<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 JUNE 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 incorporation              (I.R.S. Employer
              or organization)                          Identification Number)


     110 Turnpike Road, Suite 203
      Westborough, Massachusetts                                 01581
---------------------------------------                 ----------------------
(Address of principal executive offices)                      (Zip code)

                                  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 report(s), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  [X]       No  [  ]

     As of August 11, 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 six months ended
               June 30, 2000 and period May 28 - June 30, 1999          3

             Balance Sheet - June 30, 2000 and December 31, 1999        3

             Statement of Cash Flows - Six months ended
               June 30, 2000 and period May 28 - June 30, 1999          4

             Notes to Condensed Financial Statements                    5

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

             Recent Developments                                        8

             Results of Operations of TC PipeLines, LP                  8

             Liquidity and Capital Resources of TC PipeLines, LP       10

             Results of Operations of Northern Border
               Pipeline Company                                        11

             Liquidity and Capital Resources of Northern Border
               Pipeline Company                                        14

    ITEM 3.  Quantitative and Qualitative Disclosures About
               Market Risk                                             16

PART II.  OTHER INFORMATION

    ITEM 6.  Exhibits and Reports on Form 8-K                          17
</TABLE>

                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                                TC PIPELINES, LP

                               STATEMENT OF INCOME


<TABLE>
<CAPTION>

(UNAUDITED)
(THOUSANDS OF DOLLARS, EXCEPT                Three months ended        Six months ended            May 28 (1) -
  PER UNIT AMOUNTS)                               June 30, 2000           June 30, 2000           June 30, 1999
---------------------------------------------------------------------------------------------------------------
<S>                                          <C>                       <C>                        <C>
EQUITY INCOME FROM INVESTMENT IN
  NORTHERN BORDER PIPELINE COMPANY                        8,824                  17,447                   3,130
GENERAL AND ADMINISTRATIVE EXPENSES                         291                     570                     144
                                                         ------                  ------                  ------
NET INCOME                                                8,533                  16,877                   2,986
                                                         ------                  ------                  ------
                                                         ------                  ------                  ------

NET INCOME ALLOCATION
Common units                                              7,020                  13,884                   2,456
Subordinated units                                        1,342                   2,655                     470
General partner                                             171                     338                      60
                                                         ------                  ------                  ------
                                                          8,533                  16,877                   2,986
                                                         ------                  ------                  ------
                                                         ------                  ------                  ------

NET INCOME PER UNIT                                       $0.48                   $0.95                   $0.17
                                                         ------                  ------                  ------
                                                         ------                  ------                  ------

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

                                  BALANCE SHEET
<TABLE>
<CAPTION>
                                                  June 30, 2000        December 31,
(THOUSANDS OF DOLLARS)                              (unaudited)                1999
-----------------------------------------------------------------------------------
<S>                                               <C>                  <C>
ASSETS
Current Assets
  Cash                                                    3,313                 795
                                                        -------             -------
                                                          3,313                 795
                                                        -------             -------

Investment in Northern Border Pipeline Company          248,601             250,450
Deferred Amounts                                             45                 -
                                                        -------             -------
                                                        251,959             251,245
                                                        -------             -------
                                                        -------             -------

-----------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
  Accounts payable                                          315                 407
                                                        -------             -------
                                                            315                 407
                                                        -------             -------
Partners' Capital
  Common units                                          209,236             208,573
  Subordinated units                                     37,375              37,248
  General partner                                         5,033               5,017
                                                        -------             -------
                                                        251,644             250,838
                                                        -------             -------
                                                        251,959             251,245
                                                        -------             -------
                                                        -------             -------
</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

                             STATEMENT OF CASH FLOWS


<TABLE>
<CAPTION>

(UNAUDITED)                                              Six months ended          May 28 (1) -
(THOUSANDS OF DOLLARS)                                      June 30, 2000         June 30, 1999
-----------------------------------------------------------------------------------------------
<S>                                                      <C>                      <C>
CASH GENERATED FROM OPERATIONS
Net income                                                         16,877                 2,986
Add/(Deduct):
Distributions received in excess of equity income                   1,849                (3,130)
(Increase)/decrease in operating working capital                      (92)                  144
                                                                  -------                ------
                                                                   18,634                   -
                                                                  -------                ------

INVESTING ACTIVITIES
Deferred amounts                                                      (45)                  -
                                                                  -------                ------
                                                                      (45)                  -
                                                                  -------                ------

FINANCING ACTIVITIES
Distributions paid                                                (16,071)                  -
Due to affiliate                                                      -                     300
                                                                  -------                ------
                                                                  (16,071)                  300
                                                                  -------                ------

INCREASE IN CASH                                                    2,518                   300
CASH, BEGINNING OF PERIOD                                             795                   -
                                                                  -------                ------

CASH, END OF PERIOD                                                 3,313                   300
                                                                  -------                ------
                                                                  -------                ------
</TABLE>


(1)  Commencement of operations

See accompanying Notes to Condensed Financial Statements.


                                       4
<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
partnership, TC PipeLines 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 six months ended June 30, 2000 and the period May 28 to June
30, 1999, the financial position as at June 30, 2000 and December 31, 1999
and the cash flows for the six months ended June 30, 2000 and the period May
28 to June 30, 1999.

     The results of operations for the three and six months ended June 30,
2000 and the period May 28 to June 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 the
subordination period, which will generally not occur before June


                                       5
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP


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 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 Federal Energy Regulatory Commission
(FERC). Northern Border Pipeline's accounting policies conform to United
States generally accepted accounting principles, as applied in the case of
regulated entities.

     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 six months ended
June 30, 2000 and the period May 28 to June 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 six months ended June 30, 2000 and the
period May 28 to June 30, 1999 and as at June 30, 2000 and December 31, 1999.
TC PipeLines has held its general partner interest since May 28, 1999.

<TABLE>
<CAPTION>

(UNAUDITED)                                        Three months ended         Six months ended            May 28 -
(MILLIONS OF DOLLARS)                                   June 30, 2000            June 30, 2000       June 30, 1999
------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                        <C>                    <C>
NORTHERN BORDER PIPELINE INCOME STATEMENT
Revenues                                                         77.3                    153.6                27.6
Costs and expenses                                              (18.5)                   (35.3)               (6.3)
Depreciation                                                    (14.5)                   (29.4)               (4.9)
Financial charges and other                                     (14.9)                   (30.8)               (6.0)
                                                                 ----                    -----                ----
Net income                                                       29.4                     58.1                10.4
                                                                 ----                    -----                ----
                                                                 ----                    -----                ----
</TABLE>

                                       6
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONCLUDED)

                                TC PIPELINES, LP


<TABLE>
<CAPTION>

                                           June 30, 2000      December 31,
(MILLIONS OF DOLLARS)                         (unaudited)             1999
--------------------------------------------------------------------------
<S>                                        <C>                <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
Cash and cash equivalents                           36.2              17.3
Other current assets                                36.8              33.8
Plant, property and equipment, net               1,702.7           1,731.4
Other assets                                        13.8              14.2
Current liabilities                               (126.4)           (116.7)
Reserves and deferred credits                      (10.5)            (10.7)
Long-term debt                                    (823.9)           (834.5)
                                                 -------           -------
Partners' capital                                  828.7             834.8
                                                 -------           -------
                                                 -------           -------
</TABLE>

NOTE 4   CREDIT FACILITY

On May 28, 1999, the Partnership entered into a $40 million unsecured two-year
revolving credit facility with TransCanada PipeLine USA Ltd., an affiliate of
the general partner. At June 30, 2000, the Partnership had no amount outstanding
under this credit facility.

NOTE 5   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.

NOTE 6   ACQUISITION

On July 19, 2000, a subsidiary of TC PipeLines entered into an agreement to
purchase a 49% general partner interest in Tuscarora Gas Transmission Company
from an indirect subsidiary of TransCanada PipeLines Limited for $28 million.
TransCanada will retain a 1% general partner interest in Tuscarora. The
remaining 50% interest is held by Sierra Pacific Resources. The transaction
is expected to close in the third quarter of 2000, subject to customary
closing conditions.

     TC PipeLines plans to finance the acquisition with a combination of cash
on hand and third party debt. The Partnership expects to enter into a
three-year credit facility under which the Partnership would be able to
borrow up to an aggregate principal amount of $30 million.

     The Partnership plans to use the equity method of accounting for its
investment in Tuscarora.

     Tuscarora owns a 229-mile, 20-inch diameter interstate pipeline 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 FERC and is subject to the FERC's rules,
regulations and accounting procedures.

                                       7
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


RECENT DEVELOPMENTS

ACQUISITION

On July 19, 2000, a subsidiary of TC PipeLines, LP (TC PipeLines or the
Partnership) entered into an agreement to purchase a 49% general partner
interest in Tuscarora Gas Transmission Company (Tuscarora) from an indirect
subsidiary of TransCanada PipeLines Limited (TransCanada) for $28 million.
TransCanada will retain a 1% general partner interest in Tuscarora. The
remaining 50% interest is held by Sierra Pacific Resources. The transaction
is expected to close in the third quarter of 2000, subject to customary
closing conditions.

TC PipeLines plans to finance the acquisition with a combination of cash on
hand and third party debt. The Partnership expects to enter into a three-year
credit facility under which the Partnership would be able to borrow up to an
aggregate principal amount of $30 million.

Tuscarora owns a 229-mile, 20-inch diameter interstate pipeline 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) and
is subject to the FERC's rules, regulations and accounting procedures.

RESULTS OF OPERATIONS OF TC PIPELINES, LP

TC PipeLines was formed by 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 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.

Currently, the only material asset of the Partnership is the 30% general
partner interest in Northern Border Pipeline.

TC PipeLines 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


                                       8
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


at May 28, 1999. This amount equated to 30% of Northern Border Pipeline's
partners' capital as at May 28, 1999.

Since the general partner interest in Northern Border Pipeline is currently
the Partnership's only source of income, the Partnership's results of
operations are influenced by and reflect the same factors that influence the
financial results of Northern Border Pipeline.

SECOND QUARTER 2000 COMPARED WITH PERIOD MAY 28 TO JUNE 30, 1999

Equity income from the Partnership's investment in Northern Border Pipeline
increased $5.7 million to $8.8 million for the three months ended June 30,
2000, compared to equity income of $3.1 million for the period from May 28 to
June 30, 1999. The increase in equity income reflects a full three months of
activity in the second quarter of 2000, compared to approximately one month
of activity in the second quarter of 1999. (TC PipeLines acquired its 30%
general partner interest in Northern Border Pipeline on May 28, 1999). In
addition, equity income is higher due to income earned from third-party usage
of capacity on Northern Border Pipeline's microwave system. This is partially
offset by a decrease in equity income due to a decline in Northern Border
Pipeline's rate base in 2000 compared to 1999.

TC PipeLines reported general and administrative expense of $0.3 million for
the three months ended June 30, 2000 compared to $0.1 million for the period
from May 28 to June 30, 1999. The Partnership began operations on May 28,
1999 and therefore, was only in operation for approximately one month in the
second quarter of 1999.

SIX MONTHS ENDED JUNE 30, 2000 COMPARED WITH PERIOD MAY 28 TO JUNE 30, 1999

Equity income from the Partnership's investment in Northern Border Pipeline
was $17.4 million for the first half of 2000, compared to $3.1 million for
the period from May 28 to June 30, 1999. The $14.3 million increase in equity
income reflects a full six months of activity in the first half of 2000
compared to approximately one month of activity in the first half of 1999.
(TC PipeLines acquired its 30% general partner interest in Northern Border
Pipeline on May 28, 1999.) In addition, equity income is higher due to income
earned from third-party usage of capacity on Northern Border Pipeline's
microwave system. This is partially offset by a decrease in equity income due
to a decline in Northern Border Pipeline's rate base in 2000 compared to 1999.

TC PipeLines incurred general and administrative expense of $0.6 million for
the first half of 2000, compared to $0.1 million for the period from May 28
to June 30, 1999. The Partnership began operations on May 28, 1999 and
therefore, was only in operation for approximately one month in the first
half of 1999.


                                       9
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


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;

     -    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.

SECOND QUARTER 2000

On May 15, 2000, TC PipeLines paid a cash distribution of $0.45 per unit for the
three months ended March 31, 2000 to unitholders of record as of April 28, 2000.
This cash distribution, totaling $8.0 million, was paid out in the following
manner: $6.6 million to common unitholders, $1.2 million to the general partner
as holder of the subordinated units, and $0.2 million to the general partner in
respect of its 2% general partner interest.

The Partnership funded this cash distribution with the $10.0 million cash
distribution it received from Northern Border Pipeline on May 2, 2000. The
distribution from Northern Border Pipeline related to the first quarter ended
March 31, 2000 and was calculated and paid in accordance with Northern Border
Pipeline's cash distribution policy.

On July 19, 2000, the board of directors of the general partner declared a cash
distribution of $0.45 per unit for the three months ended June 30, 2000, which
is payable on August 14, 2000 to unitholders of record as of July 31, 2000. This
will amount to a cash distribution totaling $8.0 million, which will be paid out
in the following manner: $6.6 million to common unitholders, $1.2 million to the
general partner as holder of the subordinated units, and $0.2 million to the
general partner in respect of its 2% general partner interest.

The Partnership will fund this cash distribution with the $10.2 million cash
distribution it received from Northern Border Pipeline on August 2, 2000. The
distribution from Northern Border Pipeline related to the second quarter ended
June 30, 2000 and was calculated and paid in accordance with Northern Border
Pipeline's cash distribution policy.


                                       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


CREDIT FACILITY

On May 28, 1999, the Partnership entered into a $40 million unsecured two-year
revolving credit facility with TransCanada PipeLine USA Ltd., an affiliate of
the general partner. The credit facility bears interest at a London Interbank
Offered Rate plus 1.25%. The purpose of the revolving credit facility is to
provide borrowings to fund capital expenditures, to fund capital contributions
to Northern Border Pipeline and for working capital and other general business
purposes, including funding cash distributions to partners, if necessary. At
June 30, 2000, the Partnership had no amount outstanding under this credit
facility.

CAPITAL REQUIREMENTS

TC PipeLines plans to finance the proposed acquisition of a 49% interest in
Tuscarora with a combination of cash on hand and third party debt as
described under the heading "Recent Developments - Acquisition." To the
extent TC PipeLines has any capital requirements with respect to its
investment in Northern Border Pipeline or makes further acquisitions in 2000,
TC PipeLines expects to finance these requirements with debt and/or equity.

RESULTS OF OPERATIONS OF NORTHERN BORDER PIPELINE COMPANY

The following sets out summarized financial information for Northern Border
Pipeline for the three and six months ended June 30, 2000 and 1999 and as at
June 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   Six months ended
                                                            June 30,          June 30,
(UNAUDITED)                                      -------------------------------------
(MILLIONS OF DOLLARS)                             2000      1999       2000       1999
--------------------------------------------------------------------------------------
<S>                                              <C>       <C>        <C>        <C>
NORTHERN BORDER PIPELINE INCOME STATEMENT
Revenues                                          77.3      73.0      153.6      146.7
Costs and expenses                               (18.5)    (16.3)     (35.3)     (32.9)
Depreciation                                     (14.5)    (12.9)     (29.4)     (25.7)
Financial charges and other                      (14.9)    (14.8)     (30.8)     (28.8)
                                                  ----      ----      -----      -----
Net income                                        29.4      29.0       58.1       59.3
                                                  ----      ----      -----      -----
                                                  ----      ----      -----      -----
</TABLE>

                                       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

<TABLE>
<CAPTION>
                                            June 30, 2000      December 31,
(MILLIONS OF DOLLARS)                         (unaudited)              1999
---------------------------------------------------------------------------
<S>                                               <C>               <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
Cash and cash equivalents                            36.2              17.3
Other current assets                                 36.8              33.8
Plant, property and equipment, net                1,702.7           1,731.4
Other assets                                         13.8              14.2
Current liabilities                                (126.4)           (116.7)
Reserves and deferred credits                       (10.5)            (10.7)
Long-term debt                                     (823.9)           (834.5)
                                                  -------           -------
Partners' capital                                   828.7             834.8
                                                  -------           -------
                                                  -------           -------
</TABLE>

Northern Border Pipeline's revenue is derived from agreements with various
shippers for the transportation of natural gas. Northern Border Pipeline
transports gas under a FERC regulated tariff that provides 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.

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. In June 2000, Northern Border Pipeline
reached an agreement in principle with a majority of its customers and the
FERC staff to settle the issues in the rate case. Terms of the settlement are
confidential until a stipulation and agreement is finalized by the parties
and filed with the FERC for approval. For the three month and six month
periods ending June 30, 2000, respectively, Northern Border Pipeline recorded
a $6.7 million and $13.5 million provision for rate refunds, which reflects
the anticipated refund obligation to its customers. The provision for rate
refunds is netted against operating revenues on the statement of income.
While the parties in the rate case are meeting to finalize the stipulation
and agreement, TC PipeLines can give no assurance whether it will be filed
and subsequently approved by the FERC.


                                       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 QUARTER 2000 COMPARED WITH SECOND QUARTER 1999

Operating revenues, net increased $4.3 million (6%) for the second quarter of
2000, as compared to the same period in 1999, due primarily to recovery of
increased operations and maintenance expense, depreciation and amortization
expense and interest expense.

Costs and expenses consist of operations and maintenance expenses and taxes
other than income.

Operations and maintenance expense increased $1.9 million (21%) for the
second quarter of 2000, as compared to the same period in 1999, due primarily
to expenses incurred in connection with Northern Border Pipeline's pending
rate case as well as increased administrative expenses for the pipeline.

Depreciation and amortization expense increased $1.6 million (13%) for the
second quarter of 2000, as compared to the same period in 1999, due primarily
to an increase in the depreciation rate applied to transmission plant from
2.0% to 2.3%. The increase in the depreciation rate was approved as part of a
previous rate case settlement.

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

Interest expense increased $1.8 million (13%) for the second 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 $1.8 million for the second quarter of 2000, as
compared to the same period in 1999, due primarily to income earned from
third-party usage of capacity on Northern Border Pipeline's microwave system.

SIX MONTHS JUNE 30, 2000 COMPARED WITH SIX MONTHS JUNE 30, 1999

Operating revenues, net increased $6.9 million (5%) for the first half of
2000, as compared to the same period in 1999, due primarily to recovery of
increased operations and maintenance expense, depreciation and amortization
expense and interest expense.

Costs and expenses consist of operations and maintenance expenses and taxes
other than income.

Operations and maintenance expense increased $1.9 million (10%) for the first
half of 2000, as compared to the same period in 1999, due primarily to
expenses incurred in connection with Northern Border Pipeline's pending rate
case as well as increased administrative expenses for the pipeline.

Depreciation and amortization expense increased $3.7 million (14%) for the
first half of 2000, as compared to the same period in 1999, due primarily to
an increase in the depreciation rate applied to transmission plant from 2.0%
to 2.3%. The increase in the depreciation rate was approved as part of a
previous rate case settlement.


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<PAGE>


                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


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

Interest expense increased $3.7 million (13%) for the first half 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 $1.7 million for the first half of 2000, as compared
to the same period in 1999, due primarily to 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.

In June 1997, Northern Border Pipeline entered into a credit agreement
(Pipeline Credit Agreement) with certain financial institutions. The Pipeline
Credit Agreement is comprised of a term loan and a $200 million five-year
revolving credit facility, both maturing in June 2002. At June 30, 2000,
$429.0 million was outstanding under the term loan. No funds were outstanding
under the revolving credit facility.

At June 30, 2000, Northern Border Pipeline also had outstanding $250 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 mature in August 2000.
Northern Border Pipeline anticipates borrowing on the revolving credit
facility to repay the Series A Notes.

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 $14.0 million to $97.3
million for the first half of 2000, as compared to the same period in 1999,
primarily due to recovery of increased depreciation and amortization expense
and the billings collected subject to refund related to Northern Border
Pipeline's current rate proceeding.


                                       14
<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 INVESTING ACTIVITIES

Capital expenditures of $3.8 million for the first half of 2000 included $2.3
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. The capital expenditures for Project 2000 are
estimated to be approximately $94 million. For the comparable period in 1999,
capital expenditures were $77.0 million and included $70.4 for The Chicago
Project, which was Northern Border Pipeline's expansion and extension project
placed in service in December 1998. 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 $21 million,
including $10 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.

CASH FLOWS FROM FINANCING ACTIVITIES

Cash flows used in financing activities were $74.6 million for the first half
of 2000, as compared to $17.8 million for the same period in 1999.
Distributions paid to the general partners decreased $3.5 million to $64.3
million for the first half of 2000 as compared to the same period of 1999.
The distribution for 1999 included seven months' activity, rather than six
months, resulting from a change in the timing of distribution payments.
Borrowings under the Pipeline Credit Agreement decreased $50 million for the
first half of 2000 as compared to the same period in 1999. Borrowings in 1999
were used to finance a portion of the capital expenditures for The Chicago
Project. Repayments on the Pipeline Credit Agreement increased $10.0 million
for the first half of 2000 as compared to the same period in 1999.

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: TC PipeLines, LP's success in completing the acquisition of a 49%
interest in Tuscarora Gas Transmission Company, regulatory decisions,
particularly those of the FERC, including Northern Border Pipeline's efforts
to finalize settlement of its current rate case; future demand for natural
gas; cost of acquisitions, including related debt service payments; tariff
and transportation charges to be collected by Northern Border Pipeline for
transportation services on the Northern Border pipeline system; overcapacity
in the industry; and prevailing economic conditions, particularly conditions
of the capital and equity markets. TC PipeLines, LP cannot give any assurance
that the Partnership will be able to complete the proposed Tuscarora
acquisition or any other future acquisitions on economically and
operationally acceptable terms and that any future acquisitions will not be
dilutive to earnings and operating surplus.


                                       15
<PAGE>


                    PART I. FINANCIAL INFORMATION (CONCLUDED)

       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                                TC PIPELINES, LP


For the three and six months ended June 30, 2000 and the period May 28 to June
30, 1999, TC PipeLines, LP has not entered into any forms of financial
instruments that are market risk sensitive, either for trading or non-trading
purposes. Therefore, TC PipeLines, LP is not exposed to any interest rate risk,
market price risk, or foreign exchange risk, except to the extent that its 30%
general partner interest in Northern Border Pipeline exposes the Partnership to
the market risks disclosed below.

Northern Border Pipeline's interest rate exposure results from the portion of
its debt portfolio that is 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. Since December 31, 1999, there has not
been any material change in Northern Border Pipeline's interest rate exposure.


                                       16

<PAGE>


                           PART II. OTHER INFORMATION

                    ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                                TC PIPELINES, LP


(a)  Exhibits.

     None.

(b)  Reports on Form 8-K

     None.


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<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:  August 11, 2000                        Theresa Jang
                                              Controller


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