<Page>

              UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549

                                 FORM 10-Q

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

                For the quarterly period ended SEPTEMBER 30, 2003

                                    OR

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

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

             Delaware                                    52-2135448
  ----------------------------------                ----------------------
    (State or other jurisdiction                      (I.R.S. Employer
  of incorporation 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 reports), and (2) has been subject to
such filing requirements for the past 90 days.

Yes [X]    No [ ]

     Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).

Yes [X]    No [ ]

     As of November 13, 2003 there were 16,563,564 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,
                  2003 and 2002                                                                      3
                  Statement of Comprehensive Income - Three and nine months ended
                  September 30, 2003 and 2002                                                        3
                  Balance Sheet - September 30, 2003 and December 31, 2002                           4
                  Statement of Cash Flows - Nine months ended September 30, 2003 and 2002            4
                  Notes to Condensed Financial Statements                                            5

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

                  Results of Operations of TC PipeLines, LP                                         11
                  Liquidity and Capital Resources of TC PipeLines, LP                               15
                  Results of Operations of Northern Border Pipeline Company                         17
                  Liquidity and Capital Resources of Northern Border Pipeline Company               21
                  Results of Operations of Tuscarora Gas Transmission Company                       26
                  Liquidity and Capital Resources of Tuscarora Gas Transmission Company             28

         ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk                        31

         ITEM 4.  Controls and Procedures                                                           32

PART II. OTHER INFORMATION

         ITEM 5.  Other Information                                                                 33

         ITEM 6.  Exhibits and Reports on Form 8-K                                                  34
</Table>


                                       2
<Page>

                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                                TC PIPELINES, LP

                               STATEMENT OF INCOME

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)                 2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
Equity Income from Investment in Northern Border Pipeline       11.2         11.8              33.5         34.6
Equity Income from Investment in Tuscarora                       1.3          1.2               3.8          3.3
General and Administrative Expenses                             (0.5)        (0.4)             (1.3)        (1.1)
Financial Charges                                                -           (0.1)             (0.1)        (0.2)
                                                               -------------------------------------------------
Net Income                                                      12.0         12.5              35.9         36.6
                                                               -------------------------------------------------
                                                               -------------------------------------------------

NET INCOME ALLOCATION
Common units                                                    10.8         10.5              31.4         30.0
Subordinated units                                               0.6          1.5               3.1          5.2
General partner                                                  0.6          0.5               1.4          1.4
                                                               -------------------------------------------------
                                                                12.0         12.5              35.9         36.6
                                                               -------------------------------------------------
                                                               -------------------------------------------------

Net Income per Unit                                            $0.65        $0.68             $1.97        $2.01
                                                               -------------------------------------------------
                                                               -------------------------------------------------

Units Outstanding (millions)                                    17.5         17.5              17.5         17.5
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>

                      STATEMENT OF COMPREHENSIVE INCOME

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS)                                          2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
Net Income                                                      12.0         12.5              35.9         36.6
Other Comprehensive Income
  Change associated with current period hedging
    transactions                                                (0.1)        (0.1)             (0.4)        (0.8)
                                                               -------------------------------------------------
Total Comprehensive Income                                      11.9         12.4              35.5         35.8
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>

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>
(MILLIONS OF DOLLARS)                                                       SEPTEMBER 30, 2003    December 31, 2002
-------------------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)           (AUDITED)
<S>                                                                         <C>                   <C>
ASSETS
Current Assets
  Cash                                                                                     4.2                  6.4

Investment in Northern Border Pipeline                                                   242.1                242.9
Investment in Tuscarora                                                                   39.9                 36.7
                                                                            ---------------------------------------
                                                                                         286.2                286.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------

LIABILITIES AND PARTNERS' EQUITY
Current Liabilities
  Accounts payable                                                                         0.6                  0.6
  Current portion of long-term debt                                                        5.5                  -
                                                                            ---------------------------------------
                                                                                           6.1                  0.6

Long-Term Debt                                                                             -                   11.5

Partners' Equity
  Common units                                                                           245.0                238.9
  Subordinated units                                                                      27.2                 27.0
  General partner                                                                          6.2                  5.9
  Other comprehensive income                                                               1.7                  2.1
                                                                            ---------------------------------------
                                                                                         280.1                273.9
                                                                            ---------------------------------------
                                                                                         286.2                286.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>


                                         STATEMENT OF CASH FLOWS

<Table>
<Caption>
                                                                                 NINE MONTHS ENDED SEPTEMBER 30
(UNAUDITED)                                                                 ---------------------------------------
(MILLIONS OF DOLLARS)                                                                  2003                 2002
-------------------------------------------------------------------------------------------------------------------
<S>                                                                         <C>                   <C>
CASH GENERATED FROM OPERATIONS
Net income                                                                                 35.9                36.6
Add:
Distributions received in excess of equity income                                           1.3                 2.0
                                                                            ---------------------------------------
                                                                                           37.2                38.6
                                                                            ---------------------------------------
INVESTING ACTIVITIES
Investment in Tuscarora                                                                    (4.1)               (4.5)
                                                                            ---------------------------------------

FINANCING ACTIVITIES
Distributions paid                                                                        (29.3)              (27.7)
Reduction of long-term debt                                                                (6.0)              (10.0)
                                                                            ---------------------------------------
                                                                                          (35.3)              (37.7)
                                                                            ---------------------------------------

DECREASE IN CASH                                                                           (2.2)               (3.6)
CASH, BEGINNING OF PERIOD                                                                   6.4                 9.2
                                                                            ---------------------------------------
CASH, END OF PERIOD                                                                         4.2                 5.6
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>

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, and its subsidiary limited partnerships, TC PipeLines
Intermediate Limited Partnership and TC Tuscarora Intermediate Limited
Partnership, all Delaware limited partnerships, are collectively referred to
herein as TC PipeLines or the Partnership. The Partnership commenced
operations on May 28, 1999.

     The financial statements have been prepared by management in accordance
with accounting principles generally accepted in the United States. Other
comprehensive income recorded by TC PipeLines arises through its equity
investments in Northern Border Pipeline Company (Northern Border Pipeline)
and Tuscarora Gas Transmission Company (Tuscarora) and relates to cash flow
hedges transacted by Northern Border Pipeline and Tuscarora. 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 of normal recurring
accruals) necessary to present fairly the results of operations for the three
and nine months ended September 30, 2003 and 2002, the financial position as
at September 30, 2003 and December 31, 2002 and cash flows for the nine
months ended September 30, 2003 and 2002.

     The results of operations for the three and nine months ended September
30, 2003 and 2002 are not necessarily indicative of the results that may be
expected for a full fiscal year. The interim financial statements should be
read in conjunction with the Partnership's financial statements and notes
included in TC PipeLines' Annual Report on Form 10-K for the year ended
December 31, 2002.

NOTE 2   INVESTMENT IN NORTHERN BORDER PIPELINE COMPANY

The Partnership owns a 30% general partner interest in Northern Border
Pipeline, a partnership which owns a 1,249-mile United States interstate
pipeline system that transports natural gas from the Montana-Saskatchewan
border to markets in the midwestern United States. The remaining 70%
partnership interest in Northern Border Pipeline is held by Northern Border
Partners, L.P., a publicly traded limited partnership. The 2% general
partnership interest in Northern Border Partners, L.P. is controlled by
affiliates of Enron Corp. (Enron), which hold a 1.65% general partner
interest, and TransCanada Corporation (TransCanada), parent of TC PipeLines'
general partner (General Partner), which holds the remaining 0.35% general
partner interest. The Northern Border pipeline system is operated by Northern
Plains Natural Gas Company, a wholly owned subsidiary of Enron. Northern
Border Pipeline is regulated by the Federal Energy Regulatory Commission
(FERC).

     TC PipeLines uses the equity method of accounting for its investment in
Northern Border Pipeline. TC PipeLines' equity income for the three and nine
months ended September 30, 2003 and 2002 represents 30% of the net income of
Northern Border Pipeline for the same periods. Retained earnings of TC
PipeLines at September 30, 2003 and December 31, 2002 include undistributed
earnings from Northern Border Pipeline of $0.5 million and $1.3 million,
respectively. The following sets out summarized financial information
representing 100% of the operations of Northern Border Pipeline for the three
and nine months ended September 30, 2003 and 2002 and as at September 30,
2003 and December 31, 2002.


                                       5
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                     ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS)                                          2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
NORTHERN BORDER PIPELINE INCOME STATEMENT
Revenues                                                        81.2         81.6             241.7        239.9
Costs and expenses                                             (18.7)       (15.2)            (52.8)       (42.6)
Depreciation                                                   (14.4)       (14.5)            (43.3)       (43.5)
Financial charges                                              (11.0)       (13.2)            (34.4)       (39.9)
Other income                                                     0.1          0.5               0.4          1.5
                                                               -------------------------------------------------
Net income                                                      37.2         39.2             111.6        115.4
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>

Northern Border Pipeline has recorded other comprehensive income of $(0.4)
million for each of the three month periods ended September 30, 2003 and
2002, and $(1.2) million and $(2.1) million for the nine months ended
September 30, 2003 and 2002, respectively.

<Table>
<Caption>
(MILLIONS OF DOLLARS)                                                       SEPTEMBER 30, 2003    December 31, 2002
-------------------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)           (AUDITED)
<S>                                                                         <C>                   <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
ASSETS
Cash and cash equivalents                                                            17.0                 25.4
Other current assets                                                                 36.5                 40.8
Plant, property and equipment, net                                                1,596.4              1,636.0
Other assets                                                                         34.2                 37.8
                                                                            ---------------------------------------
                                                                                  1,684.1              1,740.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------
LIABILITIES AND PARTNERS' EQUITY
Current liabilities                                                                  52.2                130.9
Reserves and deferred credits                                                         6.0                 15.4
Long-term debt, net of current maturities                                           818.8                783.9
Partners' Equity
  Partners' capital                                                                 801.5                803.0
  Accumulated other comprehensive income                                              5.6                  6.8
                                                                            ---------------------------------------
                                                                                  1,684.1              1,740.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>

NOTE 3   INVESTMENT IN TUSCARORA GAS TRANSMISSION COMPANY

The Partnership owns a 49% general partner interest in Tuscarora, a partnership
that owns a 240-mile United States interstate pipeline system that transports
natural gas from Oregon, where it interconnects with facilities of Gas
Transmission Northwest Corporation, to northern Nevada. The remaining general
partner interest in Tuscarora is held 50% by Sierra Pacific Resources and 1% by
TransCanada. The Tuscarora pipeline system is operated by Tuscarora Gas
Operating Company, a wholly owned subsidiary of Sierra Pacific Resources. Sierra
Pacific Power Company, a subsidiary of Sierra Pacific Resources, is Tuscarora's
largest shipper, accounting for approximately 68% of Tuscarora's available
capacity. Tuscarora is regulated by the FERC.

     The Partnership uses the equity method of accounting for its investment
in Tuscarora. TC PipeLines' equity income for the three and nine months ended
September 30, 2003 and 2002 represents 49% of the net income of


                                       6
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                     ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

Tuscarora for the same periods. Retained earnings of TC PipeLines at
September 30, 2003 and December 31, 2002 include undistributed earnings from
Tuscarora of nil and $0.8 million, respectively. The following sets out
summarized financial information representing 100% of the operations of
Tuscarora for the three and nine months ended September 30, 2003 and 2002 and
as at September 30, 2003 and December 31, 2002.

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS)                                          2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
TUSCARORA INCOME STATEMENT
Revenues                                                        7.3          5.6              22.0         16.8
Costs and expenses                                             (1.3)        (0.6)             (3.8)        (1.9)
Depreciation                                                   (1.6)        (1.2)             (4.8)        (3.6)
Financial charges                                              (1.6)        (1.3)             (4.9)        (4.3)
Other income                                                    -            0.2                -           0.5
                                                               -------------------------------------------------
Net income                                                      2.8          2.7               8.5          7.5
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>

Tuscarora has recorded other comprehensive income of less than $(0.1) million
for each of the three month periods ended September 30, 2003 and September 30,
2002, and less than $(0.1) million and $(0.4) million for the nine months ended
September 30, 2003 and 2002, respectively.

<Table>
<Caption>
(MILLIONS OF DOLLARS)                                                       SEPTEMBER 30, 2003    December 31, 2002
-------------------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)           (AUDITED)
<S>                                                                         <C>                   <C>
TUSCARORA BALANCE SHEET
ASSETS
Cash and cash equivalents                                                            4.8                   0.6
Other current assets                                                                 2.6                   4.3
Plant, property and equipment, net                                                 144.5                 148.4
Other assets                                                                         0.9                   1.2
                                                                            ---------------------------------------
                                                                                   152.8                 154.5
                                                                            ---------------------------------------
                                                                            ---------------------------------------

LIABILITIES AND PARTNERS' EQUITY
Current liabilities                                                                  7.9                  14.6
Long-term debt                                                                      83.1                  85.3
Partners' Equity
  Partners' capital                                                                 61.8                  54.2
  Accumulated other comprehensive income                                             -                     0.4
                                                                            ---------------------------------------
                                                                                   152.8                 154.5
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>

NOTE 4   CREDIT FACILITIES AND LONG-TERM DEBT

On September 30, 2002, the Partnership renewed its unsecured credit facility
(Revolving Credit Facility) with Bank One, NA, as administrative agent. Under
the Revolving Credit Facility, the Partnership may borrow up to an aggregate
principal amount of $20.0 million. Loans under the Revolving Credit Facility
bear interest at a floating rate. The Revolving Credit Facility matures on
July 31, 2004. Amounts borrowed may be repaid in part or in full prior to
that time without penalty. The Revolving Credit Facility


                                       7
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                     ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

may be used to finance capital expenditures and for other general business
purposes. At September 30, 2003 and December 31, 2002, the Partnership had
borrowings of $5.5 million and $11.5 million, respectively, outstanding under
the Revolving Credit Facility. The fair value of the Revolving Credit
Facility approximates its carrying value because the interest rate is a
floating rate. The interest rate on the Revolving Credit Facility averaged
2.4% and 2.9% for the three months ended September 30, 2003 and 2002,
respectively; 2.6% and 2.8% for the nine months ended September 30, 2003 and
2002, respectively; and was 2.4% and 2.7% at September 30, 2003 and December
31, 2002, respectively.

     On May 28, 2003, the Partnership renewed its $40.0 million unsecured
two-year revolving credit facility (TransCanada Credit Facility) with
TransCanada PipeLine USA Ltd., an affiliate of the General Partner. The
TransCanada Credit Facility bears interest at London Interbank Offered Rate
plus 1.25%. The purpose of the TransCanada Credit Facility is to provide
borrowings to fund capital expenditures, to fund capital contributions to
Northern Border Pipeline, Tuscarora, and any other entity in which the
Partnership directly or indirectly acquires an interest, to fund working
capital and for other general business purposes, including temporary funding
of cash distributions to unitholders and the General Partner, if necessary.
At September 30, 2003 and December 31, 2002 the Partnership had no amount
outstanding under the TransCanada 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 weighted average number of common
and subordinated units outstanding. The General Partner's allocation is equal
to an amount based upon the General Partner's 2% interest, adjusted to
reflect an amount equal to incentive distributions. Net income per unit was
determined as follows:

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS, EXCEPT PER UNIT AMOUNTS)                 2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
Net income                                                      12.0         12.5              35.9         36.6
                                                               -------------------------------------------------
Net income allocated to General Partner
  General Partner interest                                      (0.3)        (0.2)             (0.7)        (0.7)
  Incentive distribution income allocation                      (0.3)        (0.3)             (0.7)        (0.7)
                                                               -------------------------------------------------
                                                                (0.6)        (0.5)             (1.4)        (1.4)
                                                               -------------------------------------------------
Net income allocable to units                                   11.4         12.0              34.5         35.2
Weighted average units outstanding (MILLIONS)                   17.5         17.5              17.5         17.5
                                                               -------------------------------------------------
Basic and diluted net income per unit                          $0.65        $0.68             $1.97        $2.01
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>


                                      8
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONCLUDED)

                                TC PIPELINES, LP

NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 6   SUBORDINATED UNIT CONVERSION

On August 1, 2003, 936,435 subordinated units, representing one-half of the
outstanding subordinated units held by the General Partner, upon satisfaction
of the financial tests set forth in the partnership agreement, automatically
converted into an equal number of common units as provided for in the
partnership agreement of TC PipeLines.

     After the early conversion of 936,435 subordinated units on August 1,
2002, this early conversion of an additional 936,435 subordinated units
reduces the number of outstanding subordinated units to 936,436, which will,
upon satisfaction of the financial tests, automatically convert into common
units on the first day after the record date for distributions for the
quarter ending June 30, 2004.


NOTE 7   DISTRIBUTIONS

On October 21, 2003, the Board of Directors of the General Partner declared a
cash distribution of $0.55 per unit for the three months ended September 30,
2003. The distribution totaling approximately $10.1 million is payable on
November 14, 2003 in the following manner: $9.1 million to the holders of
common units as of the close of business on October 31, 2003, $0.5 million to
the General Partner as holder of the subordinated units, $0.3 million to the
General Partner as holder of incentive distribution rights, and $0.2 million
to the General Partner in respect of its 2% general partner interest.

NOTE 8   ACCOUNTING PRONOUNCEMENTS

SFAS No. 143, "Accounting for Asset Retirement Obligations," became effective
for the Partnership on January 1, 2003. As the Partnership does not directly
own any long-lived assets, no asset retirement obligation has been recorded
on its balance sheet.

SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities" amends and clarifies accounting for derivative
instruments and for hedging activities under SFAS No. 133. As at September
30, 2003, TC PipeLines does not engage in any hedging activities and is not
affected by the changes resulting from this standard.


                                       9
<Page>

                     PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This quarterly report includes forward-looking statements regarding future
events and the future financial performance of TC PipeLines, LP. All
forward-looking statements are based on the Partnership's beliefs as well as
assumptions made by and information currently available to the Partnership.
Words such as "anticipates", "believes", "estimates", "expects", "plans",
"intends", "forecasts", and similar expressions, identify forward-looking
statements within the meaning of the Private Securities Litigation Reform
Act. These statements reflect the Partnership's current views with respect to
future events and are subject to various risks, uncertainties and assumptions
including:

     o   regulatory decisions, particularly those of the Federal Energy
         Regulatory Commission (FERC);

     o   majority control and operation of Northern Border Pipeline Company by
         affiliates of Enron Corp., and as a result, any further developments
         in the Enron bankruptcy proceedings, Enron's intention to create a new
         pipeline operating company, and bankruptcy-related regulatory issues,
         including the potential denial by the Securities and Exchange
         Commission (SEC) of Enron's application for exemption from the Public
         Utility Holding Company Act and any impact of such denial on Northern
         Border Pipeline Company and the Partnership;

     o   the failure of a shipper on either one of the Partnership's pipelines
         to perform its contractual obligations;

     o   the ability of affiliates of Sierra Pacific Resources to continue
         to meet their contractual obligations to Tuscarora Gas Transmission
         Company;

     o   the ability of Northern Border Pipeline Company to recontract its
         capacity;

     o   the ownership of Tuscarora by affiliates of Sierra Pacific Resources
         and affiliates of the Partnership at a percentage of 50% each and the
         resulting ability of each partner to veto any decisions of the
         Tuscarora management committee;

     o   cost and availability of acquisitions;

     o   future demand for natural gas;

     o   overcapacity in the industry;

     o   conflicts of interest between TransCanada, the owner of the
         Partnership's general partner, on the one hand, and the Partnership,
         on the other hand; and

     o   prevailing economic conditions, particularly conditions of the capital
         and equity markets;


                                       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

and other risks discussed in the Partnership's filings with the SEC,
including the Partnership's Annual Report on Form 10-K for the year ended
December 31, 2002. If one or more of these risks or uncertainties
materialize, or if the underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking statements.

RESULTS OF OPERATIONS OF TC PIPELINES, LP

TC PipeLines, LP was formed in 1998 to acquire, own and participate in the
management of United States based pipeline assets. TC PipeLines, LP, and its
subsidiary limited partnerships, TC PipeLines Intermediate Limited
Partnership and TC Tuscarora Intermediate Limited Partnership, all Delaware
limited partnerships, are collectively referred to herein as TC PipeLines or
the Partnership. TC PipeLines GP, Inc., a wholly owned subsidiary of
TransCanada, is the general partner of the Partnership. The Partnership owns
a 30% general partner interest in Northern Border Pipeline and a 49% general
partner interest in Tuscarora.

INVESTMENT IN NORTHERN BORDER PIPELINE COMPANY

Northern Border Pipeline owns a 1,249-mile United States interstate pipeline
system that transports natural gas from the Montana-Saskatchewan border to
markets in the midwestern United States. The Partnership acquired its 30%
interest in Northern Border Pipeline from affiliates of its General Partner.
The Partnership has one member and 30% of the voting power of the Northern
Border Pipeline management committee.

The remaining 70% general partner interest in Northern Border Pipeline is
held by Northern Border Partners, L.P., a publicly traded limited
partnership. The general partners of Northern Border Partners are Northern
Plains Natural Gas Company and Pan Border Gas Company, both Enron affiliates,
and Northwest Border Pipeline Company, a subsidiary of TransCanada.
TransCanada has one member and 12.25% of the voting power on the Northern
Border Pipeline management committee. TransCanada and TC PipeLines
collectively have two members and an aggregate 42.25% of the voting power of
the Northern Border Pipeline management committee. Northern Plains and Pan
Border collectively have two members and 57.75% of the voting power of the
Northern Border Pipeline management committee. Northern Plains also serves as
the operator of the Northern Border pipeline system.

INVESTMENT IN TUSCARORA GAS TRANSMISSION COMPANY

Tuscarora owns a 240-mile United States interstate pipeline system that
transports natural gas from Oregon, where it interconnects with facilities of
Gas Transmission Northwest Corporation, to northern Nevada. The Partnership
owns a 49% general partner interest in Tuscarora. The remaining general
partner interest in Tuscarora is held 50% by Sierra Pacific Resources and 1%
by TCPL Tuscarora Ltd., an indirect subsidiary of TransCanada. Under the
Tuscarora partnership agreement, voting power of the management committee is
allocated among Tuscarora's three general partners in proportion to their
general partner interests in Tuscarora. The Tuscarora pipeline system is
operated by Tuscarora Gas Operating Company, a wholly owned subsidiary of
Sierra Pacific Resources. Sierra Pacific Power Company, a


                                       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

subsidiary of Sierra Pacific Resources, is Tuscarora's largest shipper,
accounting for approximately 68% of Tuscarora's available capacity.

On December 1, 2002, Tuscarora completed and placed into service an expansion
of its pipeline system. The expansion consisted of the addition of two
compressor stations, located along the Tuscarora mainline, as well as an
11-mile pipeline extension from Tuscarora's previous terminus near Reno,
Nevada to Wadsworth, Nevada. The expansion increased Tuscarora's capacity to
approximately 182 million cubic feet per day. The project had a capital
budget of $43.0 million but was completed at a capital cost of approximately
$39.0 million. The new capacity is contracted under long-term firm contracts
ranging from ten to fifteen years. Under the terms of these transportation
contracts, approximately 70% of the new contracted capacity came into effect
upon commencement of service. The remaining 30% of new contracted capacity
will come into effect by the end of 2003.

CRITICAL ACCOUNTING POLICY

TC PipeLines accounts for its investments in both Northern Border Pipeline
and Tuscarora using the equity method of accounting as detailed in notes two
and three to the condensed financial statements. The equity method of
accounting is appropriate where the investor does not control but is able to
exercise significant influence over the operating and financial policies of
an investee. TC PipeLines is able to exercise significant influence over its
investments in Northern Border Pipeline and Tuscarora as evidenced by its
representation on their respective management committees.

Since the interests in Northern Border Pipeline and Tuscarora are currently
the Partnership's only significant sources 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 and Tuscarora,
respectively.

THIRD QUARTER 2003 COMPARED WITH THIRD QUARTER 2002

Net income decreased $0.5 million, or 4%, to $12.0 million for third quarter
2003, compared to $12.5 million for the same period last year. Net income for
third quarter 2003 reflects a decrease in equity income from Northern Border
Pipeline, partially offset by an increase in equity income from Tuscarora.

Equity income from the Partnership's investment in Northern Border Pipeline
decreased $0.6 million, or 5%, to $11.2 million for third quarter 2003, compared
to $11.8 million for the same period last year. Northern Border Pipeline's
operations and maintenance expense was higher during third quarter 2003 compared
to the same period last year


                                       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

due primarily to higher electric power costs for certain compressor stations
(see "Results of Operations of Northern Border Pipeline Company"). Operations
and maintenance expense also includes an increase in employee benefits
expense at Northern Border Pipeline in third quarter 2003 as compared to the
same period last year. The effect of the higher operations and maintenance
expense at Northern Border Pipeline during third quarter 2003 is a $1.0
million decrease to the Partnership's equity income. The increase in Northern
Border Pipeline's operations and maintenance expense in third quarter 2003 as
compared to the same period last year was partially offset by reductions in
interest expense. The decrease in interest expense during third quarter 2003
was due primarily to lower average interest rates and lower average debt
balances outstanding, resulting in an increase of $0.6 million to the
Partnership's equity income. The remaining $0.2 million decrease in the
Partnership's equity income from Northern Border Pipeline is attributable to
decreases in revenues and other income.

Equity income from the Partnership's investment in Tuscarora increased $0.1
million, or 8%, to $1.3 million for third quarter 2003, compared to $1.2
million for the same period last year. Tuscarora's revenues increased
primarily due to new transportation contracts from the expansion, increasing
the Partnership's equity income from Tuscarora by $0.8 million. This increase
was mostly offset by increased operations and maintenance expense and
increased depreciation expense, both resulting from Tuscarora's expansion, as
well as increased interest expense. The combined effect of these increased
expenses reduced the Partnership's equity income from Tuscarora by $0.7
million.

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 2002

Net income decreased $0.7 million, or 2%, to $35.9 million for the first nine
months of 2003, compared to $36.6 million for the same period last year. Net
income for the first nine months of 2003 reflects a decrease in equity income
from Northern Border Pipeline, partially offset by an increase in equity
income from Tuscarora.

Equity income from the Partnership's investment in Northern Border Pipeline
decreased $1.1 million, or 3%, to $33.5 million for the first nine months of
2003, compared to $34.6 million for the same period last year. Northern
Border Pipeline's revenues for the first nine months of 2003 were higher than
the same period last year, as the first nine months of 2002 reflects
uncollected revenues associated with the transportation capacity previously
held by Enron North America (the impact on TC PipeLines' equity income was
$0.5 million). Also, Northern Border Pipeline's interest expense was lower
during the first nine months of 2003 compared to the same period last year
due


                                       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

primarily to lower average interest rates and lower average debt balances
outstanding, resulting in an increase of $1.7 million to the Partnership's
equity income. These increases to the Partnership's equity income were more
than offset by the resulting impact of increases in Northern Border
Pipeline's operations and maintenance expense and taxes other than income as
well as a decrease in other income. The increase in 2003 operations and
maintenance expense is primarily due to higher electric power costs for
certain compressor stations (see "Results of Operations of Northern Border
Pipeline Company") as compared to the same period last year. Operations and
maintenance expense also includes an increase in employee benefits expense
for Northern Border Pipeline in the first nine months of 2003 as compared to
the same period last year. The increase in 2003 taxes other than income is
due primarily to adjustments to ad valorem taxes. Northern Border Pipeline
periodically reviews and adjusts its estimates of ad valorem taxes.
Reductions to previous estimates in 2002 exceeded reductions to previous
estimates in 2003. In addition, Northern Border Pipeline received a refund of
use taxes during the first nine months of 2002, resulting in lower taxes
other than income when compared to the same period in 2003. The combined
effect of these increased expenses at Northern Border Pipeline during the
first nine months of 2003 is a $3.0 million decrease to the Partnership's
equity income. Other income was lower during the first nine months of 2003 as
compared to the same period last year. The 2003 amount includes interest
expense for refunds required by the order issued by the FERC on March 27,
2003 (see "Results of Operations of Northern Border Pipeline Company - Update
on Company Use Gas FERC Filing") whereas the 2002 amount includes income
primarily related to interest received on the refund of use taxes previously
discussed and income for previously vacated frequency bands. The resulting
impact on the Partnership was a $0.3 million reduction in equity income.

Equity income from the Partnership's investment in Tuscarora increased $0.5
million, or 15%, to $3.8 million for the first nine months of 2003, compared
to $3.3 million for the same period in 2002. Tuscarora's revenues increased
primarily due to new transportation contracts from the expansion, increasing
the Partnership's equity income from Tuscarora by $2.5 million. This increase
was partially offset by increased operations and maintenance expense and
increased depreciation expense, both resulting from Tuscarora's expansion, as
well as increased interest expense. The combined effect of these increases in
expenses reduced the Partnership's equity income from Tuscarora by $1.8
million. As well, a decrease in Tuscarora's other income resulted in a $0.2
million reduction in the Partnership's equity income.


                                       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

LIQUIDITY AND CAPITAL RESOURCES OF TC PIPELINES, LP

EARLY CONVERSION OF SUBORDINATED UNITS

On August 1, 2003, 936,435 subordinated units, representing one-half of the
outstanding subordinated units held by the General Partner, upon satisfaction
of the financial tests set forth in the partnership agreement, automatically
converted into an equal number of common units as provided for in the
partnership agreement of TC PipeLines.

After the early conversion of 936,435 subordinated units on August 1, 2002,
this early conversion of an additional 936,435 subordinated units reduces the
number of outstanding subordinated units to 936,436, which will, upon
satisfaction of the financial tests, automatically convert into common units
on the first day after the record date for distributions for the quarter
ending June 30, 2004.

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:

     o   First, 98% to the common units, pro rata, and 2% to the General
         Partner, until there is distributed for each outstanding common unit
         an amount equal to the minimum quarterly distribution for that quarter;

     o   Second, 98% to the common units, pro rata, and 2% to the General
         Partner, until there is 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;

     o   Third, 98% to the subordinated units, pro rata, and 2% to the General
         Partner, until there is distributed for each outstanding subordinated
         unit an amount equal to the minimum quarterly distribution for that
         quarter; and

     o   Thereafter, in a manner whereby the General Partner has rights
         (referred to as incentive distribution rights) to receive increasing
         percentages of excess quarterly cash distributions over specified cash
         distribution thresholds.

2003 THIRD QUARTER CASH DISTRIBUTION

On October 21, 2003, the Board of Directors of the General Partner declared the
Partnership's 2003 third quarter cash distribution in the amount of $0.55 per
unit. This distribution will be paid on November 14, 2003 to unitholders of
record as of October 31, 2003. The third quarter cash distribution, totaling
$10.1 million, will be paid in the following manner: $9.1 million to common
unitholders (including $1.5 million to an affiliate of TransCanada as holder of
2,800,000 common units and $1.0 million to the General Partner as holder of
1,872,870 common units), $0.5 million to the General Partner as holder of the
subordinated units, $0.3 million to the General Partner as holder of


                                       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

incentive distribution rights, and $0.2 million to the General Partner in
respect of its 2% general partner interest.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities decreased $1.4 million, or 4%, to
$37.2 million for the first nine months of 2003, compared to $38.6 million
for the same period last year. For the first nine months of 2003 and 2002,
the Partnership received cash distributions of $33.9 million and $36.7
million, respectively, from its equity investment in Northern Border
Pipeline. The Partnership also received cash distributions of $4.7 million
and $3.3 million from its equity investment in Tuscarora during the first
nine months of 2003 and 2002, respectively.

CASH FLOWS FROM INVESTING ACTIVITIES

In the first nine months of 2003, the Partnership made an equity contribution
of $4.9 million to Tuscarora related to Tuscarora's 2002 expansion project,
which was partially offset by a $0.8 million return of capital from Tuscarora.

CASH FLOWS FROM FINANCING ACTIVITIES

In the first nine months of 2003, the Partnership paid $29.3 million in cash
distributions: $25.0 million to common unitholders (including $4.5 million to
an affiliate of TransCanada as holder of 2,800,000 common units and $1.5
million to the General Partner as holder of 936,435 common units), $3.0
million to the General Partner as holder of the subordinated units, $0.8
million to the General Partner, as holder of incentive distribution rights,
and $0.5 million to the General Partner in respect of its 2% general partner
interest. This compares to cash distributions of $27.7 million, which were
paid by the Partnership in the first nine months of 2002.

On September 30, 2002, the Partnership renewed its unsecured credit facility
(Revolving Credit Facility) with Bank One, NA, as administrative agent. Under
the Revolving Credit Facility, the Partnership may borrow up to an aggregate
principal amount of $20.0 million. Loans under the Revolving Credit Facility
bear interest, at the option of the Partnership, at a one-, two-, three-, or
six-month London Interbank Offered Rate (LIBOR) plus 1.25% or at a floating
rate based on the higher of the federal funds effective rate plus 0.5% or the
prime rate. The Revolving Credit Facility matures on July 31, 2004. 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 business purposes. In the first nine months of 2003 the
Partnership made principal re-payments on the Revolving Credit Facility of
$6.0 million. At September 30, 2003 and November 13, 2003, the Partnership had
borrowings of $5.5 million outstanding under the Revolving Credit


                                       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

Facility. The interest rate on the Revolving Credit Facility averaged 2.4%
for the three months ended September 30, 2003, 2.6% for the nine months ended
September 30, 2003 and was 2.4% at September 30, 2003.

On May 28, 2003, the Partnership renewed its $40.0 million unsecured two-year
revolving credit facility (TransCanada Credit Facility) with TransCanada
PipeLine USA Ltd., an affiliate of the General Partner. The TransCanada
Credit Facility bears interest at LIBOR plus 1.25%. The purpose of the
TransCanada Credit Facility is to provide borrowings to fund capital
expenditures, to fund capital contributions to Northern Border Pipeline,
Tuscarora, and any other entity in which the Partnership directly or
indirectly acquires an interest, to fund working capital and for other
general business purposes, including temporary funding of cash distributions
to unitholders and the General Partner, if necessary. At September 30, 2003
and November 13, 2003, the Partnership had no amount outstanding under the
TransCanada 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 acquisitions
during the remainder of 2003, TC PipeLines expects to fund these requirements
with operating cash flows, debt and/or equity.

RESULTS OF OPERATIONS OF NORTHERN BORDER PIPELINE COMPANY

CRITICAL ACCOUNTING POLICIES

Certain amounts included in or affecting Northern Border Pipeline's Financial
Statements and related disclosures must be estimated, requiring it to make
certain assumptions with respect to values or conditions that cannot be known
with certainty at the time the financial statements are prepared. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates. Any effects on Northern Border Pipeline's business, financial
position or results of operations resulting from revisions to these estimates
are recorded in the period in which the facts that give rise to the revision
become known.

Certain of Northern Border Pipeline's accounting policies are of more
significance in its financial statement preparation process than others.
Northern Border Pipeline's accounting policies conform to Statement of
Financial Accounting Standards (SFAS) No. 71, "Accounting for the Effects of
Certain Types of Regulation." Accordingly, certain


                                       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

assets that result from the regulated ratemaking process are recorded that
would not be recorded under accounting principles generally accepted in the
United States of America for nonregulated entities. Northern Border Pipeline
continually assesses whether the future recovery of the regulatory assets is
probable by considering such factors as regulatory changes and the impact of
competition. If future recovery ceases to be probable, Northern Border
Pipeline would be required to write-off the regulatory assets at that time.
At September 30, 2003, Northern Border Pipeline has recorded regulatory
assets of $9.8 million, which are being recovered from its shippers over
varying periods of time.

Northern Border Pipeline's long-lived assets are stated at original cost.
Northern Border Pipeline must use estimates in determining the economic
useful lives of those assets. For utility property, no retirement gain or
loss is included in income except in the case of retirements or sales of
entire regulated operating units. The original cost of utility property
retired is charged to accumulated depreciation and amortization, net of
salvage and cost of removal.

Effective January 1, 2003, Northern Border Pipeline adopted SFAS No. 143,
"Accounting for Asset Retirement Obligations." Northern Border Pipeline has
advised that SFAS No. 143 did not have a material impact on its financial
position or results of operations. SFAS No. 143 requires entities to record
the fair value of a liability for an asset retirement obligation in the
period in which it is incurred, if the liability can be reasonably estimated.
Northern Border Pipeline has advised that it was unable to estimate and
record liabilities for its obligations that fall under the provisions of this
statement because it cannot reasonably estimate when such obligations would
be settled.

Northern Border Pipeline's accounting for financial instruments follows SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities" which
requires that every derivative instrument be recorded on the balance sheet as
either an asset or liability measured at its fair value. The statement
requires that changes in the derivative's fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivative's gains and losses to
offset related results on the hedged item in the income statement. At
September 30, 2003, Northern Border Pipeline's balance sheet reflects a
non-cash gain of approximately $19.0 million in derivative financial
instruments with a corresponding increase in long-term debt.

RESULTS OF OPERATIONS

The following sets out summarized financial information for Northern Border
Pipeline for the three and nine months ended September 30, 2003 and 2002 and
as at September 30, 2003 and December 31, 2002. Amounts discussed represent
100% of the operations of Northern Border Pipeline, in which the Partnership
has held a 30% interest since May 28, 1999.

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS)                                          2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
NORTHERN BORDER PIPELINE INCOME STATEMENT
Revenues                                                        81.2         81.6             241.7        239.9
Costs and expenses                                             (18.7)       (15.2)            (52.8)       (42.6)
Depreciation                                                   (14.4)       (14.5)            (43.3)       (43.5)
Financial charges                                              (11.0)       (13.2)            (34.4)       (39.9)
Other income                                                     0.1          0.5               0.4          1.5
                                                               -------------------------------------------------
Net income                                                      37.2         39.2             111.6        115.4
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>


                                       18
<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>
(MILLIONS OF DOLLARS)                                                       SEPTEMBER 30, 2003    December 31, 2002
-------------------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)           (AUDITED)
<S>                                                                         <C>                   <C>
NORTHERN BORDER PIPELINE BALANCE SHEET
ASSETS
Cash and cash equivalents                                                           17.0                  25.4
Other current assets                                                                36.5                  40.8
Plant, property and equipment, net                                               1,596.4               1,636.0
Other assets                                                                        34.2                  37.8
                                                                            ---------------------------------------
                                                                                 1,684.1               1,740.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------

LIABILITIES AND PARTNERS' EQUITY
Current liabilities                                                                 52.2                 130.9
Reserves and deferred credits                                                        6.0                  15.4
Long-term debt, net of current maturities                                          818.8                 783.9
Partners' Equity
  Partners' capital                                                                801.5                 803.0
  Accumulated other comprehensive income                                             5.6                   6.8
                                                                            ---------------------------------------
                                                                                 1,684.1               1,740.0
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>

UPDATE ON COMPANY USE GAS FERC FILING

In February 2003, Northern Border Pipeline filed to amend its FERC tariff to
clarify the definition of company use gas, which is gas supplied by its
shippers for its operations, by adding detailed language to the broad
categories that comprise company use gas. Northern Border Pipeline had
included in its collection of company use gas, quantities that were
equivalent to the cost of electric power at its electric-driven compressor
stations during the period of June 2001 through January 2003. On March 27,
2003, the FERC issued an order rejecting Northern Border Pipeline's proposed
tariff sheet revision and requiring refunds with interest within 90 days of
the order. The refunds with interest amounted to $10.3 million, which
Northern Border Pipeline paid to its shippers in May 2003.

THIRD QUARTER 2003 COMPARED WITH THIRD QUARTER 2002

Net income to partners decreased $2.0 million for the third quarter of 2003,
as compared to the same period in 2002. Northern Border Pipeline's net income
was reduced by higher operating expenses partially offset by reductions in
interest expense.

Operations and maintenance expenses, included in costs and expenses,
increased $3.5 million for the third quarter of 2003, as compared to the same
period in 2002, due primarily to the cost for electricity to power Northern
Border Pipeline's electric-driven compressors. Previously, Northern Border
Pipeline included in its collection of company-use gas quantities that were
equivalent to the cost of


                                       19
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

electric power. Operations and maintenance expenses also include an increase
in employee benefits expenses.

Interest expense decreased $2.2 million for the third quarter of 2003, as
compared to the same period in 2002, due to a decrease in Northern Border
Pipeline's average interest rate as well as a decrease in average debt
outstanding.

Other income decreased $0.4 million for the third quarter of 2003, as
compared to the same period in 2002. The amount for the third quarter of 2002
includes income of $0.6 million for previously vacated microwave frequency
bands.

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 2002

Net income to partners decreased $3.8 million for the nine months ended
September 30, 2003, as compared to the same period in 2002. Northern Border
Pipeline's net income was reduced by higher operating expenses and decreases
in other income partially offset by increases in operating revenues and
reductions in interest expense.

Operating revenues increased $1.8 million for the nine months ended September
30, 2003, as compared to the same period in 2002. The 2002 results were
reduced by uncollected revenues associated with the transportation capacity
previously held by Enron North America Corp., which filed for Chapter 11
bankruptcy protection in December 2001 (see "Update On The Impact Of Enron's
Chapter 11 Filing On Northern Border Pipeline's Business"). For the nine
months ended September 30, 2002, the revenues lost on this capacity totaled
approximately $1.8 million.

Costs and expenses consist of operations and maintenance expenses and taxes
other than income. Operations and maintenance expenses increased $8.4 million
for the nine months ended September 30, 2003, as compared to the same period
in 2002, due primarily to the cost for electricity to power Northern Border
Pipeline's electric-driven compressors. Previously, Northern Border Pipeline
included in its collection of company-use gas quantities that were equivalent
to the cost of electric power. Operations and maintenance expenses also
include an increase in employee benefits expenses.

Taxes other than income increased $1.8 million for the nine months ended
September 30, 2003, as compared to the same period in 2002. The 2002 amount
included a $1.0 million refund of use taxes previously paid on exempt
purchases. Both 2003 and 2002 also include adjustments to ad valorem taxes.
Northern Border Pipeline periodically reviews and adjusts its estimates of ad
valorem taxes. Reductions to previous estimates in 2002 exceeded reductions
to previous estimates in 2003 by approximately $0.4 million.


                                       20
<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 decreased $5.5 million for the nine months ended September
30, 2003, as compared to the same period in 2002, due to a decrease in
Northern Border Pipeline's average interest rate as well as a decrease in
average debt outstanding.

Other income decreased $1.1 million for the nine months ended September 30,
2003, as compared to the same period in 2002. The 2003 amount includes $0.3
million of interest expense for refunds required by the order issued by the
FERC on March 27, 2003 (see "Update on Company Use Gas FERC Filing"). The
2002 amount included $0.6 million of income primarily related to interest
received on the refund of use taxes discussed previously and income of $0.6
million for previously vacated microwave frequency bands.

LIQUIDITY AND CAPITAL RESOURCES OF NORTHERN BORDER PIPELINE COMPANY

DEBT AND CREDIT FACILITIES

Northern Border Pipeline's debt and credit facilities outstanding at
September 30, 2003, are as follows:

<Table>
<Caption>
                                                                             Payments Due by Period
                                                                   -----------------------------------------
                                                                              Current Portion      Long-Term
                                                                    Total    (Less Than 1 Year)     Portion
                                                                   -----------------------------------------
                                                                                  (In Millions)
                                                                   -----------------------------------------
<S>                                                                <C>        <C>                  <C>
$175 million Pipeline Credit Agreement, average 1.92%, due 2005     126.0             -              126.0
6.25% Senior Notes due 2007                                         225.0             -              225.0
7.75% Senior Notes due 2009                                         200.0             -              200.0
7.50% Senior Notes due 2021                                         250.0             -              250.0
                                                                   -----------------------------------------
Total                                                               801.0             -              801.0
                                                                   -----------------------------------------
                                                                   -----------------------------------------
</Table>

Northern Border Pipeline has outstanding interest rate swap agreements with
notional amounts totaling $225 million that expire in May 2007. Under the
interest rate swap agreements, Northern Border Pipeline makes payments to
counterparties at variable rates based on the London Interbank Offered Rate
and in return receives payments based on a 6.25% fixed rate. At September 30,
2003, the average effective interest rate on Northern Border Pipeline's
interest rate swap agreements was 2.38%. Northern Border Pipeline's balance
sheet reflects a non-cash gain of approximately $19.0 million in derivative
financial instruments with a corresponding increase in long-term debt at
September 30, 2003.


                                       21
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

Short-term liquidity needs will be met by operating cash flows and through
the Pipeline Credit Agreement. Long-term capital needs may be met through the
ability to issue long-term indebtedness.

After Northern Border Partners, L.P. announced it would record impairment
charges in the third quarter, Standard & Poor's Rating Services announced
that it placed its 'A-' corporate credit ratings of Northern Border Pipeline
and Northern Border Partners, L.P. on CreditWatch with negative implications.
These impairment charges did not result from the business of Northern Border
Pipeline.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities were $136.5 million in the nine
months ended September 30, 2003 as compared to $163.4 million for the
comparable period in 2002. The decrease is primarily due to Northern Border
Pipeline's refund to its shippers for $10.3 million in 2003 and a reduction
in prepayments in 2003 that Northern Border Pipeline had required certain
shippers make in 2002 for transportation service.

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures were $3.8 million for the nine months ended September
30, 2003 as compared to $6.7 million for the comparable period in 2002. The
capital expenditures for 2003 and 2002 were primarily related to renewals and
replacements of existing facilities.

Northern Border Pipeline has advised that total capital expenditures for 2003
are estimated to be $17 million. Northern Border Pipeline has further advised
that it currently anticipates funding its 2003 capital expenditures primarily
by borrowing on debt facilities and using operating cash flows.

CASH FLOWS FROM FINANCING ACTIVITIES

Cash flows used in financing activities were $141.0 million for the nine
months ended September 30, 2003 as compared to $139.8 million for the
comparable period in 2002. Distributions to partners were $113.0 million and
$122.2 million in the nine months ended September 30, 2003 and 2002,
respectively. The distributions for 2003 were reduced to reflect the impact
of the refunds ordered by the FERC on March 27, 2003 in accordance with the
Northern Border Pipeline distribution formula.

For the nine months ended September 30, 2003 and 2002, borrowings on
long-term debt totaled $121.0 million and $416.9 million, respectively. The
2002 amount included proceeds from the $225 million 6.25% Senior Notes, which
were primarily used to repay previously existing indebtedness. Total payments
on debt were $149.0 million and $434.0 million in the nine months ended
September 30, 2003 and 2002, respectively.

OUTLOOK UPDATE

As a result of commercial activity during July 2003, essentially all of
Northern Border Pipeline's capacity is under contract at least through
December 31, 2003 and, assuming no extensions of existing contracts or
execution of new contracts, approximately 70% and 59% is


                                       22
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

under contract at least through December 31, 2004 and 2005, respectively.

On July 15, 2003, Northern Border Pipeline announced that Cargill,
Incorporated had assumed all of the firm capacity formerly held by Mirant
Americas Energy Marketing, LP. This represents approximately 10% of Northern
Border Pipeline's contracted firm capacity and extends for terms into 2006
and 2008. Additionally, Cargill assumed the management services of
Pan-Alberta Gas, Ltd., previously performed by Mirant.

UPDATE ON THE IMPACT OF ENRON'S CHAPTER 11 FILING ON NORTHERN BORDER
PIPELINE'S BUSINESS

As more fully discussed in TC PipeLines' Annual Report on Form 10-K for the
year ended December 31, 2002, on December 2, 2001, Enron Corp. and certain of
its wholly-owned subsidiaries filed a voluntary petition for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code.

Northern Border Partners, L.P. owns a 70% general partner interest in
Northern Border Pipeline and TC PipeLines, LP owns the remaining 30%.
Northern Plains Natural Gas Company and Pan Border Gas Company, subsidiaries
of Enron, are two of the general partners of Northern Border Partners, L.P.
Northern Plains is also the operator of the Northern Border pipeline system.
On June 25, 2003, Enron announced the organization of CrossCountry Energy
Corp., a newly formed holding company that will hold, among other things,
Enron's ownership interests in Northern Plains and Pan Border. Enron also
announced it had filed a motion with the U.S. Bankruptcy Court for the
Southern District of New York (the Bankruptcy Court) to approve the proposed
transfer of those ownership interests to CrossCountry Energy. That motion was
approved by the Bankruptcy Court on September 25, 2003. The transfer of
ownership interests to CrossCountry Energy is pending.

On September 18, 2003, Enron announced that Enron and its
debtor-in-possession subsidiaries (collectively with Enron, the Debtors)
filed their proposed amended joint Chapter 11 plan (the Plan) and related
disclosure statement (the Disclosure Statement) with the Bankruptcy Court
which amended the Plan and Disclosure Statement previously filed with the
Bankruptcy Court on July 11, 2003. Financial projections for three
going-forward businesses, including CrossCountry Energy, were included in the
Plan. Also Northern Border Pipeline has advised that, under the Plan, it is
anticipated that, if CrossCountry Energy is not sold to a third party, as
permitted by the Plan, shares of CrossCountry Energy would be distributed
directly or indirectly to creditors of the Debtors. Northern Border Pipeline
has advised that Enron has indicated that the Plan and Disclosure Statement
may be further amended. Northern Border Pipeline has further advised that, in
addition, a number of objections to the Plan have been filed, including an
objection by the court appointed examiner for Enron North America Corp.


                                       23
<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 has advised that when the transfer of interests in
Northern Plains and Pan Border to CrossCountry Energy, as contemplated above,
takes place, the articles of incorporation of Northern Plains and Pan Border
will be amended to reflect certain shareholder protections that will be
retained by Enron until a distribution of any common stock of CrossCountry
Energy pursuant to the Plan. Northern Border Pipeline has advised that
Northern Plains and Pan Border, subject to any applicable fiduciary duties
and/or contractual obligations, will need the affirmative vote of Enron to
vote its interest at the Northern Border Pipeline's Management Committee to,
among other things, (a) enter into any business other than owning and
operating natural gas pipelines and related businesses and (b) enter into
any compromise or settlement of any action, suit, litigation, arbitration or
proceeding or any governmental investigation or audit relating to the assets,
liabilities or business of the entities or Northern Border Pipeline, in
excess of $2,000,000.

UPDATE TO POTENTIAL PUBLIC UTILITY HOLDING COMPANY ACT (PUHCA) REGULATION

Further to the discussion of potential impacts to Northern Border Pipeline
provided in the Partnership's quarterly report on Form 10-Q for the periods
ended March 31, 2003 and June 30, 2003, Northern Border Pipeline has advised
that, on October 21, 2003, the SEC granted Enron's motion for oral argument
and set the hearing for December 4, 2003. The Initial Decision is stayed
pending the resolution of the SEC's further review.

If Enron's exemption application is denied by the SEC, Northern Border
Pipeline has advised that it cannot estimate the amount of time that the SEC
will provide for Enron to register as a holding company under PUHCA at which
time Enron and its holding company system would become subject to PUHCA.
Northern Border Pipeline has advised that it intends to seek orders from the
SEC that, if granted, would minimize the impacts previously described of
PUHCA on Northern Border Pipeline's operations. Northern Border Pipeline has
further advised that it also may seek exemptions for its operations from
regulation under PUHCA. Similar orders and exemptions have been granted by
the SEC to other operating subsidiaries of holding companies under PUHCA.
Northern Border Pipeline has advised that no assurance can be given that
Northern Border Pipeline will be successful in obtaining all the orders or


                                       24
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

exemptions that it intends to seek or that its operations will not be subject
to the full regulatory impact of PUHCA.

While TC PipeLines currently does not anticipate that the outcome of the
SEC's determination will have a material impact on its ability to conduct its
operations or to meet its obligations, the Partnership cannot guarantee that
further regulatory developments may not have an impact on its operations.

Both Houses of Congress have passed bills that would repeal PUHCA. It is
uncertain whether or when a reconciled energy bill would be enacted into law.

UPDATE ON POTENTIAL INCREASED HEALTH CARE AND PENSION EXPENSES

Further to the discussion in the Partnership's annual report on Form 10-K for
the year ended December 31, 2002, Northern Border Pipeline has advised that,
on July 22, 2003, Enron filed a motion with the bankruptcy court requesting
authority to terminate the Enron Gas Pipeline Employee Benefit Trust (the
Trust) and to apportion the Trust's assets among certain identified pipeline
companies, one being Northern Plains. In the motion, it states that, as of
June 30, 2002, the asset/liability allocation percentage for Northern Plains
was 2.7% with a liability allocation of $1.89 million and asset allocation of
$846,000. Northern Border Pipeline has advised that, if approved as filed,
the assets of the Trust will be transferred to one or more qualifying trusts
maintained for the benefit of the Northern Border pipeline company retirees
in accordance with the Enron Corp. Medical Plan for Inactive Participants.

Further to the discussion in the Partnership's annual report on Form 10-K for
the year ended December 31, 2002 of potential cost impacts to Northern Border
Pipeline as a result of increased health care expenses and pension benefits,
Northern Border Pipeline has advised that Enron has advised Northern Plains
that it intends to file to terminate Enron's Cash Balance Plan, its pension
benefit plan. Northern Border Pipeline has advised that it is possible that
costs incurred by Northern Plains related to termination of the plan could be
material. Northern Border Pipeline has advised that, while the determination
of reimbursement of such termination costs by Northern Border Pipeline under
its operating agreement will be made at the time of occurrence, such costs
could be material to Northern Border Pipeline.

For additional risks associated with Enron's Chapter 11 filing, please read
the Partnership's Annual Report on Form 10-K for the year ended December 31,
2002 - "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations - Results of Operations of Northern Border Pipeline
Company - Update on the Impact of Enron's


                                       25
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

Chapter 11 Filing on Northern Border Pipeline's Business-Possible Effects."

RESULTS OF OPERATIONS OF TUSCARORA GAS TRANSMISSION COMPANY

CRITICAL ACCOUNTING POLICIES

Tuscarora's accounting policies conform to SFAS No. 71, "Accounting for the
Effects of Certain Types of Regulation." Accordingly, certain assets and
liabilities that result from the regulated ratemaking process are recorded
that would not be recorded under generally accepted accounting principles for
nonregulated entities.

Effective January 1, 2003, Tuscarora adopted SFAS No. 143, "Accounting for
Asset Retirement Obligations," which did not have a material impact on its
financial position or results of operations.

RESULTS OF OPERATIONS

The following sets out summarized financial information for Tuscarora for the
three and nine months ended September 30, 2003 and 2002 and as at September
30, 2003 and December 31, 2002. Amounts discussed represent 100% of the
operations of Tuscarora, in which the Partnership has held a 49% interest
since September 1, 2000.

<Table>
<Caption>
                                                               THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                  SEPTEMBER 30                   SEPTEMBER 30
(UNAUDITED)                                                    ------------------             ------------------
(MILLIONS OF DOLLARS)                                          2003         2002              2003          2002
----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>          <C>               <C>          <C>
TUSCARORA INCOME STATEMENT
Revenues                                                        7.3          5.6              22.0         16.8
Costs and expenses                                             (1.3)        (0.6)             (3.8)        (1.9)
Depreciation                                                   (1.6)        (1.2)             (4.8)        (3.6)
Financial charges                                              (1.6)        (1.3)             (4.9)        (4.3)
Other income                                                    -            0.2                -           0.5
                                                               -------------------------------------------------
Net income                                                      2.8          2.7               8.5          7.5
                                                               -------------------------------------------------
                                                               -------------------------------------------------
</Table>


                                       26
<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>
(MILLIONS OF DOLLARS)                                                       SEPTEMBER 30, 2003    December 31, 2002
-------------------------------------------------------------------------------------------------------------------
                                                                                (UNAUDITED)           (AUDITED)
<S>                                                                         <C>                   <C>
TUSCARORA BALANCE SHEET
ASSETS
Cash and cash equivalents                                                           4.8                      0.6
Other current assets                                                                2.6                      4.3
Plant, property and equipment, net                                                144.5                    148.4
Other assets                                                                        0.9                      1.2
                                                                            ---------------------------------------
                                                                                  152.8                    154.5
                                                                            ---------------------------------------
                                                                            ---------------------------------------

LIABILITIES AND PARTNERS' EQUITY
Current liabilities                                                                 7.9                     14.6
Long-term debt                                                                     83.1                     85.3
Partners' Equity
   Partners' capital                                                               61.8                     54.2
   Accumulated other comprehensive income                                           -                        0.4
                                                                            ---------------------------------------
                                                                                  152.8                    154.5
                                                                            ---------------------------------------
                                                                            ---------------------------------------
</Table>

THIRD QUARTER 2003 COMPARED WITH THIRD QUARTER 2002

Net income increased $0.1 million, or 4%, to $2.8 million for third quarter
2003, compared to $2.7 million for the same period last year. This increase
is primarily due to higher revenue, mostly offset by higher operations and
maintenance expense and higher depreciation expense.

Revenues earned by Tuscarora increased $1.7 million, or 30%, to $7.3 million
for third quarter 2003, compared to $5.6 million for the same period last
year. This increase is due to incremental revenues being generated from new
transportation contracts, including those resulting from the expansion in
2002.

Costs and expenses incurred by Tuscarora increased $0.7 million, or 117%, to
$1.3 million for third quarter 2003, compared to $0.6 million for the same
period last year. This increase is primarily due to higher operations and
maintenance expenses required to operate the two new compressor stations that
were placed into service December 1, 2002.

Depreciation recorded by Tuscarora increased $0.4 million, or 33%, to $1.6
million for third quarter 2003, compared to $1.2 million for the same period
last year. This increase reflects the larger asset base resulting from the
expansion in December 2002.

Financial charges recorded by Tuscarora increased $0.3 million, or 23%, to
$1.6 million for third quarter 2003, compared to $1.3 million for the same
period last year. This increase is primarily due to higher average debt
balances in third quarter 2003 as compared to third quarter 2002.


                                       27
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

NINE MONTHS ENDED SEPTEMBER 30, 2003 COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 30, 2002

Net income increased $1.0 million, or 13%, to $8.5 million for the first nine
months of 2003, compared to $7.5 million for the same period last year. This
increase is primarily due to higher revenue, partially offset by higher
operations and maintenance expense, and higher depreciation expense.

Revenues earned by Tuscarora increased $5.2 million, or 31%, to $22.0 million
for the first nine months of 2003, compared to $16.8 million for the same
period last year. This increase is due to incremental revenues being
generated from new transportation contracts, including those resulting from
the expansion.

Costs and expenses incurred by Tuscarora increased $1.9 million, or 100%, to
$3.8 million for the first nine months of 2003, compared to $1.9 million for
the same period last year. The increase is primarily due to higher operations
and maintenance expenses required to operate two new compressor stations that
were placed into service December 1, 2002.

Depreciation recorded by Tuscarora increased $1.2 million, or 33%, to $4.8
million for the first nine months of 2003, compared to $3.6 million for the
same period last year. This increase reflects the larger asset base resulting
from the expansion in December 2002.

Financial charges recorded by Tuscarora increased $0.6 million, or 14%, to
$4.9 million for the first nine months of 2003, compared to $4.3 million for
the same period last year. The increase is due to higher average debt
balances in the first nine months of 2003 as well as interest income related
to construction recorded during the first nine months of 2002. There was no
interest income related to construction in 2003.

LIQUIDITY AND CAPITAL RESOURCES OF TUSCARORA GAS TRANSMISSION COMPANY

DEBT AND CREDIT FACILITIES

     Tuscarora's debt and credit facilities outstanding at September 30,
2003, are as follows:

<Table>
<Caption>
                                                              Payments Due by Period
                                               --------------------------------------------------
                                               Less Than                                 After 5
                                    Total        1 Year       1-3 Years     4-5 Years     Years
                                    -------------------------------------------------------------
                                                            (In Millions)
                                    -------------------------------------------------------------
<S>                                 <C>        <C>            <C>           <C>          <C>
Series A Senior Notes due 2010      $70.7        $3.7           $7.3          $ 8.4       $51.3
Series B Senior Notes due 2010        7.3         0.3            0.8            1.2         5.0
Series C Senior Notes due 2012        9.7         0.6            1.5            2.1         5.5
                                    -------------------------------------------------------------
Total                               $87.7        $4.6           $9.6          $11.7       $61.8
                                    -------------------------------------------------------------
                                    -------------------------------------------------------------
</Table>


                                       28
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

Short-term liquidity needs will be met by operating cash flows. Long-term
capital needs may be met through the ability to issue long-term indebtedness
and/or partner contributions.

CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities decreased by $2.5 million to
$13.1 million for the first nine months of 2003 compared to $15.6 million for
the same period last year primarily due to changes in working capital,
partially offset by increased net income relating to Tuscarora's expansion.

CASH FLOWS FROM INVESTING ACTIVITIES

In the first nine months of 2003, Tuscarora used $0.9 million for capital
expenditures primarily related to its 2002 expansion.

In the first nine months of 2002, Tuscarora used $25.7 million for capital
expenditures primarily related to the construction of the 2002 expansion
facilities.

CASH FLOWS FROM FINANCING ACTIVITIES

In the first nine months of 2003, Tuscarora reported cash flows used in
financing activities of $8.1 million compared to cash flows provided from
financing activities of $10.1 million for the same period in 2002. In the
first nine months of 2003, Tuscarora repaid the $4.6 million balance
outstanding on its revolving credit facility. Tuscarora also repaid $2.3
million of long-term debt during the first nine months of 2003. Tuscarora
received contributions from partners of $10.0 million and paid cash
distributions of $9.5 million as well as a return of capital to its partners
of $1.6 million in the first nine months of 2003.


                                       29
<Page>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP

In the first nine months of 2002, Tuscarora received proceeds of $10.0
million from the issuance of its Series C Secured Notes, paid $0.3 million in
related issuance costs, and repaid $2.1 million of long-term debt. Tuscarora
received contributions from partners of $9.2 million and paid cash
distributions of $6.7 million in the first nine months of 2002.

SIERRA PACIFIC RESOURCES

Sierra Pacific Resources, the parent company to Sierra Pacific Power Company
(SPPC), Tuscarora's largest shipper, issued a press release on August 28,
2003 and filed a Current Report on Form 8-K with the SEC advising that the
federal bankruptcy court judge overseeing the bankruptcy case of Enron Power
Marketing Inc. (EPMI) rendered a decision in the lawsuit filed by EPMI in its
bankruptcy case asserting claims for damages related to the termination of
its power supply agreements with Nevada Power Company (NPC) and SPPC
(together the Utilities). The bankruptcy court judge granted EPMI's motion
for summary judgment with respect to EPMI's claims against NPC and SPPC of
approximately $200 million and $87 million, respectively, of liquidated
damages, for power not delivered by EPMI, under power supply contracts
terminated by EPMI in May 2002. The bankruptcy court judge also dismissed the
Utilities' counter claims against EPMI, dismissed the Utilities' counter
claims against Enron Corp., the parent of EPMI, and denied the Utilities'
motion to dismiss or stay the proceedings pending the final outcome of their
FERC proceedings against EPMI. In addition to the claims for termination
payments described above, NPC and SPPC had previously deposited approximately
$17.7 million and $6.7 million, respectively, into an escrow account for
energy delivered by EPMI to each of NPC and SPPC in April 2002, for which the
Utilities had not paid.

SPPC to date remains current on its shipping contracts with Tuscarora.


                                       30
<Page>

                  PART I. FINANCIAL INFORMATION (CONTINUED)

       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                              TC PIPELINES, LP

TC PipeLines' interest rate exposure results from its Revolving Credit
Facility, which is subject to variability in LIBOR interest rates. Since
December 31, 2002, there has not been any material change to TC PipeLines'
interest rate exposure.

The Partnership's market risk sensitivity is also influenced by and reflects
the same factors that influence Northern Border Pipeline and Tuscarora.
Neither Northern Border Pipeline nor Tuscarora owns any of the natural gas
they transport, and, therefore, do not assume any of the related natural gas
commodity price risk.

Northern Border Pipeline's interest rate exposure results from variable rate
borrowings from commercial banks. To mitigate potential fluctuations in
interest rates, Northern Border Pipeline's objective is to maintain a
significant portion of its debt portfolio in fixed rate debt. Northern Border
Pipeline also uses interest rate swaps as a means to manage interest rate
expense by converting a portion of fixed rate debt into variable rate debt to
take advantage of declining interest rates. At September 30, 2003, Northern
Border Pipeline had $351.0 million of variable rate debt outstanding, $225.0
million of which was previously fixed rate debt that had been converted to
variable rate debt through the use of interest rate swaps. As of September
30, 2003, approximately 56% of Northern Border Pipeline's debt portfolio was
in fixed rate debt.

Northern Border Pipeline has advised that if average interest rates change by
one percent compared to rates in effect as of September 30, 2003, its annual
interest expense would change by approximately $3.5 million. This amount has
been determined by considering the impact of the hypothetical interest rates
on variable rate borrowings outstanding as of September 30, 2003.


                                       31
<Page>

                  PART I. FINANCIAL INFORMATION (CONCLUDED)

                       ITEM 4. CONTROLS AND PROCEDURES

                               TC PIPELINES, LP

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Based on their evaluation
as of the end of the period covered by this quarterly report, the President
and Chief Executive Officer and Chief Financial Officer of the general
partner of the Partnership have concluded that the Partnership's disclosure
controls and procedures referred to in paragraph 4(b) of their certifications
included as exhibits to this report were effective.


                                       32
<Page>

                           PART II. OTHER INFORMATION

                            ITEM 5. OTHER INFORMATION

                                TC PIPELINES, LP

Max Feldman is the Partnership's designated member on Northern Border
Pipeline's Management Committee as of September 2003. Mr. Feldman is
Vice-President, Gas Transmission, West, of TransCanada, a position he has
held since April 2003. From 1999 to 2003, he was Senior Vice-President,
Customer, Sales and Service, and from 1995 to 1999, Mr. Feldman held several
Vice-President positions in the operations, customer service and marketing
areas of TransCanada. Mr. Feldman is 55 years old.

In September 2003, Northwest Border Pipeline Company, a wholly-owned
subsidiary of TransCanada, designated Paul E. Miller as its member on the
Northern Border Partners, L.P. Policy Committee.  Mr. Miller is also
Northwest Border's representative on the Northern Border Pipeline Management
Committee. Additionally, Mr. Miller serves as Director Corporate Development
of TransCanada, a position he has held since February 2003. From July 1998 to
January 2003, Mr. Miller was Director Finance of TransCanada. Prior to July
1998, Mr. Miller was Manager Finance of TransCanada. Mr. Miller is 45 years
old.

SUBSEQUENT EVENTS

On October 6th, 2003, Sierra Pacific Resources issued a press release and
filed a Current Report on Form 8-K with the SEC advising that NPC and SPPC
had filed complaints with the FERC to prevent EPMI from enforcing the
termination provision of certain wholesale electric power transactions
involving more than $330 million until FERC has determined whether EPMI
complied with applicable tariff provisions and whether it is in the public
interest to require payment of the termination payments.

On October 17th, 2003, Sierra Pacific Resources filed a Current Report on
Form 8-K with the SEC advising that, on October 15th, the Bankruptcy Court
Judge overseeing the bankruptcy case of EPMI approved a stipulation among
EPMI, NPC and SPPC in which EPMI agreed for a 60 day period beginning October
10, 2003 not to seek to execute, or register or institute any proceedings for
the enforcement of EPMI's judgment against the Utilities entered by the
Bankruptcy Court on September 25, 2003 (the Judgment). The Judgment provides
for the payment by NPC and SPPC of approximately $235 million and $102
million, respectively, liquidated damages and pre-Judgment interest, for
power not delivered by EPMI under power supply contracts terminated by EPMI
in May 2002. The Utilities have previously filed a motion with the Bankruptcy
Court seeking a stay pending appeal of the Judgment and proposing to issue


                                       33
<Page>

                    PART II. OTHER INFORMATION (CONTINUED)

                     ITEM 5. OTHER INFORMATION (CONCLUDED)

                                TC PIPELINES, LP

General and Refunding Mortgage Bonds as collateral to secrete payment of the
judgment. A hearing on the motion originally scheduled for October 17, 2003
has been rescheduled for October 31, 2003. The Utilities are unable to
predict the outcome of the hearing before the Bankruptcy Court.

On November 7, 2003, Sierra Pacific filed a Current Report on Form 8-K to
report that on November 6, 2003 the federal Bankruptcy Court Judge overseeing
the bankruptcy case of EPMI rendered a decision on the motion by NPC and SPPC
to stay the execution of the Judgment. The Bankruptcy Court Judge's ruling
stays the execution of the Judgment, which stay will be secured by the
posting into escrow by NPC and SPPC of $235 million and $103 million,
respectively, of General and Refunding Mortgage Bonds plus approximately
$280,000 in cash for pre-Judgment interest. NPC and SPPC have sufficient
regulatory authority from the Public Utilities Commission of Nevada to comply
with the Bankruptcy Court Judge's ruling. Additionally, NPC and SPPC will pay
a total of $35 million in cash on a pro rata basis into the escrow account,
which will lower the principal amount of General and Refunding Mortgage Bonds
held in escrow by a like amount, 90 days after the date of the final stay
order. The Bankruptcy Court Judge added that conditions related to the order
will be reviewed by the Court approximately two weeks after the payment of
the $35 million in cash collateral.

Tuscarora's operator, which is a wholly owned subsidiary of Sierra Pacific
Resources, has advised the Partnership that SPPC remains current on all of
its shipping contracts. The Partnership plans to continue to take all
appropriate action to protect the interests of the Partnership and its
unitholders.


                                       34
<Page>

                    PART II. OTHER INFORMATION (CONCLUDED)

                   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                                TC PIPELINES, LP

(a)  Exhibits

     31.1  Certification of President and Chief Executive Officer pursuant to
           Section 302 of the Sarbanes-Oxley Act of 2002.

     31.2  Certification of Chief Financial Officer pursuant to Section 302 of
           the Sarbanes-Oxley Act of 2002.

     32.1  Certification of President and Chief Executive Officer pursuant to
           Section 906 of the Sarbanes-Oxley Act of 2002.

     32.2  Certification of Chief Financial Officer pursuant to Section 906 of
           the Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K

     1.  Report on Form 8-K dated July 10, 2003 and filed on July 10, 2003
         reporting that Northern Border Pipeline issued a press release
         announcing that it has received commitments from several entities
         for transportation capacity at the maximum rate available under its
         tariff, leaving approximately 11% of the total system capacity
         expiring prior to November 1, 2003.

     2.  Report on Form 8-K dated July 15, 2003 and filed on July 15, 2003
         reporting that Northern Border Pipeline issued a press release
         announcing that it had made further progress in recontracting and
         had nearly sold out the long-haul firm capacity on its pipeline
         system. Northern Border Pipeline also announced that Cargill,
         Incorporated had finalized the assignment of all of the firm
         transportation formerly held by Mirant Americas Energy Marketing,
         LP, which represents approximately 10% of Northern Border Pipeline's
         firm capacity and extends for terms into 2006 and 2008.

     3.  Report on Form 8-K dated July 24, 2003 and filed July 24, 2003
         reporting that TC PipeLines, LP issued a press release announcing
         second quarter results for the period ended June 30, 2003.

     4.  Report on Form 8-K dated October 24, 2003 and filed on October 24,
         2003 reporting that TC PipeLines, LP issued a press release
         announcing third quarter results for the period ended September 30,
         2003.


                                       35
<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

Date: November 13, 2003                  By: /s/ Russell K. Girling
                                         ------------------------------------
                                         Russell K. Girling
                                         Chief Financial Officer
                                         (duly authorized officer)

Date: November 13, 2003                  By: /S/ Amy Leong
                                         ------------------------------------
                                         Amy Leong
                                         Controller (duly authorized officer)


                                       36