<PAGE>




                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

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

For the quarterly period ended SEPTEMBER 30, 2000

                        Commission File Number: 000-26091
                                TC PIPELINES, LP
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                   52-2135448
-------------------------------        ---------------------------------------
(State or other jurisdiction of        (I.R.S. Employer Identification Number)
 incorporation or organization)

 110 TURNPIKE ROAD, SUITE 203
   WESTBOROUGH, MASSACHUSETTS                         01581
 ----------------------------                      ----------
     (Address of principal                         (Zip code)
       executive offices)

                                  508-871-7046
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

     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 [ ]

     As of September 30, 2000 there were 14,690,694 of the registrant's common
units outstanding.


<PAGE>


                                TC PIPELINES, LP

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                             PAGE NO.
                                                                                             --------
<S>                                                                                          <C>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  Financial Statements

              Statement of Income - Three and nine months ended September 30, 2000,
                  three months ended September 30, 1999 and period May 28 to
                  September 30, 1999                                                             3
              Balance Sheet - September 30, 2000 and December 31, 1999                           4
              Statement of Cash Flows - Nine months ended September 30, 2000 and period
                  May 28 to September 30, 1999                                                   5
              Notes to Condensed Financial Statements                                            6

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

              Results of Operations of TC PipeLines, LP                                         10
              Liquidity and Capital Resources of TC PipeLines, LP                               12
              Results of Operations of Northern Border Pipeline Company                         15
              Liquidity and Capital Resources of Northern Border Pipeline Company               17

     ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk                        20

PART II.  OTHER INFORMATION

     ITEM 6.  Exhibits and Reports on Form 8-K                                                  21
</TABLE>


                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                                TC PIPELINES, LP

                               STATEMENT OF INCOME
<TABLE>
<CAPTION>

(UNAUDITED)                                           THREE MONTHS ENDED SEPTEMBER 30,
                                                     ---------------------------------     NINE MONTHS ENDED        May 28 (1) -
(THOUSANDS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)               2000               1999     SEPTEMBER 30, 2000   September 30,1999
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                      <C>         <C>                  <C>
EQUITY INCOME FROM INVESTMENT IN NORTHERN
   BORDER PIPELINE COMPANY                                 10,288              8,738               27,735              11,868
EQUITY INCOME FROM INVESTMENT IN TUSCARORA GAS
   TRANSMISSION COMPANY                                       226                  -                  226                   -
GENERAL AND ADMINISTRATIVE EXPENSES                          (448)              (239)              (1,018)               (383)
FINANCIAL CHARGES AND OTHER                                   (86)                 -                  (86)                  -
                                                     --------------------------------------------------------------------------
NET INCOME                                                  9,980              8,499               26,857              11,485
                                                     --------------------------------------------------------------------------
                                                     --------------------------------------------------------------------------

NET INCOME ALLOCATION
Common units                                                8,211              6,992               22,095               9,448
Subordinated units                                          1,570              1,337                4,225               1,807
General partner                                               199                170                  537                 230
                                                     --------------------------------------------------------------------------
                                                            9,980              8,499               26,857              11,485
                                                     --------------------------------------------------------------------------
                                                     --------------------------------------------------------------------------

NET INCOME PER UNIT                                         $0.56              $0.48                $1.50               $0.64
                                                     --------------------------------------------------------------------------
                                                     --------------------------------------------------------------------------

UNITS OUTSTANDING (THOUSANDS)                              17,500             17,500               17,500              17,500
                                                     --------------------------------------------------------------------------
                                                     --------------------------------------------------------------------------
</TABLE>

(1)      Commencement of operations

See accompanying Notes to Condensed Financial Statements.


                                       3
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

                                  BALANCE SHEET
<TABLE>
<CAPTION>

                                                                        SEPTEMBER 30, 2000    December 31, 1999
(THOUSANDS OF DOLLARS)                                                         (unaudited)
---------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                   <C>
ASSETS
Current Assets
   Cash                                                                              2,921                 795
                                                                        ---------------------------------------
                                                                                     2,921                 795

Investment in Northern Border Pipeline Company                                     248,735             250,450
Investment in Tuscarora Gas Transmission Company                                    27,161                   -
                                                                        ---------------------------------------
                                                                                   278,817             251,245
                                                                        ---------------------------------------
                                                                        ---------------------------------------

---------------------------------------------------------------------------------------------------------------

LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities
   Accounts payable                                                                    729                 407
   Distributions payable                                                             8,550                   -
                                                                        ---------------------------------------
                                                                                     9,279                 407
                                                                        ---------------------------------------

Long-Term Debt                                                                      24,500                   -

Partners' Capital
   Common units                                                                    203,858             208,573
   Subordinated units                                                               36,346              37,248
   General partner                                                                   4,834               5,017
                                                                        ---------------------------------------
                                                                                   245,038             250,838
                                                                        ---------------------------------------
                                                                                   278,817             251,245
                                                                        ---------------------------------------
                                                                        ---------------------------------------
</TABLE>


See accompanying Notes to Condensed Financial Statements.



                                       4
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
(UNAUDITED)                                                        NINE MONTHS ENDED         May 28 (1) -
(THOUSANDS OF DOLLARS)                                            SEPTEMBER 30, 2000    September 30,1999
----------------------------------------------------------------------------------------------------------
<S>                                                               <C>                   <C>
CASH GENERATED FROM OPERATIONS
Net income                                                                   26,857              11,485
Add/(Deduct):
Distributions received in excess of/(less than)
     equity income                                                            2,989              (8,518)
Decrease in operating working capital                                           322                 279
                                                                  ----------------------------------------
                                                                             30,168               3,246
                                                                  ----------------------------------------
INVESTING ACTIVITIES
Investment in Tuscarora Gas Transmission Company                            (28,435)                  -
                                                                  ----------------------------------------
                                                                            (28,435)                  -
                                                                  ----------------------------------------
FINANCING ACTIVITIES
Distributions paid                                                          (24,107)             (3,002)
Long-term debt issued                                                        24,500                   -
Due to affiliate                                                                 -                  300
Common units issued                                                              -                7,501
Subordinated units redeemed                                                      -               (7,501)
                                                                  ----------------------------------------
                                                                                393              (2,702)
                                                                  ----------------------------------------

INCREASE IN CASH                                                              2,126                 544

CASH, BEGINNING OF PERIOD                                                       795                   -
                                                                  ----------------------------------------
CASH, END OF PERIOD                                                           2,921                 544
                                                                  ----------------------------------------
                                                                  ----------------------------------------
</TABLE>

(1) Commencement of operations

See accompanying Notes to Condensed Financial Statements.




                                       5
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (unaudited)

NOTE 1    BASIS OF PRESENTATION

TC PipeLines, LP, a Delaware limited partnership, and its subsidiary limited
partnerships, TC PipeLines Intermediate Limited Partnership, a Delaware limited
partnership, and TC Tuscarora Intermediate Limited Partnership, a Delaware
limited partnership, are collectively referred to herein as TC PipeLines or the
Partnership.

The financial statements have been prepared by management in accordance with
United States generally accepted accounting principles. Amounts are stated in
United States dollars.

Since a determination of many assets, liabilities, revenues and expenses is
dependent upon future events, the preparation of these financial statements
requires the use of estimates and assumptions which have been made using careful
judgment. In the opinion of management, these financial statements have been
properly prepared within reasonable limits of materiality and include all
adjustments (consisting primarily of normal recurring accruals) necessary to
present fairly the results of operations for the three and nine months ended
September 30, 2000, the three months ended September 30, 1999 and the period May
28 to September 30, 1999, the financial position as at September 30, 2000 and
December 31, 1999 and the cash flows for the nine months ended September 30,
2000 and the period May 28 to September 30, 1999.

The results of operations for the three and nine months ended September 30,
2000, the three months ended September 30, 1999 and the period May 28 to
September 30, 1999 are not necessarily indicative of the results that may be
expected for a full fiscal year.

NOTE 2    FORMATION OF PARTNERSHIP

The Partnership commenced operations on May 28, 1999 when it issued 14,300,000
common units (11,500,000 to the public and 2,800,000 to an affiliate of the
general partner) for net proceeds of $274.6 million, after deducting
underwriters' fees of $15.0 million. These proceeds, along with 3,200,000
subordinated units, a 2% general partner interest and incentive distribution
rights, were issued to TransCanada Border PipeLine Ltd. and TransCan Northern
Ltd. (collectively, the predecessor companies), affiliates of the general
partner, to acquire the predecessor companies' 30% general partner interest in
Northern Border Pipeline Company.

On June 25, 1999, the underwriters exercised a portion of their over-allotment
option under the terms of the underwriting agreement and purchased 390,694
additional common units for net proceeds of $7.5 million. The Partnership used
those proceeds to redeem 390,694 subordinated units from the general partner.

The common units and the subordinated units represent limited partner interests
in the Partnership. During the period which subordinated units are outstanding
(the subordination period), to the extent there is sufficient available cash,
the holders of common units are entitled to receive a minimum quarterly
distribution (MQD), plus any arrearages on the common units, before any
distribution is made to the holders of subordinated units. The holders of
subordinated units will have the right to receive the MQD only after the common
units have received the MQD plus any arrearages in payment of the MQD. The
subordinated units are not entitled to arrearages. Upon expiration of


                                       6
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP


the subordination period, which will generally not occur before June 30, 2004,
the subordinated units will convert into common units on a one-for-one basis and
will then participate pro rata with the other common units in distributions of
available cash.

The holder of the general partner interest is entitled to receive 2% of total
cash distributions until the MQD has been achieved, at which time it will have
the right to receive incentive distributions. Incentive distribution rights
represent the right to receive an increasing percentage of quarterly
distributions of available cash after the MQD has been achieved.

NOTE 3    INVESTMENT IN TUSCARORA GAS TRANSMISSION COMPANY

On September 1, 2000, TC PipeLines completed its acquisition of a 49% general
partner interest in Tuscarora Gas Transmission Company (Tuscarora) for a
purchase price of $28 million. TC PipeLines financed the acquisition with a
combination of cash on hand and third party debt (see Note 6). The Partnership
uses the equity method of accounting for its investment in Tuscarora, over which
it is able to exercise significant influence.

Tuscarora owns a 229-mile, 20-inch diameter interstate pipeline system that
transports natural gas from Malin, Oregon, where it interconnects with
facilities of PG&E Gas Transmission - Northwest, to the Reno, Nevada area.
Tuscarora is regulated by the Federal Energy Regulatory Commission (FERC).

NOTE 4    INVESTMENT IN NORTHERN BORDER PIPELINE COMPANY

The Partnership owns a 30% general partner interest in Northern Border Pipeline
Company (Northern Border Pipeline), a partnership which owns a natural gas
pipeline extending from the Montana-Saskatchewan border near Port of Morgan,
Montana, to a terminus near Manhattan, Illinois. Northern Border Pipeline is
subject to regulation by the FERC.

The Partnership uses the equity method of accounting for its investment in
Northern Border Pipeline, over which it is able to exercise significant
influence. TC PipeLines' equity income for the three and nine months ended
September 30, 2000, the three months ended September 30, 1999 and the period May
28 to September 30, 1999 represents 30% of the net income of Northern Border
Pipeline for the same periods.

The following sets out summarized financial information for Northern Border
Pipeline for the three and nine months ended September 30, 2000, the three
months ended September 30, 1999 and the period May 28 to September 30, 1999 and
as at September 30, 2000 and December 31, 1999. TC PipeLines has held its
general partner interest since May 28, 1999.


                                       7

<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED
(UNAUDITED)                                            SEPTEMBER 30,
                                            ------------------------      NINE MONTHS ENDED         May 28 (1) -
(MILLIONS OF DOLLARS)                       2000               1999      SEPTEMBER 30, 2000    September 30,1999
-----------------------------------------------------------------------------------------------------------------
<S>                                     <C>                   <C>        <C>                   <C>
NORTHERN BORDER PIPELINE
    INCOME STATEMENT
Revenues                                    78.3               73.9                  231.8                101.5
Costs and expenses                         (16.4)             (16.8)                 (51.7)               (23.1)
Depreciation                               (14.3)             (13.1)                 (43.6)               (18.0)
Financial charges and other                (13.3)             (14.9)                 (44.1)               (20.9)
                                        -------------------------------------------------------------------------
Net income                                  34.3               29.1                   92.4                 39.5
                                        -------------------------------------------------------------------------
                                        -------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                   SEPTEMBER 30, 2000    December 31, 1999
(MILLIONS OF DOLLARS)                                                     (unaudited)
-----------------------------------------------------------------------------------------------------------
<S>                                                                <C>                   <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
Cash and cash equivalents                                                        35.9                17.3
Other current assets                                                             36.9                33.8
Plant, property and equipment, net                                            1,692.1             1,731.4
Other assets                                                                     14.6                14.2
Current liabilities                                                            (105.1)             (116.7)
Deferred amounts                                                                 (7.7)              (10.7)
Long-term debt                                                                 (837.6)             (834.5)
                                                                   ----------------------------------------
Partners' capital                                                               829.1               834.8
                                                                   ----------------------------------------
                                                                   ----------------------------------------
</TABLE>

(1) Commencement of operations of TC PipeLines, LP



                                       8
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONCLUDED)

                                TC PIPELINES, LP


NOTE 5   CREDIT FACILITIES AND LONG-TERM DEBT

On August 22, 2000, the Partnership entered into an unsecured three-year credit
facility with a third party (Revolving Credit Facility) under which the
Partnership may borrow up to an aggregate principal amount of $30 million. Loans
under the Revolving Credit Facility may bear interest, at the option of the
Partnership, at a one-, two-, three-, or six-month LIBOR rate plus 87.5 basis
points, or at a floating rate based on the higher of the federal funds effective
rate plus 50 basis points and the prime rate. The Revolving Credit Facility
matures on August 31, 2003. Amounts borrowed may be repaid in part or in full
prior to that time without penalty. The Revolving Credit Facility may be used to
finance capital expenditures and for other general purposes. On September 1,
2000, the Partnership borrowed $24.5 million from the Revolving Credit Facility
to fund a portion of the acquisition price of the 49% general partner interest
in Tuscarora. At September 30, 2000, the Partnership had $24.5 million
outstanding under the Revolving Credit Facility. The weighted average interest
rate for September 2000, the one month the Revolving Credit Facility has been
outstanding, is 7.555%.

On May 28, 1999, the Partnership entered into an unsecured two-year revolving
credit facility with TransCanada PipeLine USA Ltd. (TransCanada Credit
Facility), an affiliate of the general partner, under which the Partnership is
able to borrow up to an aggregate principal amount of $40 million. At September
30, 2000, the Partnership had no amounts outstanding under the TransCanada
Credit Facility.

NOTE 6   NET INCOME PER UNIT

Net income per unit is computed by dividing net income, after deduction of the
general partner's allocation, by the number of common and subordinated units
outstanding.



                                       9
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                                TC PIPELINES, LP

RESULTS OF OPERATIONS OF TC PIPELINES, LP

TC PipeLines, LP (TC PipeLines or the Partnership) was formed by TransCanada
PipeLines Limited (TransCanada) to acquire, own and participate in the
management of United States based pipeline assets. On May 28, 1999, the
Partnership issued 14,300,000 common units (11,500,000 to the public and
2,800,000 to an affiliate of the general partner) through its initial public
offering for net proceeds of $274.6 million. The Partnership used the net
proceeds from this offering, along with 3,200,000 subordinated units, an
aggregate 2% general partner interest and incentive distribution rights, to
acquire the collective 30% general partner interest in Northern Border Pipeline
Company (Northern Border Pipeline) previously held by TransCanada Border
PipeLine Ltd. and TransCan Northern Ltd. (collectively, the predecessor
companies), affiliates of the general partner, TC PipeLines GP, Inc. The
remaining 70% general partner interest in Northern Border Pipeline is held by
Northern Border Partners, L.P., a publicly traded limited partnership that is
not affiliated with TC PipeLines.

Subsequent to the initial public offering, the underwriters exercised a portion
of their over-allotment option and purchased 390,694 additional common units for
net proceeds of $7.5 million. The Partnership used these proceeds to redeem an
equal number of subordinated units held by the general partner.

TC PipeLines, LP accounts for its interest in Northern Border Pipeline using the
equity method of accounting. The Partnership's initial investment in Northern
Border Pipeline was recorded at $241.7 million, the combined carrying values of
the investment in Northern Border Pipeline as reflected in the accounts of the
predecessor companies as at May 28, 1999. This amount equated to 30% of Northern
Border Pipeline's partners' capital as at May 28, 1999.

ACQUISITION OF INTEREST IN TUSCARORA

On September 1, 2000, TC PipeLines, through TC Tuscarora Intermediate Limited
Partnership, completed its acquisition of a 49% general partner interest in
Tuscarora Gas Transmission Company (Tuscarora) for a purchase price of $28
million. The Partnership borrowed $24.5 million from the Revolving Credit
Facility (see Liquidity and Capital Resources of TC PipeLines, LP - General) to
fund a portion of the acquisition price of the 49% general partner interest in
Tuscarora. The remainder of the purchase price was funded with cash on hand. The
Partnership uses the equity method of accounting for its investment in
Tuscarora, over which it is able to exercise significant influence.

Tuscarora owns a 229-mile, 20-inch diameter interstate pipeline system that
transports natural gas from Malin, Oregon, where it interconnects with
facilities of PG&E Gas Transmission - Northwest, to the Reno, Nevada area.
Tuscarora is regulated by the Federal Energy Regulatory Commission (FERC).

NORTHERN BORDER PIPELINE RATE SETTLEMENT

On September 26, 2000, Northern Border Pipeline filed a stipulation and
agreement with the FERC that documents the settlement of its pending rate
case (Settlement). TC PipeLines expects the FERC will act on the Settlement
in the first quarter of 2001. The Settlement results in a change to Northern
Border


                                       10
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP


Pipeline's rate model from a cost of service form of tariff to one based on
stated rates, which is consistent with the tariff structure of other United
States natural gas pipelines (see Results of Operations of Northern Border
Pipeline Company).

THIRD QUARTER 2000 COMPARED WITH THIRD QUARTER 1999

Equity income from the Partnership's investment in Northern Border Pipeline
increased $1.6 million to $10.3 million for the third quarter of 2000, compared
to equity income of $8.7 million for the same period in 1999. Northern Border
Pipeline's net income for the third quarter of 2000 reflects the provisions of
the Settlement, resulting in incremental equity income of $0.6 million for TC
PipeLines. The Settlement also brings closure to several issues for which
Northern Border Pipeline had previously recorded regulatory reserves. As a
result, certain of these reserves have been brought into income in the third
quarter of 2000, resulting in increased equity income to TC PipeLines of
approximately $0.8 million.


                                       11
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

For the third quarter of 2000, the Partnership recorded equity income of $0.2
million from its investment in Tuscarora reflecting activity for September 2000,
the one month that the Partnership has held its general partner interest.

TC PipeLines reported general and administrative expenses of $0.4 million for
the third quarter of 2000 compared to $0.2 million for the same period in 1999.
This increase reflects higher administrative costs in 2000.

The Partnership reported financial charges and other of $0.1 million for the
third quarter of 2000. This represents interest expense, which relates to the
$24.5 million drawn from the Revolving Credit Facility on September 1, 2000 to
finance a portion of the acquisition price of the 49% general partner interest
in Tuscarora, partially offset by interest income.

NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED WITH PERIOD MAY 28 TO
SEPTEMBER 30, 1999

Equity income earned by TC PipeLines from its investment in Northern Border
Pipeline was $27.7 million for the nine months ended September 30, 2000,
compared to $11.9 million for the period from May 28 to September 30, 1999. The
$15.8 million increase in equity income from Northern Border Pipeline reflects a
full nine months of activity in 2000 compared to approximately four months of
activity in 1999. TC PipeLines acquired its 30% general partner interest in
Northern Border Pipeline on May 28, 1999.

For the nine months ended September 30, 2000, the Partnership recorded equity
income of $0.2 million from its investment in Tuscarora reflecting activity for
September 2000, the one month that the Partnership has held its general partner
interest.

TC PipeLines incurred general and administrative expenses of $1.0 million for
the nine months ended September 30, 2000, compared to $0.4 million for the
period from May 28 to September 30, 1999. This increase reflects higher
administrative costs in 2000.

The Partnership reported financial charges and other of $0.1 million for the
nine months ended September 30, 2000. This represents interest expense, which
relates to the $24.5 million drawn from the Revolving Credit Facility on
September 1, 2000 to finance a portion of the acquisition of the 49% general
partner interest in Tuscarora, partially offset by interest income.

LIQUIDITY AND CAPITAL RESOURCES OF TC PIPELINES, LP

CASH DISTRIBUTION POLICY OF TC PIPELINES, LP

During the subordination period, which generally cannot end before June 30,
2004, the Partnership will make distributions of available cash as defined in
the partnership agreement in the following manner:

     -    First, 98% to the common units, pro rata, and 2% to the general
          partner, until there has been distributed for each outstanding common
          unit an amount equal to the minimum quarterly distribution for that
          quarter;


                                       12
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

     -    Second, 98% to the common units, pro rata, and 2% to the general
          partner, until there has been distributed for each outstanding common
          unit an amount equal to any arrearages in payment of the minimum
          quarterly distribution on the common units for that quarter and for
          any prior quarters during the subordination period;

     -    Third, 98% to the subordinated units, pro rata, and 2% to the general
          partner, until there has been distributed for each outstanding
          subordinated unit an amount equal to the minimum quarterly
          distribution for that quarter; and

     -    Thereafter, in a manner whereby the general partner has rights
          (referred to as incentive distribution rights) to receive increasing
          percentages of excess quarterly distributions over specified
          distribution thresholds.

GENERAL

On September 5, 2000, the Partnership announced an increase in the Partnership's
quarterly distribution from $0.45 to $0.475 per unit for the third quarter of
2000. This distribution is payable on November 14, 2000 to unitholders of record
as of October 31, 2000. This will amount to a cash distribution totaling $8.6
million, which will be paid out in the following manner: $7.0 million to common
unitholders, $1.3 million to the general partner as holder of the subordinated
units, and $0.3 million to the general partner, as holder of incentive
distribution rights and in respect of its 2% general partner interest.

On August 22, 2000, the Partnership entered into an unsecured three-year credit
facility with a third party (Revolving Credit Facility) under which the
Partnership may borrow up to an aggregate principal amount of $30 million. Loans
under the Revolving Credit Facility may bear interest, at the option of the
Partnership, at a one-, two-, three-, or six-month LIBOR rate plus 87.5 basis
points, or at a floating rate based on the higher of the federal funds effective
rate plus 50 basis points and the prime rate. The Revolving Credit Facility
matures on August 31, 2003. Amounts borrowed may be repaid in part or in full
prior to that time without penalty. The Revolving Credit Facility may be used to
finance capital expenditures and for other general purposes. On September 1,
2000, the Partnership borrowed $24.5 million from the Revolving Credit Facility
to fund a portion of the acquisition price of the 49% general partner interest
in Tuscarora. The weighted average interest rate for September 2000, the one
month the Revolving Credit Facility has been outstanding, is 7.555%.

On May 28, 1999, the Partnership entered into a $40 million unsecured
two-year revolving credit facility with TransCanada PipeLine USA Ltd.
(TransCanada Credit Facility), an affiliate of the general partner. The
credit facility bears interest at LIBOR plus 125 basis points. The purpose of
the revolving credit facility is to provide borrowings to fund capital
expenditures, to fund capital contributions to Northern Border Pipeline and
Tuscarora and for working capital and other general business purposes,
including funding cash distributions to partners, if necessary. At September
30, 2000, the Partnership had no amount outstanding under this credit
facility.


                                       13
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities increased to $30.2 million for
the nine months ended September 30, 2000 from $3.2 million for the period May
28 (the date the Partnership commenced operations) to September 30, 1999. For
the nine months ended September 30, 2000, the Partnership received cash
distributions in aggregate of $30.9 million from its equity investments in
Northern Border Pipeline and Tuscarora. For the period May 28 to September
30, 1999, the Partnership received cash distributions of $3.3 million from
Northern Border Pipeline.

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing of $28.4 million for the nine months ended September
30, 2000 relates to the purchase of the 49% general partner interest in
Tuscarora.

CASH FLOWS FROM FINANCING ACTIVITIES

For the nine months ended September 30, 2000, the Partnership has paid $24.1
million in distributions: $19.8 million to common unitholders, $3.8 million
to the general partner as holder of the subordinated units, and $0.5 million
to the general partner in respect of its 2% general partner interest. This
compares to cash distributions of $3.0 million which were paid by the
Partnership for the period May 28 to September 30, 1999.

On September 1, 2000, the Partnership borrowed $24.5 million from the Revolving
Credit Facility to fund a portion of the acquisition price of the 49% general
partner interest in Tuscarora. At September 30, 2000, the Partnership had $24.5
million outstanding under the Revolving Credit Facility.

CAPITAL REQUIREMENTS

To the extent TC PipeLines has any capital requirements with respect to its
investments in Northern Border Pipeline and Tuscarora or makes further
acquisitions in 2000, TC PipeLines expects to finance these requirements with
debt and/or equity.


                                       14
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

RESULTS OF OPERATIONS OF NORTHERN BORDER PIPELINE COMPANY

Since the general partner interest in Northern Border Pipeline generates a
significant portion of the Partnership's equity income, results of operations
are influenced by and reflect the same factors that influence the financial
results of Northern Border Pipeline.

The following sets out summarized financial information for Northern Border
Pipeline for the three and nine months ended September 30, 2000 and 1999 and as
at September 30, 2000 and December 31, 1999. TC PipeLines, LP has held its 30%
general partner interest since May 28, 1999.

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                   SEPTEMBER 30,               SEPTEMBER 30,
(UNAUDITED)                                                --------------------------------------------------
(MILLIONS OF DOLLARS)                                        2000           1999           2000         1999
-------------------------------------------------------------------------------------------------------------
<S>                                                      <C>              <C>            <C>          <C>
NORTHERN BORDER PIPELINE INCOME STATEMENT
Revenues                                                    78.3           73.9          231.8        220.6
Costs and expenses                                         (16.4)         (16.8)         (51.7)       (49.7)
Depreciation                                               (14.3)         (13.1)         (43.6)       (38.8)
Financial charges and other                                (13.3)         (14.9)         (44.1)       (43.7)
                                                         ----------------------------------------------------
Net income                                                  34.3           29.1           92.4         88.4
                                                         ----------------------------------------------------
                                                         ----------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                                                    SEPTEMBER 30, 2000   December 31, 1999
(MILLIONS OF DOLLARS)                                                      (unaudited)
-----------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                  <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
Cash and cash equivalents                                                        35.9                17.3
Other current assets                                                             36.9                33.8
Plant, property and equipment, net                                            1,692.1             1,731.4
Other assets                                                                     14.6                14.2
Current liabilities                                                            (105.1)             (116.7)
Deferred amounts                                                                 (7.7)              (10.7)
Long-term debt                                                                 (837.6)             (834.5)
                                                                   -----------------------------------------
Partners' capital                                                               829.1               834.8
                                                                   -----------------------------------------
                                                                   -----------------------------------------
</TABLE>

Northern Border Pipeline's revenue is derived from agreements with various
shippers for the transportation of natural gas. It transports gas under a FERC
regulated tariff. Northern Border Pipeline has used a cost of service form of
tariff since its inception but has agreed to convert to stated rates as part of
a settlement of its current rate case discussed below.

The cost of service tariff provides Northern Border Pipeline an opportunity to
recover all of the operations and maintenance costs of the pipeline, taxes other
than income taxes, interest, depreciation and amortization, an allowance for
income taxes and a regulated return on equity. Northern Border Pipeline is
generally allowed to collect from its shippers a return on regulated rate base
as well as recover that rate base through depreciation and amortization. The
return amount Northern Border Pipeline may collect from its shippers declines as
the rate base is recovered. Billings for the firm transportation agreements are
based on contracted volumes to determine the allocable share of the cost of
service and are not dependent upon the percentage of available capacity actually
used.


                                       15
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

Northern Border Pipeline filed a rate proceeding with the FERC in May 1999 for,
among other things, a redetermination of its allowed equity rate of return. The
total annual cost of service increase due to Northern Border Pipeline's proposed
changes is approximately $30 million. In June 1999, the FERC issued an order in
which the proposed changes were suspended until December 1, 1999, after which
the proposed changes were implemented with subsequent billings subject to
refund.

On September 26, 2000, Northern Border Pipeline filed a stipulation and
agreement that documents the proposed settlement of its pending rate case.
The settlement will become effective if and when approved by the FERC. TC
PipeLines anticipates the FERC will act on the settlement in the first
quarter of 2001. If the settlement is approved, shippers will pay stated
transportation rates based on a straight fixed variable rate design. Under
the straight fixed variable rate design, approximately 98% of the shipper
payments are attributed to demand charges, based upon contracted firm
capacity, and 2% to commodity charges based on the volumes of gas actually
transported on the system. On a per unit basis, the rates under the
settlement are approximately equal to the previous rates under the cost of
service tariff. The settlement further provides for the incorporation into
Northern Border Pipeline's rate base all of the construction costs of The
Chicago Project, which was Northern Border Pipeline's expansion and extension
project placed in service in December 1998, and specifies an annual
depreciation rate on transmission plant of 2.25%.

Under the settlement, both Northern Border Pipeline and its existing shippers
will not be able to seek rate changes until November 1, 2005. Northern Border
Pipeline's earnings and cash flow will depend on its future costs, contracted
capacity, the volumes of gas transported and its ability to recontract
capacity at acceptable rates. Northern Border Pipeline has netted a provision
for rate refunds against operating revenues to reflect the significant terms
of the settlement in its Statement of Income. While the proposed settlement
agreement has not been opposed by any of its shippers, TC PipeLines can give
no assurance whether it will be approved by the FERC.

THIRD QUARTER 2000 COMPARED WITH THIRD QUARTER 1999

Operating revenues, net increased $4.3 million (6%) for the third quarter of
2000, as compared to the same period in 1999. Northern Border Pipeline's net
operating revenues for 2000 reflect the significant terms of the settlement
discussed previously (see Results of Operations of TC PipeLines, LP - Northern
Border Pipeline Rate Settlement). Operating revenues for 1999 were determined
under Northern Border Pipeline's cost of service tariff.

Depreciation expense increased $1.1 million (9%) for the third quarter of 2000,
as compared to the same period in 1999, due primarily to an increase in the
depreciation rate applied to transmission plant. As required by its cost of
service tariff, Northern Border Pipeline used a depreciation rate of 2.0% for
all of 1999, which was increased to 2.3% beginning January 1, 2000.

Financial charges and other consists of interest expense and other income.


                                       16
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

Interest expense increased $1.0 million (6%) for the third quarter of 2000, as
compared to the same period in 1999, due primarily to an increase in interest
rates between 1999 and 2000.

Other income increased $2.6 million for the third quarter of 2000, as compared
to the same period in 1999, due primarily to a reduction of reserves previously
established for regulatory issues.

NINE MONTHS SEPTEMBER 30, 2000 COMPARED WITH NINE MONTHS SEPTEMBER 30, 1999

Operating revenues, net increased $11.2 million (5%) for the first nine months
of 2000, as compared to the same period in 1999. Northern Border Pipeline's net
operating revenues for 2000 reflect the significant terms of the settlement
discussed previously. Operating revenues for 1999 were determined under Northern
Border Pipeline's cost of service tariff.

Costs and expenses consists of operations and maintenance expense and taxes
other than income.

Operations and maintenance expense increased $2.1 million (8%) for the first
nine months of 2000, as compared to the same period in 1999, due primarily to
increased administrative expenses for the pipeline.

Depreciation expense increased $4.8 million (12%) for the first nine months of
2000, as compared to the same period in 1999, due primarily to an increase in
the depreciation rate applied to transmission plant. As required by its cost of
service tariff, Northern Border Pipeline used a depreciation rate of 2.0% for
all of 1999, which was increased to 2.3% beginning January 1, 2000.

Financial charges and other consists of interest expense and other income.

Interest expense increased $4.7 million (11%) for the first nine months of 2000,
as compared to the same period in 1999, due primarily to an increase in interest
rates between 1999 and 2000.

Other income increased $4.3 million for the first nine months of 2000, as
compared to the same period in 1999, due primarily to a reduction of reserves
previously established for regulatory issues. Additionally, the 2000 results
reflect income earned from third-party usage of capacity on Northern Border
Pipeline's microwave system.

LIQUIDITY AND CAPITAL RESOURCES OF NORTHERN BORDER PIPELINE COMPANY

GENERAL

In August 1999, Northern Border Pipeline completed a private offering of $200
million of 7.75% Senior Notes due 2009, which notes were subsequently exchanged
in a registered offering for notes with substantially identical terms (Senior
Notes). The proceeds from the Senior Notes were used to reduce indebtedness
under a June 1997 credit agreement.

Northern Border Pipeline entered into a credit agreement (Pipeline Credit
Agreement) with certain financial institutions in June 1997. The

                                       17
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

                                TC PIPELINES, LP

Pipeline Credit Agreement is comprised of a term loan and a $200 million
five-year revolving credit facility, both maturing in June 2002. At September
30, 2000, $424.0 million was outstanding under the term loan and $60.0 million
was outstanding under the revolving credit facility.

At September 30, 2000, Northern Border Pipeline also had outstanding $184
million of senior notes issued in a private placement under a July 1992 note
purchase agreement. The note purchase agreement provides for four series of
notes, Series A through D, maturing between August 2000 and August 2003. The
Series A Notes with a principal amount of $66 million were repaid in August 2000
primarily by borrowing under the Pipeline Credit Agreement. The Series B Notes
with a principal amount of $41 million mature in August 2001.

Short-term liquidity needs will be met by internal sources and through the
revolving credit facility discussed above. Long-term capital needs may be met
through the ability to issue long-term indebtedness.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities increased $11.9 million to $145.2
million for the first nine months of 2000, as compared to the same period in
1999, primarily due to the billings collected subject to refund related to
Northern Border Pipeline's current rate proceeding.

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures of $7.2 million for the first nine months of 2000
included $3.3 million for Project 2000, an expansion and 34-mile extension of
Northern Border Pipeline's existing natural gas pipeline system expected to
be placed in service in November 2001. For the comparable period in 1999,
capital expenditures were $89.6 million and included $78.3 million for The
Chicago Project. The remaining capital expenditures for 2000 and 1999 were
primarily related to renewals and replacements of existing facilities.

Total capital expenditures for 2000 are estimated to be $18 million, including
$8 million for Project 2000. The remaining capital expenditures planned for 2000
are for renewals and replacements of existing facilities. Northern Border
Pipeline currently anticipates funding its 2000 capital expenditures primarily
by using internal sources and borrowing on the revolving credit facility.


                                       18
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONCLUDED)

                                TC PIPELINES, LP

CASH FLOWS FROM FINANCING ACTIVITIES

Cash flows used in financing activities were $119.4 million for the first nine
months of 2000, as compared to $60.6 million for the same period in 1999.
Distributions paid to the general partners remained relatively constant between
years with distributions of $98.2 million in 2000 compared to $97.9 million in
1999. In August 2000, Northern Border Pipeline repaid its Series A Notes of $66
million primarily by borrowing under the Pipeline Credit Agreement. Under the
Pipeline Credit Agreement, borrowings totaled $75 million and repayments totaled
$30 million during the nine months ended September 30, 2000. Financing
activities for the nine months ended September 30, 1999, included $197.5 million
from the issuance of the Senior Notes, net of associated debt discounts and
issuance costs, and $12.9 million from the termination of the interest rate
forward agreements. Advances under the Pipeline Credit Agreement, which were
primarily used to finance a portion of the capital expenditures for The Chicago
Project, were $82.0 million for the nine months ended September 30, 1999. During
the nine months ended September 30, 1999, $255.0 million was repaid on the
Pipeline Credit Agreement.

NEW ACCOUNTING PRONOUNCEMENT

In June 1998, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." In June 1999, the FASB issued SFAS No. 137
which deferred the effective date of SFAS No. 133 to fiscal years beginning
after June 15, 2000. TC PipeLines does not plan to effect the early adoption of
SFAS No. 133. In June 2000, the FASB issued SFAS No. 138, which amended certain
guidance within SFAS No. 133. TC PipeLines believes that SFAS No. 133 (as
amended) will not have a material impact on its financial position or results of
operations.

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report are forward-looking and relate
to, among other things, anticipated financial performance, business prospects
and strategies. Forward-looking information typically contains statements
with words such as "anticipate," "believe," "estimate," "expect," "plan,"
"target," or similar words suggesting future outcomes. By their nature, such
statements are subject to various risks and uncertainties that could cause TC
PipeLines, LP's actual results and experience to differ materially from the
anticipated results. Such risks and uncertainties include, but are not
limited to: regulatory decisions, particularly those of the FERC, including
the final approval of Northern Border Pipeline's rate case settlement; future
demand for natural gas; cost of acquisitions, including related debt service
payments; tariff and transportation charges to be collected by Northern
Border Pipeline and Tuscarora for transportation services on the Northern
Border Pipeline and Tuscarora pipeline systems, respectively; overcapacity in
the industry; and prevailing economic conditions, particularly conditions of
the capital and equity markets. For further information on additional risks
and uncertainties, you are advised to consult TC PipeLines, LP's 1999 Form
10-K under the heading "Forward-Looking Information."

                                       19
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONCLUDED)

       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                                TC PIPELINES, LP


TC PipeLines, LP's interest rate exposure results from its Revolving Credit
Facility which is subject to variability in LIBOR interest rates. If LIBOR
interest rates average one percentage point more than rates in effect as of
September 30, 2000, annual interest expense would increase by approximately $0.2
million.

The Partnership's market risk sensitivity is also influenced by and reflects the
same factors that influence Northern Border Pipeline.

Northern Border Pipeline's interest rate exposure results from the portion of
its debt portfolio subject to variable rates. To mitigate potential
fluctuations in interest rates, Northern Border Pipeline maintains a
significant portion of its debt portfolio in fixed rate debt. Northern Border
Pipeline also uses interest rate swap agreements to manage its level of
exposure to interest rate changes. Northern Border Pipeline's annual interest
rate exposure from a hypothetical 1% increase in interest rates is
approximately $4.4 million at September 30, 2000. In TC PipeLines' Annual
Report on Form 10-K for the year ended December 31, 1999, the Partnership
reported that, under the Northern Border Pipeline cost of service tariff,
Northern Border Pipeline would be able to recover an increase in interest
expense, if an increase were to occur. If the rate case settlement is
approved, Northern Border Pipeline would bear the risk for an increase in
interest rates.


                                       20
<PAGE>


                           PART II. OTHER INFORMATION

                                TC PIPELINES, LP

                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits.

     1.   Financial Data Schedule

     2.   Indenture, Assignment and Security Agreement dated December 21, 1995
          between Tuscarora Gas Transmission Company and Wilmington Trust
          Company, Trustee.

     3.   Credit Agreement dated as of August 22, 2000 among TC PipeLines, LP,
          the Lenders Party thereto and Bank One, as Agent.

(b)  Reports on Form 8-K

     1.   Report on Form 8-K dated September 1, 2000 and filed on September
          14, 2000 reporting the completion of the acquisition by TC
          PipeLines, LP of a 49% general partner interest in Tuscarora Gas
          Transmission Company.

     2.   Report on Form 8-K dated September 26, 2000 and filed on October 3,
          2000 reporting the filing by Northern Border Pipeline Company of a
          stipulation and agreement that documents the settlement of its
          pending rate case.


                                       21
<PAGE>


                                   SIGNATURES

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


                                TC PIPELINES, LP
                                (a Delaware Limited Partnership)

                                By: TC PipeLines GP, Inc., its general partner

                                By: /s/  Theresa Jang
                                   --------------------------------------
Date:  November 13, 2000           Theresa Jang
                                   Controller


                                       22
<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.    Description
<S>            <C>

     27        Financial Data Schedule

     99.1      Indenture, Assignment and Security Agreement dated December 21,
               1995 between Tuscarora Gas Transmission Company and Wilmington
               Trust Company, Trustee.

     99.2      Credit Agreement dated as of August 22, 2000 among TC PipeLines,
               LP, the Lenders Party thereto and Bank One, as Agent.
</TABLE>


                                       23