Nicor Gas Company
                                                             Form 10-K
                                                             Exhibit 4.19




 
                             SUPPLEMENTAL INDENTURE
                            ------------------------
                             DATED FEBRUARY 1, 1999
 
                            ------------------------
 
                         NORTHERN ILLINOIS GAS COMPANY
 
                                       TO
                         HARRIS TRUST AND SAVINGS BANK
                      TRUSTEE UNDER INDENTURE DATED AS OF
                        JANUARY 1, 1954 AND SUPPLEMENTAL
                               INDENTURES THERETO
 
                            ------------------------
 
                              FIRST MORTGAGE BONDS
                       5.37% SERIES DUE FEBRUARY 1, 2009
 
This instrument was prepared by David L. Cyranoski, 1844 Ferry Road, Naperville,
Illinois 60563-9600.



<PAGE>
 
THIS SUPPLEMENTAL INDENTURE, dated the first day of February, 1999, between
     NORTHERN ILLINOIS GAS COMPANY, a corporation organized and existing under
     the laws of the State of Illinois (hereinafter called the "Company"), and
     HARRIS TRUST AND SAVINGS BANK, an Illinois banking corporation,
     (hereinafter called the "Trustee"), as successor Trustee under an Indenture
     dated as of January 1, 1954, as supplemented by Supplemental Indentures
     dated, respectively, February 9, 1954, April 1, 1956, June 1, 1959, July 1,
     1960, June 1, 1963, July 1, 1963, August 1, 1964, August 1, 1965, May 1,
     1966, August 1, 1966, July 1, 1967, June 1, 1968, December 1, 1969, August
     1, 1970, June 1, 1971, July 1, 1972, July 1, 1973, April 1, 1975, April 30,
     1976, April 30, 1976, July 1, 1976, August 1, 1976, December 1, 1977,
     January 15, 1979, December 1, 1981, March 1, 1983, October 1, 1984,
     December 1, 1986, March 15, 1988, July 1, 1988, July 1, 1989, July 15,
     1990, August 15, 1991, July 15, 1992, February 1, 1993, March 15, 1993, May
     1, 1993, July 1, 1993, August 15, 1994, October 15, 1995, May 10, 1996,
     August 1, 1996, June 1, 1997, October 15, 1997, February 15, 1998, and June
     1, 1998 such Indenture dated as of January 1, 1954, as so supplemented,
     being hereinafter called the "Indenture."
 
WITNESSETH:
 
     WHEREAS, the Indenture provides for the issuance from time to time
thereunder, in series, of bonds of the Company for the purposes and subject to
the limitations therein specified; and
 
     WHEREAS, the Company desires, by this Supplemental Indenture, to create an
additional series of bonds to be issuable under the Indenture, such bonds to be
designated "First Mortgage Bonds, 5.37% Series due February 1, 2009"
(hereinafter called the "bonds of this Series"), and the terms and provisions to
be contained in the bonds of this Series or to be otherwise applicable thereto
to be as set forth in this Supplemental Indenture; and
 
     WHEREAS, the forms, respectively, of the bonds of this Series, and
Trustee's certificate to be endorsed on all bonds of this Series, are to be
substantially as follows:
 
                             (FORM OF FACE OF BOND)
NO. RU _____                                                           $________
 
                         NORTHERN ILLINOIS GAS COMPANY
 
             FIRST MORTGAGE BOND, 5.37% SERIES DUE FEBRUARY 1, 2009
 
     NORTHERN ILLINOIS GAS COMPANY, an Illinois corporation (hereinafter called
the "Company"), for value received, hereby promises to pay to
                     or registered assigns, the sum of
              Dollars, on the first day of February, 2009, and to pay to the
registered owner hereof interest on said sum from the date hereof until said sum
shall be paid, at the rate of five and thirty-seven hundredths per centum
(5.37%) per annum, payable

                                        2
<PAGE> 
semiannually on the first day of February and the first day of August in each
year. Both the principal of and the interest on this bond shall be payable at
the office or agency of the Company in the City of Chicago, State of Illinois,
or, at the option of the registered owner, at the office or agency of the
Company in the Borough of Manhattan, The City and State of New York, in any coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts. Any installment of
interest on the bonds may, at the Company's option, be paid by mailing checks
for such interest payable to or upon the written order of the person entitled
thereto to the address of such person as it appears on the registration books.
 
     So long as there is no existing default in the payment of interest on this
bond, the interest so payable on any interest payment date will be paid to the
person in whose name this bond is registered on the January 15 or the July 15
(whether or not a business day), as the case may be, next preceding such
interest payment date. If and to the extent that the Company shall default in
the payment of interest due on such interest payment date, such defaulted
interest shall be paid to the person in whose name this bond is registered on
the record date fixed, in advance, by the Company for the payment of such
defaulted interest.
 
     Additional provisions of this bond are set forth on the reverse hereof.
 
     This bond shall not be entitled to any security or benefit under the
Indenture or be valid or become obligatory for any purpose unless and until it
shall have been authenticated by the execution by the Trustee, or its successor
in trust under the Indenture, of the certificate endorsed hereon.
 
     IN WITNESS WHEREOF, Northern Illinois Gas Company has caused this bond to
be executed in its name by its Chairman, President, or a Vice President,
manually or by facsimile signature, and has caused its corporate seal to be
impressed hereon or a facsimile thereof to be imprinted hereon and to be
attested by its Secretary or its Assistant Secretary, manually or by facsimile
signature.
 
Dated
---------------
                                           NORTHERN ILLINOIS GAS COMPANY
 
                                           By
 
                                           -------------------------------------
                                                         President
ATTEST:
 
-------------------------------------
              Secretary

                                        3
 
<PAGE>
               (FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION)
 
     This bond is one of the bonds of the series designated therein, referred to
and described in the within-mentioned Supplemental Indenture dated February 1,
1999.
 
HARRIS TRUST AND SAVINGS,
  TRUSTEE
 
By
 
    ---------------------------------
           Authorized Officer
 
                         (FORM OF REVERSE SIDE OF BOND)
 
     This bond is one, of the series hereinafter specified, of the bonds issued
and to be issued in series from time to time under and in accordance with and
secured by an Indenture dated as of January 1, 1954, to Harris Trust and Savings
Bank, as Trustee, as supplemented by certain indentures supplemental thereto,
executed and delivered to the Trustee; and this bond is one of a series of such
bonds, designated "Northern Illinois Gas Company First Mortgage Bonds, 5.37%
Series due February 1, 2009" (herein called "bonds of this Series"), the
issuance of which is provided for by a Supplemental Indenture dated February 1,
1999 (hereinafter called the "Supplemental Indenture"), executed and delivered
by the Company to the Trustee. The term "Indenture", as hereinafter used, means
said Indenture dated as of January 1, 1954, and all indentures supplemental
thereto from time to time in effect. Reference is made to the Indenture for a
description of the property mortgaged and pledged, the nature and extent of the
security, the rights of the holders and registered owners of said bonds, of the
Company and of the Trustee in respect of the security, and the terms and
conditions governing the issuance and security of said bonds.
 
     With the consent of the Company and to the extent permitted by and as
provided in the Indenture, modifications or alterations of the Indenture or of
any supplemental indenture and of the rights and obligations of the Company and
of the holders and registered owners of the bonds may be made, and compliance
with any provision of the Indenture or of any supplemental indenture may be
waived, by the affirmative vote of the holders and registered owners of not less
than sixty-six and two-thirds per centum (66 2/3%) in principal amount of the
bonds then outstanding under the Indenture, and by the affirmative vote of the
holders and registered owners of not less than sixty-six and two-thirds per
centum (66 2/3%) in principal amount of the bonds of any series then outstanding
under the Indenture and affected by such modification or alteration, in case one
or more but less than all of the series of bonds then outstanding under the
Indenture are so affected, but in any case excluding bonds disqualified from
voting by reason of the Company's interest therein as provided in the Indenture;
subject, however, to the condition, among other conditions stated in the
Indenture, that no such
<PAGE>
                                        4

<PAGE> 
modification or alteration shall be made which, among other things, will permit
the extension of the time or times of payment of the principal of or the
interest or the premium, if any, on this bond, or the reduction in the principal
amount hereof or in the rate of interest or the amount of any premium hereon, or
any other modification in the terms of payment of such principal, interest or
premium, which terms of payment are unconditional, or, otherwise than as
permitted by the Indenture, the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any of the mortgaged
property, all as more fully provided in the Indenture.
 
     The bonds of this Series may not be called for redemption by the Company.
 
     In case of certain completed defaults specified in the Indenture, the
principal of this bond may be declared or may become due and payable in the
manner and with the effect provided in the Indenture.
 
     No recourse shall be had for the payment of the principal of or the
interest or the premium, if any, on this bond, or for any claim based hereon, or
otherwise in respect hereof or of the Indenture, to or against any incorporator,
stockholder, officer or director, past, present or future, of the Company or of
any predecessor or successor corporation, either directly or through the Company
or such predecessor or successor corporation, under any constitution or statute
or rule of law, or by the enforcement of any assessment or penalty, or
otherwise, all such liability of incorporators, stockholders, directors and
officers being waived and released by the registered owner hereof by the
acceptance of this bond and being likewise waived and released by the terms of
the Indenture, all as more fully provided therein.
 
     This bond is transferable by the registered owner hereof, in person or by
duly authorized attorney, at the office or agency of the Company in the City of
Chicago, State of Illinois, or, at the option of the registered owner, at the
office or agency of the Company in the Borough of Manhattan, The City and State
of New York, upon surrender and cancellation of this bond; and thereupon a new
registered bond or bonds without coupons of the same aggregate principal amount
and series will, upon the payment of any transfer tax or taxes payable, be
issued to the transferee in exchange herefor. The Company shall not be required
to exchange or transfer this bond if this bond or a portion hereof has been
selected for redemption.
 
                               (END OF BOND FORM)
and
 
     WHEREAS, all acts and things necessary to make this Supplemental Indenture,
when duly executed and delivered, a valid, binding and legal instrument in
accordance with its terms and for the purposes herein expressed, have been done
and performed, and the execution and delivery of this Supplemental Indenture
have in all respects been duly authorized;
 
     NOW, THEREFORE, in consideration of the premises and of the sum of one
dollar paid by the Trustee to the Company, and for other good and valuable
considerations, the receipt of which is hereby acknowledged, for the purpose of
securing the due and

                                        5
 

<PAGE>
punctual payment of the principal of and the interest and premium, if any, on
all bonds which shall be issued under the Indenture, and for the purpose of
securing the faithful performance and observance of all the covenants and
conditions set forth in the Indenture and in all indentures supplemental
thereto, the Company by these presents does grant, bargain, sell, transfer,
assign, pledge, mortgage, warrant and convey unto Harris Trust and Savings Bank,
as Trustee, and its successor or successors in the trust hereby created, all
property, real and personal (other than property expressly excepted from the
lien and operation of the Indenture), which, at the actual date of execution and
delivery of this Supplemental Indenture, is solely used or held for use in the
operation by the Company of its gas utility system and in the conduct of its gas
utility business and all property, real and personal, used or useful in the gas
utility business (other than property expressly excepted from the lien and
operation of the Indenture) acquired by the Company after the actual date of
execution and delivery of this Supplemental Indenture or (subject to the
provisions of Section 16.03 of the Indenture) by any successor corporation after
such execution and delivery, and it is further agreed by and between the Company
and the Trustee as follows:
 
                                   ARTICLE I
 
                              BONDS OF THIS SERIES
 
     SECTION 1. The bonds of this Series shall, as hereinbefore recited, be
designated as the Company's "First Mortgage Bonds, 5.37% Series due February 1,
2009." The bonds of this Series which may be issued and outstanding shall not
exceed $50,000,000 in aggregate principal amount, exclusive of bonds of such
series authenticated and delivered pursuant to the provisions of Section 4.12 of
the Indenture.
 
     SECTION 2. The bonds of this Series shall be registered bonds without
coupons, and the form of such bonds, and of the Trustee's certificate of
authentication to be endorsed on all bonds of this Series, shall be
substantially as hereinbefore recited, respectively.
 
     SECTION 3. The bonds of this Series shall be issued in the denomination of
$1,000 each and in such multiple or multiples thereof as shall be determined and
authorized by the Board of Directors of the Company or by any officer or
officers of the Company authorized by the Board of Directors to make such
determination, the authorization of the denomination of any bond to be
conclusively evidenced by the execution thereof on behalf of the Company. The
bonds of this Series shall be numbered, RU-1 and consecutively upwards, or in
such other appropriate manner as shall be determined and authorized by the Board
of Directors of the Company.
 
     All bonds of this Series shall be dated February 1, 1999, except that each
bond issued on or after the first payment of interest thereon shall be dated as
of the date of the interest payment date thereof to which interest shall have
been paid on the bonds of such series next preceding the date of issue, unless
issued on an interest payment date to which interest shall have been so paid, in
which event such bonds shall be dated as of the date of issue; provided,
however, that bonds issued on or after January 15 and


                                        6
 

<PAGE>
before the next succeeding February 1 or on or after July 15 and before the next
succeeding August 1 shall be dated the next succeeding interest payment date if
interest shall have been paid to such date. All bonds of this Series shall
mature February 1, 2009 and shall bear interest at the rate of 5.37% per annum
until the principal thereof shall be paid. Such interest shall be calculated on
the basis of a 360-day year consisting of twelve 30-day months and shall be
payable semiannually on the first day of February and the first day of August in
each year. So long as there is no existing default in the payment of interest on
the bonds of this Series, such interest shall be payable to the person in whose
name each such bond is registered on the January 15 or the July 15 (whether or
not a business day), as the case may be, next preceding the respective interest
payment dates; provided, however, if and to the extent that the Company shall
default in the payment of interest due on such interest payment date, such
defaulted interest shall be paid to the person in whose name each such bond is
registered on the record date fixed, in advance, by the Company for the payment
of such defaulted interest.
 
     The principal of and interest and premium, if any, on the bonds of this
Series shall be payable in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and
private debts, and shall be payable at the office or agency of the Company in
the City of Chicago, State of Illinois, or, at the option of the registered
owner, at the office or agency of the Company in the Borough of Manhattan, The
City and State of New York. Any installment of interest on the bonds may, at the
Company's option, be paid by mailing checks for such interest payable to or upon
the written order of the person entitled thereto to the address of such person
as it appears on the registration books. The bonds of this Series shall be
registrable, transferable and exchangeable in the manner provided in Sections
4.08 and 4.09 of the Indenture, at either of such offices or agencies.
 
     SECTION 4. The bonds of this Series may not be called for redemption by the
Company.
 
     SECTION 5. No sinking fund is to be provided for the bonds of this Series.

                                        7
<PAGE> 
                                   ARTICLE II
 
                            MISCELLANEOUS PROVISIONS
 
     SECTION 1. This Supplemental Indenture is executed by the Company and the
Trustee pursuant to provisions of Section 4.02 of the Indenture and the terms
and conditions hereof shall be deemed to be a part of the terms and conditions
of the Indenture for any and all purposes. The Indenture, as heretofore
supplemented and as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed.
 
     SECTION 2. This Supplemental Indenture shall bind and, subject to the
provisions of Article XVI of the Indenture, inure to the benefit of the
respective successors and assigns of the parties hereto.
 
     SECTION 3. Although this Supplemental Indenture is dated February 1, 1999,
it shall be effective only from and after the actual time of its execution and
delivery by the Company and the Trustee on the date indicated by their
respective acknowledgments hereto annexed.
 
     SECTION 4. This Supplemental Indenture may be simultaneously executed in
any number of counterparts, and all such counterparts executed and delivered,
each as an original, shall constitute but one and the same instrument.
 
     IN WITNESS WHEREOF, Northern Illinois Gas Company has caused this
Supplemental Indenture to be executed in its name by its President, a Vice
President, or Treasurer, and its corporate seal to be hereunto affixed and
attested by its Secretary or its Assistant Secretary, and Harris Trust and
Savings Bank, as Trustee under the Indenture, has caused this Supplemental
Indenture to be executed in its name by one of its Vice Presidents, and its seal
to be hereunto affixed and attested by one of its Assistant Secretaries, all as
of the day and year first above written.
 
NORTHERN ILLINOIS GAS COMPANY
 
BY
-------------------------------------
           DAVID L. CYRANOSKI
    Senior Vice President, Secretary
             and Treasurer
                                           ATTEST:
 
                                                       ------------------
                                                       ALEXANDER C. ALLISON
                                                       Assistant Secretary
HARRIS TRUST AND SAVINGS BANK,
  as Trustee
 
BY
-------------------------------------
              J. BARTOLINI
             Vice President
                                           ATTEST:
 
                                                       -------------------------
                                                           D.G. DONOVAN
                                                       Assistant Secretary

                                        8
<PAGE> 
<TABLE>
<S>                      <C>     <C>
STATE OF ILLINOIS        H       SS:
COUNTY OF DUPAGE
</TABLE>
 
     I, Ann E. Fleming, a Notary Public in the State aforesaid, DO HEREBY
CERTIFY that David L. Cyranoski, Senior Vice President, Secretary and Treasurer
of Northern Illinois Gas Company, an Illinois corporation, one of the parties
described in and which executed the foregoing instrument, and Alexander C.
Allison, Assistant Secretary of said corporation, who are both personally known
to me to be the same persons whose names are subscribed to the foregoing
instrument as such Senior Vice President, Secretary and Treasurer and Assistant
Secretary, respectively, and who are both personally known to me to be Senior
Vice President, Secretary and Treasurer and the Assistant Secretary,
respectively, of said corporation, appeared before me this day in person and
severally acknowledged that they signed, sealed, executed and delivered said
instrument as their free and voluntary act as such Senior Vice President,
Secretary and Treasurer and Assistant Secretary, respectively, of said
corporation, and as the free and voluntary act of said corporation, for the uses
and purposes therein set forth.
 
     GIVEN under my hand and notarial seal this first day of February, 1999 A.D.
 


                                                       Notary Public
 
My Commission expires March 31, 2001

                                        9
<PAGE> 
<TABLE>
<S>                      <C>     <C>
STATE OF ILLINOIS        H       SS:
COUNTY OF COOK
</TABLE>
 
     I, Linda E. Garcia, a Notary Public in and for said County, in the State
aforesaid, DO HEREBY CERTIFY that J. Bartolini, Vice President of Harris Trust
and Savings Bank, an Illinois banking corporation, one of the parties described
in and which executed the foregoing instrument, and D.G. Donovan, an Assistant
Secretary of said banking association, who are both personally known to me to be
the same persons whose names are subscribed to the foregoing instrument as such
Vice President and Assistant Secretary, respectively, and who are both
personally known to me to be a Vice President and an Assistant Secretary,
respectively, of said banking association, appeared before me this day in person
and severally acknowledged that they signed, sealed, executed and delivered said
instrument as their free and voluntary act as such Vice President and Assistant
Secretary, respectively, of said banking association, and as the free and
voluntary act of said banking association, for the uses and purposes therein set
forth.
 
     GIVEN under my hand and notarial seal this first day of February, 1999 A.D.
 


                                                       Notary Public
 
My Commission expires September 23, 2002

                                       10
<PAGE> 
                                 RECORDING DATA
 
     This Supplemental Indenture was recorded on February 2 and February 3,
1999, in the office of the Recorder of Deeds in certain counties in the State of
Illinois, as follows:
 
<TABLE>
<CAPTION>
    COUNTY        BOOK    PAGE  DOCUMENT NO.
    ------        ----    ----  ------------
<S>              <C>      <C>   <C>
Adams
Boone
Bureau
Carroll
Champaign
Cook
DeKalb
DeWitt
DuPage
Ford
Grundy
Hancock
Henderson
Henry
Iroquois
Jo Daviess
Kane
Kankakee
Kendall
Lake
La Salle
Lee
Livingston
McHenry
McLean
Mercer
Ogle
Platt
Pike
Rock Island
Stephenson
Tazewell
Vermillon
Whiteside
Will
Winnebago
Woodford
</TABLE>