically determinable  physical
     or  mental  impairment which can be expected  to  result  in
     death  or which has lasted or can be expected to last for  a
     continuous period of not less than twelve months.

     "Dividend Account" is defined in Section IV.D 6.

     "Effective  Date"  means the date as of which  the  Plan  is
     approved by the stockholders of MDU Resources Group, Inc.

     "Eligible  Employee" means any key employee of  any  of  the
     Companies who, in the opinion of the Compensation Committee,
     has  significant  responsibility for the  continued  growth,
     development  and  financial success of the  Company  or  any
     business unit thereof.

     "Exchange" means the New York Stock Exchange.

     "Exchange Act" means the Securities Exchange Act of 1934, as
     amended.

     "Fair  Market Value" means the average of the high  and  low
     prices for shares of Common Stock traded on the Exchange  on
     the  date  of the grant of such Option or if no  shares  are
     traded  on  that  day, on the next preceding  day  on  which
     Common Stock was traded on the Exchange.

     "Goals"  means  the  performance goals  established  by  the
     Committee,  which  shall be based on  one  or  more  of  the
     following measures:  sales or revenues, earnings per  share,
     shareholder  return  and/or value,  funds  from  operations,
     operating  income,  gross income,  net  income,  cash  flow,
     return   on  equity,  return  on  capital,  earnings  before
     interest,   operating   ratios,   stock   price,    customer
     satisfaction,   accomplishment  of  mergers,   acquisitions,
     dispositions or similar extraordinary business transactions,
     profit  returns and margins, financial return ratios  and/or
     market  performance.   Performance  goals  may  be  measured
     solely on a corporate, subsidiary or business unit basis, or
     a   combination  thereof.   Performance  goals  may  reflect
     absolute  entity  performance or a  relative  comparison  of
     entity  performance to the performance of a  peer  group  of
     entities or other external measure.

     "Option"  or  "Stock  Option" means an  option  to  purchase
     Common Stock granted pursuant to the Plan.  Options may  not
     be  "incentive  stock options" as that term  is  defined  in
     Section  422  of  the  Internal Revenue  Code  of  1986,  as
     amended.

     "Participants"  means those Eligible Employees  selected  by
     the  Committee  for participation in the Plan  and  includes
     their beneficiaries as applicable.

     "Performance  Cycle" means a time frame established  by  the
     Committee pursuant to Section IV.D 4 for the measurement  of
     Goals.

     "Plan"  means  this  MDU  Resources  Group,  Inc.  1992  Key
     Employee Stock Option Plan, adopted by the Board on February
     13,  1992,  and approved by the stockholders  on  April  28,
     1992, and as amended from time to time.

     "Termination  of Service" means leaving the  employ  of  the
     Companies for any reason.  Transfer between Companies is not
     a Termination of Service.

     "Trustee"  means  a trustee chosen by the Committee  or  any
     successor trustee selected by the Committee.

III. Administration

Subject  to  and not inconsistent with the express provisions  of
the  Plan  the Committee has the sole and complete discretion  to
administer and interpret the Plan, including, but not limited to:

     (a)   designating  the  Participants  to  whom  Options  are
     granted under the Plan;

     (b)   authorizing the Trustee to grant Options,  determining
     the  time(s) when Options are granted and fixing the  number
     of  shares  of  Common Stock underlying each Option  granted
     hereunder;

     (c)   determining  the  terms and conditions  of  an  Option
     granted (including, but not limited to, the exercise  price,
     any  restriction  or  limitation,  the  vesting  provisions,
     acceleration  of vesting or forfeiture waiver applicable  to
     any Option) and the terms of the related Agreement;

     (d)   determining the conditions of the awarding of Dividend
     Equivalents;

     (e)   establishing Goals and fixing and adjusting the Goals;

     (f)   interpreting the terms and provisions of the Plan;

     (g)   adopting,   amending,  and   rescinding   rules   and
     regulations relating to the Plan; and

     (h)   making  all determinations necessary or advisable  for
     the administration of the Plan.

All decisions made by the Committee pursuant to the provisions of
the Plan shall be final and binding on all persons, including the
Companies, the Trustee, and the Plan's Participants.

The  Committee  may also revise or adjust the vesting  provisions
(except  that  the Committee may not extend vesting  beyond  nine
years), Goals and their levels applicable to a Performance Cycle,
at  any  time  to  take  into account, among  other  things,  new
Participants, promotions, transfers, terminations, changes in law
and  accounting and tax rules and to make such adjustments as the
Committee   deems  necessary  or  appropriate  to   reflect   the
Companies' performances or the impact of extraordinary or unusual
items, events, or circumstances or in order to avoid windfalls or
hardships.

The  Company and/or the Committee may consult with legal counsel,
who may be counsel for the Company or other counsel, with respect
to  its  obligations and duties hereunder or with respect to  any
claim, action, or proceeding or any other matter.

No  member  or agent of the Committee shall be personally  liable
for  any  action, determination, or interpretation made  in  good
faith with respect to the Plan or grants made hereunder, and  all
members  and agents of the Committee shall be fully protected  by
the  Company  in  respect of any such action,  determination,  or
interpretation.

The  Committee's determination under the Plan, including  without
limitation,  determinations  as to the  Participants  to  receive
grants,  the  terms  and  provisions  of  such  grants  and   the
Agreement(s) evidencing the same, need not be uniform and may  be
made  by  it selectively among the Eligible Employees who receive
or  are eligible to receive grants under the Plan, whether or not
such Eligible Employees are similarly situated.

IV.  General Plan Description

     A.   Overview
     The  Plan  provides  for  each Participant  to  (a)  receive
     grant(s) of Stock Options, (b) have the opportunity to  earn
     dividend  equivalents,  and  (c)  have  the  opportunity  to
     achieve  accelerated  vesting of Stock Options  and  receive
     additional   grants  of  Stock  Options   based   upon   the
     achievement  of  Goals established by the Committee  over  a
     designated Performance Cycle.

     B.   Eligibility
     On or after the Effective Date, subject to the provisions of
     the  Plan,  the Committee shall, from time to  time,  select
     from eligible employees Participants to whom options are  to
     be  granted.  At the time of selection, the Committee  shall
     specify the terms and conditions of the Participant's  grant
     of Options.

     C.   Authorization
     The  total  number  of shares of Common Stock  as  to  which
     Options may be granted may not exceed 800,000 shares; if any
     unexercised  options lapse or terminate for any reason,  the
     shares underlying the Options may be made subject to Options
     granted  to  other  Participants.   In  the  event  of   the
     declaration  of a Common Stock dividend and/or Common  Stock
     split,   reclassification  or  analogous   change   in   the
     capitalization or any distributions (other than regular cash
     dividends)  to  holders  of  record  of  Common  Stock,   an
     appropriate adjustment shall be made to the total number  of
     shares as to which Options may be granted under the Plan  to
     any Participant, to the number of shares subject to Options,
     and to the exercise price.

     Shares  of  Common Stock delivered under this  Plan  may  be
     authorized  but  unissued shares of Common  Stock,  treasury
     stock,  shares of Common Stock purchased on the open  market
     and  held by the Trustee, or shares of Common Stock from the
     1983 Key Employees' Stock Option Plan.

     D.   Individual Limitations
     Subject  to  adjustment as provided in  Section  IV(C),  the
     total number of shares of Common Stock with respect to which
     Options  may be granted in any calendar year to any  Covered
     Employee  shall not exceed 150,000 shares, and the aggregate
     number  of dividend equivalents that a Covered Employee  may
     receive in any calendar year shall not exceed $1,500,000.

     E.   Stock Options and Dividend Equivalents

          (1)  Grants
          Each Participant shall receive a grant of Options
          on  the  date  she  or he becomes a  Participant.   The
          Committee shall determine the size of the grant to each
          Participant.    Participants  may  receive   subsequent
          grants   of  Options  when  and  as  directed  by   the
          Committee.

          (2)  Exercise Price and Term
          The exercise price for an Option granted under the
          Plan  is the Fair Market Value of the Company's  Common
          Stock  on  the  date of the Option  grant.   An  Option
          granted  shall  generally have  a  term  of  ten  years
          commencing  from  the  date of grant,  subject  to  the
          provisions of Sections V and VI and to the general
          discretion of the Committee set forth in Section III.

          (3)  Vesting and Accelerated Vesting Provisions
          No  Option may be exercised before it has vested.
          Generally  Option grants have a vesting period  (before
          accelerated  vesting)  of nine  years  subject  to  the
          provisions  of Section VI and to the general discretion
          of the Committee set forth in Section III.  The vesting
          period  for  all or a portion of Options granted  to  a
          Participant may be accelerated by the Committee subject
          to the achievement of Goals for a Performance Cycle.

          (4)  Performance Cycle and Goals
          The  Committee shall fix the starting and  ending
          dates  of  each  Performance Cycle.  The  minimum  term
          shall  be  six months; the maximum term shall  be  nine
          years.   A  Performance Cycle will be the  time  period
          used  in  assessing  the performance  of  each  of  the
          Companies   in   comparison  to  the   separate   Goals
          established by the Committee for each of the Companies.
          Performance Cycles and Goals may vary for each  of  the
          Companies.

          (5)  Subsequent Grants; Accelerated Vesting
          Additional  grants  of Options  may  be  made  to
          Participants at any time.

          In  particular,  but not by  way  of  limitation,
          additional   grants  of  Options   may   be   made   to
          Participants  at  the beginning of  a  new  Performance
          Cycle based upon the appropriate Companies' achievement
          of  Goals and the results of accelerated vesting of all
          or  a  portion of previous grants.  The Committee  will
          have the  authority to determine the size and terms  of
          any new Option grant for each Participant.

          (6)  Dividend Equivalents
          At  the  beginning of each Performance  Cycle,  a
          Dividend  Account  (the "Dividend  Account")  shall  be
          established  for each Participant.  If  a  dividend  is
          declared  by  the  Board on the  Common  Stock  of  the
          Company  an equivalent amount shall be accrued  in  the
          Dividend Account of each Participant for each share  of
          Common  Stock underlying all unvested Options  held  by
          the  Participant.  At the end of each Performance Cycle
          the  Committee  in  its sole discretion  may  award  an
          amount  between 0% and 150% of a Participant's Dividend
          Account based on whether the Goals established for that
          Performance Cycle were achieved.  Any earned portion of
          a  Participant's Dividend Account is paid  in  cash  to
          that  Participant at the end of each Performance  Cycle
          at  a  date and time determined by the Committee.   Any
          portion of a Participant's Dividend Account not awarded
          to  the  Participant  by  the Committee  is  forfeited.
          However,  shares  of  Common Stock underlying  unvested
          Options  retain a dividend equivalent and a Participant
          can  earn  the  value of these dividend equivalents  in
          subsequent Performance Cycles.

          (7)  Exercise of Options
          As  provided  in paragraph (3) of  this  section,
          generally  all  Options granted to a Participant  under
          the  Plan  shall vest on the ninth anniversary  of  the
          date  of grant; provided, however, that if and  to  the
          extent  the vesting of an Option is accelerated at  the
          end  of  a Performance Cycle, the Option may thereafter
          be  exercised to the extent that the Option has vested.
          Any vested Option may be exercised from time to time in
          part   or  as  a  whole,  at  the  discretion  of   the
          Participant, from the date of vesting until termination
          of the Option; no Option shall be exercisable after its
          expiration  date;  subject  in  either  case   to   the
          provisions  set forth in Section V and to  the  general
          discretion of the Committee set forth in Section III.

          Options may be exercised by giving written notice
          of  exercise as directed by the Company specifying  the
          number of shares to be purchased.  The notice shall  be
          accompanied  by provision for payment of  the  exercise
          price.  Payment may be made in part or in full in  cash
          or by tendering shares of Common Stock already owned by
          the  Participant, based upon the Fair Market  Value  of
          the  Common  Stock on the date the Option is exercised,
          or  through share withholding.  Participants  may  also
          simultaneously exercise Options and sell the shares  of
          Common Stock thereby acquired and use the proceeds from
          the  sale  as  payment for the purchase  price  of  the
          shares.

          (8)  Nonassignability of Options
          Options granted may not be assigned, transferred,
          or pledged by the Participant other than by will or the
          laws  of  descent  and distribution or  pursuant  to  a
          domestic relations order.

V.   Termination of Service

     A.   Upon any Termination of Service, unvested Options  and
     any  amounts  accrued  in a Participant's  Dividend  Account
     shall  be  forfeited unless the Committee decides  otherwise
     pursuant to Section III.

     B.   Death
     If  the  Participant  dies while still  employed,  then  any
     vested   Options,  to  the  extent  that   they   are   then
     exercisable, may be fully exercised at any time  within  one
     (1)  year  (even  if this extends the term of  the  Options)
     after  the  date of the Participant's death  by  the  person
     designated  in the Participant's last will and testament  or
     by the personal representative of the Participant's estate.

     C.   Disability
     If  the  Participant  suffers Disability,  then  any  vested
     Options,  to the extent that they are then exercisable,  may
     be  fully exercised at any time within one (1) year (even if
     this  extends the terms of the Options) after  the  date  of
     Disability  by the Participant or by a person  qualified  or
     authorized to act on behalf of the Participant.

     D.   Cause
     If  a Participant's Termination of Service is for Cause, the
     right  to  exercise any vested Option shall  terminate  with
     such  termination  of  employment.  For  this  purpose,  the
     determination of the Committee as to whether employment  was
     terminated for Cause shall be final.

     E.   Other Termination of Service
     In the event of the Participant's Termination of Service for
     reasons  other  than Death, Disability,  or  Cause,  to  the
     extent  that  any  vested Options are then exercisable,  the
     Participant  shall be entitled to exercise the  Options  for
     the  three  (3)  month period following such Termination  of
     Service (even if this extends the term of the Options).

VI.  Change of Control

Upon  a  Change of Control of the Company, all Options previously
granted  under  the  Plan  shall become  immediately  vested  and
available for exercise.  The value of the amounts accrued in  the
Participant's Dividend Account shall be paid in full at  100%  of
the amount thereof to the Participant in cash upon the Change  of
Control.

VII. Miscellaneous Provisions

     A.   Unsecured General Creditor
     Participants    and    their   beneficiaries,    heirs,
     successors,  and  assigns  shall  have  no   legal   or
     equitable  rights, interests, or other  claims  in  any
     property  or assets of the Company, nor shall  they  be
     beneficiaries  of,  or  have  any  rights,  claims,  or
     interests in any specified assets of the Company.   Any
     and  all  of  the Company's assets shall be and  remain
     general, unpledged, unrestricted assets of the Company.
     The  Company's obligation under the Plan shall be  that
     of an unfunded and unsecured promise of the Company to
     cause shares of Common Stock to be available or to pay
     benefits in the future.

     B.   No Contract of Employment
     Nothing   contained  in  this  Plan  nor  any   related
     Agreement nor any action taken in the administration of
     the Plan shall be construed as a contract of employment
     or  as giving a Participant any right to be retained in
     the service of the Company.

     C.   Withholding Taxes
     No  later than the date on which a Participant receives
     Common  Stock  with respect to any Option exercised  or
     cash with respect to Dividend Equivalents awarded under
     the  Plan,  the Participant shall pay in  cash  to  the
     Company   or   its   delegate  or   make   arrangements
     satisfactory  to the Company regarding the  payment  of
     any  federal, state, or local taxes required by law  to
     be  withheld  with  respect to any such  amounts.   The
     Participant  may  also make payment  (i)  by  tendering
     shares  of  the  Common  Stock  already  owned  by  the
     Participant,  based  on the fair market  value  of  the
     Common  Stock on the date the tax is owed  or  (ii)  by
     having  such  amounts withheld from the shares  of  the
     Common  Stock  otherwise distributable to him/her  upon
     exercise  of his/her Options.  The obligations  of  the
     Company  under  the Plan shall be conditioned  on  such
     payment  or arrangements.  The Company or its  delegate
     may deduct any taxes from any payment due to the
     Participant from the Company to the extent allowed by
     law.

     D.   Ten Percent Limitation
     No  Option  shall  be  granted under  this  Plan  to  a
     Participant  if at the time the Option is  granted  the
     Participant shall own stock representing more than  10%
     of  the  combined voting power of all classes of voting
     stock of the Company.

     E.   Severability
     In  the  event that any provision of the  Plan  or  any
     related   Agreement   is   held   invalid,   void    or
     unenforceable,  the  same  shall  not  affect,  in  any
     respect whatsoever, the validity of any other provision
     of the Plan or any related Agreement.

     F.   Inurement of Rights and Obligations
     The  rights and obligations under the Plan shall  inure
     to  the  benefit  of,  and shall be  binding  upon  the
     Company,   its   successors  and   assigns,   and   the
     Participants  and their beneficiaries  consistent  with
     the terms of the Plan.

     G.   Amendments
     The  Board may at any time amend, suspend, or terminate
     the  Plan  including, without limitation, modifications
     to  take  into account and comply with any  changes  in
     applicable  securities or federal income tax  laws  and
     regulations,  or other applicable laws and regulations;
     provided,  that  no  modification  to  the  Plan  shall
     increase the number of shares available under the  Plan
     by more than 10 percent without approval of the holders
     of  the  Common  Stock, except as  otherwise  permitted
     under Section IV.C; and provided further, that any such
     amendment,   suspension,   or   termination   must   be
     prospective in that it may not deprive Participants  of
     any Options or rights previously granted under the Plan
     whether   vested  or  not,  without  consent   of   the
     Participant, except if required by statute or rules  or
     regulations promulgated thereunder.

     H.   Restrictions
     Shares   of   Common  Stock  acquired  by  Participants
     pursuant  to the exercise of Options granted under  the
     Plan   shall   be  subject  to  such  restrictions   on
     transferability  and disposition  as  are  required  by
     federal  and  state security laws and such Participants
     shall  not sell or transfer any shares acquired  except
     in accordance with such laws.

     I.   Legal and Other Requirements
     The obligation of the Company to cause Common Stock  to
     be  available  under the Plan shall be subject  to  all
     applicable  laws,  regulations,  rules  and  approvals,
     including,  but  not  limited to  the  receipt  of  any
     necessary  approvals  by state  or  federal  regulatory
     bodies,   and   the  effectiveness  of  a  registration
     statement  under the Securities Act of 1933  if  deemed
     necessary  or appropriate by the Company.  Certificates
     for  shares  of  Common Stock issued hereunder  may  be
     legended as the Committee shall deem appropriate.

     J.   Agreements
     Each  grant  of  Options  shall  be  evidenced  by   an
     Agreement which shall contain such restrictions,  terms
     and   conditions   as   the  Committee   may   require.
     Notwithstanding anything to the contrary  contained  in
     the Plan, the Company shall not be under any obligation
     to  honor  any grants under the Plan to any Participant
     hereunder  unless  such Participant shall  execute  all
     appropriate Agreements with respect to such Options  in
     such  form as the Committee may determine from time  to
     time.

     K.   Applicable Law
     The  Plan  and any related Agreements shall be governed
     in  accordance  with  the laws of the  State  of  North
     Dakota.

VIII. Establishment of Trust

The Company may establish with the Trustee a trust consisting  of
such sums of money or other property acceptable to the Trustee as
shall from time to time be paid or delivered to the Trustee,  all
investments made therewith and proceeds thereof and all  earnings
and  profits  thereon.  The Trustee shall invest funds,  if  any,
advanced  by  the  Company in shares of Common Stock.   Upon  the
exercise  of an Option by a Participant, the Trustee  shall  take
Common Stock from the trust or shall purchase Common Stock on the
open market or from the Company and deliver certificates for such
shares to the Participant.

The  Company  shall have the right at any time to  terminate  the
trust  but  such termination shall not affect the rights  of  any
Participant  to whom an Option has been granted under  the  Plan.
After  effecting all purchases and transfers of Common  Stock  as
are  required by the Plan pursuant to the exercise of Options  by
Participants,  the  Trustee  shall be  relieved  of  all  further
liability.  Termination of the trust shall take effect as of the
date  the last such transfer is made.  Upon such termination  any
assets  remaining in the trust shall be returned to  the  Company
unless other directions are given to the Trustee by the Company.