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

For the period MAY 28 TO JUNE 30, 1999


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



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




          Four Greenspoint Plaza
          16945 Northchase Drive
              Houston, Texas                               77060
----------------------------------------            ---------------------
(Address of principal executive offices)                 (Zip code)



                               (281) 873-7774
             --------------------------------------------------
             Registrant's telephone number, including area code


     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report(s), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X] No [ ]



     The registrant had 14,690,694 common units outstanding as of August 6,
1999.


                                       1
<PAGE>

                                TC PIPELINES, LP

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
                                                                                             Page No.
                                                                                             --------
<S>                                                                                          <C>
PART I.  FINANCIAL INFORMATION

     ITEM 1.  Financial Statements

          Income - Period May 28 to June 30, 1999                                                3
          Balance Sheet - June 30, 1999 and May 28, 1999                                         3
          Cash Flow - Period May 28 to June 30, 1999                                             4
          Notes to Summarized Financial Statements                                               5

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

          Results of Operations of TC PipeLines, LP                                              7
          Liquidity and Capital Resources of TC PipeLines, LP                                    7
          Results of Operations of Northern Border Pipeline Company                              8
          Liquidity and Capital Resources of Northern Border Pipeline Company                   11

     ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                        16

PART II.  OTHER INFORMATION

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


                                       2
<PAGE>

                          PART I. FINANCIAL INFORMATION

                          ITEM 1. FINANCIAL STATEMENTS

                                TC PIPELINES, LP


                                     INCOME

For the period May 28 (commencement of operations) to June 30, 1999 (unaudited)
(thousands of dollars except per unit amount)
-------------------------------------------------------------------------------

<TABLE>

<S>                                                            <C>
EQUITY INCOME FROM INVESTMENT IN
  NORTHERN BORDER PIPELINE COMPANY (NOTE 3)                              3,130
GENERAL AND ADMINISTRATIVE EXPENSES                                        144
                                                               ----------------
NET INCOME                                                               2,986
                                                               ----------------
                                                               ----------------

NET INCOME ALLOCATION
General partner                                                             60
Common units                                                             2,456
Subordinated units                                                         470
                                                               ----------------
                                                                         2,986
                                                               ----------------
                                                               ----------------

NET INCOME PER UNIT (NOTE 4)                                             $0.17
                                                               ----------------
                                                               ----------------
UNITS OUTSTANDING (THOUSANDS)                                           17,500
                                                               ----------------
</TABLE>





                                  BALANCE SHEET

<TABLE>
<CAPTION>
(unaudited)                                                               JUNE 30,             May 28,
(thousands of dollars)                                                      1999                1999
---------------------------------------------------------------------------------------    ----------------
<S>                                                                    <C>                 <C>
ASSETS
Cash                                                                               300                   -
Investment in Northern Border Pipeline Company (Note 3)                        244,781             241,651
                                                                       ----------------    ----------------
                                                                               245,081             241,651
                                                                       ----------------    ----------------
                                                                       ----------------    ----------------

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

LIABILITIES AND PARTNERS' CAPITAL
Current Liabilities
  Due to affiliate                                                                 300                   -
  Accounts payable                                                                 144                   -
                                                                       ----------------    ----------------
                                                                                   444                   -
                                                                       ----------------    ----------------
Partners' Capital
  General partner                                                                4,893               4,833
  Common units                                                                 203,472             193,515
  Subordinated units                                                            36,272              43,303
                                                                       ----------------    ----------------
                                                                               244,637             241,651
                                                                       ----------------    ----------------
                                                                               245,081             241,651
                                                                       ----------------    ----------------
                                                                       ----------------    ----------------
</TABLE>

See accompanying Notes to Summarized Financial Statements.


                                       3
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP


                                    CASH FLOW

For the period May 28 (commencement of operations) to June 30, 1999 (unaudited)
(thousands of dollars)
-------------------------------------------------------------------------------

<TABLE>
<S>                                                            <C>
CASH GENERATED FROM OPERATIONS
Net income                                                               2,986
Add/(Deduct):
Equity income                                                           (3,130)
Decrease in operating working capital                                      144
                                                               ----------------
                                                                             -
                                                               ----------------

FINANCING ACTIVITIES
Due to affiliate                                                           300
Common units issued                                                      7,501
Subordinated units redeemed                                             (7,501)
                                                               ----------------
                                                                           300
                                                               ----------------

INCREASE IN CASH                                                           300

CASH, BEGINNING OF PERIOD                                                    -
                                                               ----------------

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

See accompanying Notes to Summarized Financial Statements.


                                       4
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONTINUED)

                                TC PIPELINES, LP


                    NOTES TO SUMMARIZED FINANCIAL STATEMENTS
       For the period May 28 (commencement of operations) to June 30, 1999

                                   (unaudited)


NOTE 1    BASIS OF PRESENTATION

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

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

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

          The results of operations for the period ended June 30, 1999, are
not necessarily indicative of the results that may be expected for a full
fiscal year.


NOTE 2    FORMATION OF PARTNERSHIP

TC PipeLines was formed on December 16, 1998. The Partnership commenced
operations on May 28, 1999 when it issued 14,300,000 common units (11,500,000 to
the public and 2,800,000 to an affiliate of the general partner) for net
proceeds of $274.6 million, after deducting underwriters' fees of $15.0 million.
These proceeds, along with 3,200,000 subordinated units, a 2 percent general
partner interest and incentive distribution rights, were issued to TransCanada
Border PipeLine Ltd. and TransCan Northern Ltd. (collectively, the predecessor
companies), affiliates of the general partner, to acquire the predecessor
companies' 30 percent general partner interest in Northern Border Pipeline
Company.

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

          The common units and the subordinated units represent limited
partner interests in the Partnership. During the period which subordinated
units are outstanding (the subordination period), to the extent there is
sufficient available cash, the holders of common units are entitled to
receive a minimum quarterly distribution (MQD), plus any arrearages on the
common units, before any distribution is made to the holders of subordinated
units. The holders of subordinated units will have the right to receive the
MQD only after the common units have received the MQD plus any arrearages in
payment of the MQD. The subordinated units are not entitled to arrearages.
Upon expiration of the subordination period, which will generally not occur
before June 30, 2004, the subordinated units will convert into common units
on a one-for-one basis and will then participate pro rata with the other
common units in distributions of available cash.

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


NOTE 3    INVESTMENT IN NORTHERN BORDER PIPELINE COMPANY

The Partnership owns a 30 percent general partner interest in Northern Border
Pipeline Company (Northern Border), a partnership which owns a natural gas
pipeline extending from the Montana-Saskatchewan border near Port of Morgan,
Montana, to a terminus near Manhattan, Illinois. Northern Border is subject
to regulation by the Federal Energy Regulatory Commission. Northern Border's
accounting policies conform to generally accepted accounting principles, as
applied in the case of regulated entities.


                                       5
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

                    ITEM 1. FINANCIAL STATEMENTS (CONCLUDED)

                                TC PIPELINES, LP


          The Partnership uses the equity method of accounting for its
investment in Northern Border, over which it is able to exercise significant
influence. The Partnership's investment balance as at May 28, 1999 represents
the combined carrying values of the investment in Northern Border as
reflected in the accounts of the predecessor companies at the same date. TC
PipeLines' equity income for the period May 28 to June 30, 1999 represents 30
percent of the net income of Northern Border for the same period.

          The following sets out summarized financial information for
Northern Border as at June 30, 1999 and for the period May 28 to June 30,
1999. TC PipeLines has held its general partner interest since May 28, 1999.

<TABLE>
<CAPTION>
(unaudited)
(millions of dollars)                                  May 28 - June 30, 1999
------------------------------------------------------------------------------
<S>                                                    <C>
NORTHERN BORDER INCOME STATEMENT
Revenues                                                                 27.6
Costs and expenses                                                       (6.3)
Depreciation                                                             (4.9)
Financial charges and other                                              (6.0)
                                                       -----------------------

Net income                                                               10.4
                                                       -----------------------
                                                       -----------------------
</TABLE>

<TABLE>
<CAPTION>
(unaudited)
(millions of dollars)                                      June 30, 1999
------------------------------------------------------------------------------
<S>                                                     <C>
NORTHERN BORDER BALANCE SHEET
Cash and short-term investments                                          25.9
Other current assets                                                     29.3
Plant, property and equipment, net                                    1,744.7
Other assets                                                             13.3
Current liabilities                                                     (55.8)
Deferred amounts                                                        (10.5)
Long-term debt                                                         (912.0)
                                                       -----------------------

Partners' capital                                                       834.9
                                                       -----------------------
                                                       -----------------------
</TABLE>


NOTE 4    NET INCOME PER UNIT

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


NOTE 5    CREDIT FACILITY

On May 28, 1999, the Partnership entered into a $40 million unsecured two
year revolving credit facility with TransCanada PipeLine USA Ltd., an
affiliate of the general partner. At June 30, 1999, the Partnership has not
drawn on this credit facility.


                                       6
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


RESULTS OF OPERATIONS OF TC PIPELINES, LP

TC PipeLines, LP (the Partnership) was formed on December 16, 1998 by
TransCanada PipeLines Limited (TransCanada) to acquire, own and participate
in the management of United States based pipeline assets. On May 28, 1999 the
Partnership issued 14,300,000 common units (11,500,000 to the public and
2,800,000 to an affiliate of the general partner) for net proceeds of $274.6
million. The common units are quoted on the Nasdaq National Market and trade
under the symbol "TCLPZ". The Partnership used the net proceeds from this
offering, along with 3,200,000 subordinated units, an aggregate 2 percent
general partner interest and incentive distribution rights, to acquire the
collective 30 percent general partner interest in Northern Border Pipeline
Company (Northern Border) previously held by TransCanada Border PipeLine Ltd.
and TransCan Northern Ltd. (collectively, the predecessor companies),
affiliates of the general partner, TC PipeLines GP, Inc.

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

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

TC PipeLines, LP accounts for its interest in Northern Border using the
equity method of accounting. The Partnership's initial investment in Northern
Border was recorded at $241.7 million, the combined carrying values of the
investment in Northern Border as reflected in the accounts of the predecessor
companies as at May 28, 1999. This amount is also equal to 30 percent of
Northern Border's partners' capital as at May 28, 1999. In accordance with
the equity method of accounting, the carrying value of the investment
increased by $3.1 million of equity income for the period May 28 to June 30,
1999, reflecting the Partnership's 30 percent share of Northern Border's net
income for the same period.

In addition to recording equity income from Northern Border, the Partnership
recorded general and administrative expenses of $0.1 million, resulting in
net income of $3.0 million for the period May 28 to June 30, 1999.

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


LIQUIDITY AND CAPITAL RESOURCES OF TC PIPELINES, LP

CASH DISTRIBUTION POLICY OF TC PIPELINES, LP

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

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

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

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

     -    Thereafter, in a manner whereby the general partner has the right
          (referred to as Incentive Distribution Rights) to receive
          increasing percentages of quarterly distributions.


                                       7
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


The minimum quarterly distribution is $0.45 per unit. The initial
distribution reflects the actual length of the period from closing of the
offering (May 28, 1999) to June 30, 1999.

On July 19, 1999, the board of directors of the general partner declared a
cash distribution of $0.1681 per unit for the period May 28 to June 30, 1999
which is payable on August 12, 1999, to unitholders of record as of July 30,
1999. In total, the Partnership will make a cash distribution of $3.1 million
which will be paid out in the following manner: $2.5 million to common
unitholders, $0.5 million to the general partner as holder of the
subordinated units, and $0.1 million to the general partner in respect of its
2 percent general partner interest.

The Partnership will fund this cash distribution with its share of Northern
Border's second quarter cash distribution which was received on August 3,
1999.

NORTHERN BORDER CASH DISTRIBUTION POLICY

In December 1998, Northern Border changed its policy regarding distributions
to its partners, with the unanimous consent of the members of its management
committee, in two respects. The timing of distributions was changed from the
last business day of the quarter to the second business day of the second
month following the end of the quarter. The computation period for
distributions was also changed from quarterly with one month in arrears to
quarterly.

In accordance with Northern Border's cash distribution policy, a distribution
for the second quarter ending June 30, 1999 was paid on August 3, 1999. As
stated in the amended general partnership agreement for Northern Border, the
predecessor companies received their proportionate share of this cash
distribution for the period April 1 to May 27, 1999. TC PipeLines, LP
received $3.3 million, representing 30 percent of Northern Border's cash
distribution for the period May 28 to June 30, 1999.

CREDIT FACILITY AND SHORT-TERM BORROWINGS

On May 28, 1999, the Partnership entered into a $40 million unsecured two
year revolving credit facility with TransCanada PipeLine USA Ltd., an
affiliate of the general partner. The credit facility bears interest at one-,
two-, three-, or six-month London Interbank Offered Rate plus 1.25 percent,
depending on the term selected by the Partnership. The purpose of the
revolving credit facility is to provide borrowings to fund capital
expenditures, to fund capital contributions to Northern Border and for
working capital and other general business purposes, including enabling the
Partnership to make distributions to its partners if there has been a
temporary interruption or delay in the receipt of cash distributions from
Northern Border. At June 30, 1999, the Partnership has not drawn on this
credit facility.

On June 28, 1999, the Partnership received a short-term non-interest bearing
working capital advance in the amount of $0.3 million from its general
partner. The Partnership intends to repay this advance within twelve months.

CAPITAL REQUIREMENTS

The Partnership expects that Northern Border will request capital
contributions in aggregate of approximately $13 million from TC PipeLines, LP
in 2000. Management expects to fund these capital contributions from cash
reserves and drawings under the revolving credit facility.

RESULTS OF OPERATIONS OF NORTHERN BORDER PIPELINE COMPANY

The following sets out summarized financial information for Northern Border
as at June 30, 1999 and for the three and six months ended June 30, 1999. TC
PipeLines, LP has held its 30 percent general partner interest since May 28,
1999.


                                       8
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


<TABLE>
<CAPTION>
(unaudited)                                          Three months ended        Six months ended
(millions of dollars)                                  June 30, 1999            June 30, 1999
--------------------------------------------------------------------------  -----------------------
<S>                                                <C>                      <C>
Northern Border Income Statement
Revenues                                                             73.0                    146.7
Costs and expenses                                                  (16.3)                   (32.9)
Depreciation                                                        (12.9)                   (25.7)
Financial charges and other                                         (14.8)                   (28.8)
                                                   -----------------------  -----------------------

Net income                                                           29.0                     59.3
                                                   -----------------------  -----------------------
                                                   -----------------------  -----------------------
</TABLE>

<TABLE>
<CAPTION>
(unaudited)
(millions of dollars)                                  June 30, 1999
--------------------------------------------------------------------------
<S>                                                <C>
Northern Border Balance Sheet
Cash and short-term investments                                      25.9
Other current assets                                                 29.3
Plant, property and equipment, net                                1,744.7
Other assets                                                         13.3
Current liabilities                                                 (55.8)
Deferred amounts                                                    (10.5)
Long-term debt                                                     (912.0)
                                                   -----------------------

Partners' capital                                                   834.9
                                                   -----------------------
                                                   -----------------------
</TABLE>


Northern Border's revenue is derived from agreements with various shippers
for the transportation of natural gas. It transports gas under a Federal
Energy Regulatory Commission (FERC) regulated tariff that provides an
opportunity to recover operations and maintenance costs of the pipeline,
taxes other than income taxes, interest, depreciation and amortization, an
allowance for income taxes and a regulated return on equity. Northern Border
is generally allowed an opportunity to collect from its shippers a return on
regulated rate base as well as recover that rate base through depreciation
and amortization. The return amount Northern Border may collect from its
shippers declines as the rate base is recovered. Billings for the firm
transportation agreements are based on contracted volumes to determine the
allocable share of the cost of service and are not dependent upon the
percentage of available capacity actually used.

In December 1998, Northern Border completed an expansion and extension of its
pipeline system (The Chicago Project). As a result of placing the facilities
for The Chicago Project into service, Northern Border has added approximately
$893 million to its gas plant in service through June 30, 1999 ($840 million
through December 31, 1998). The final construction cost is estimated to be
$894 million.

SECOND QUARTER 1999 COMPARED WITH SECOND QUARTER 1998

Operating revenues increased $24.2 million for the second quarter of 1999, as
compared to the same period in 1998, due primarily to additional revenues
from the operation of The Chicago Project facilities. New firm transportation
agreements with 27 shippers provided for additional receipt capacity of 700
million cubic feet per day, a 42 percent increase. The Chicago Project
increased Northern Border's rate base, which increased Northern


                                       9
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


Border's return for the second quarter of 1999. Also reflected in the
increase in 1999 revenues are recoveries of increased pipeline operating
expenses due to the new facilities.

Costs and expenses consist of operations and maintenance expense, taxes other
than income and the regulatory credit account.

Operations and maintenance expense increased $1.6 million for the second
quarter of 1999, from the comparable period in 1998, due primarily to
operations and maintenance expenses for The Chicago Project facilities
recorded in 1999.

Taxes other than income increased $1.5 million for the second quarter of
1999, as compared to the same period in 1998, due primarily to ad valorem
taxes attributable to the facilities placed into service for The Chicago
Project.

For the second quarter of 1998, Northern Border recorded a regulatory credit
of $1.9 million. During the construction of The Chicago Project, Northern
Border placed certain new facilities into service in advance of the December
1998 in service date to maintain gas flow at firm contracted capacity while
existing facilities were being modified. The regulatory credit deferred the
cost of service of these new facilities. Northern Border is allowed to
recover from its shippers the regulatory asset that resulted from the cost of
service deferral over a ten-year period commencing with the in service date
of The Chicago Project.

Depreciation and amortization expense increased $2.9 million for the second
quarter of 1999, as compared to the same period in 1998, due primarily to
Northern Border placing the facilities for The Chicago Project into service.
The impact of the additional facilities on depreciation and amortization
expense was partially offset by a decrease in the depreciation rate applied
to transmission plant from 2.5% to 2.0%. Northern Border agreed to reduce the
depreciation rate at the time The Chicago Project was placed into service, as
part of a previous rate case settlement.

Financial changes and other consists of interest expense, net and other
income.

Interest expense, net increased $8.5 million for the second quarter of 1999,
as compared to the same period in 1998, due to an increase in interest
expense of $5.0 million and a decrease in interest expense capitalized of
$3.5 million. Interest expense increased due primarily to an increase in
average debt outstanding, reflecting amounts borrowed to finance a portion of
the capital expenditures for The Chicago Project. The impact of the increased
borrowings on interest expense was partially offset by a decrease in Northern
Border's average interest rates between 1998 and 1999. The decrease in
interest expense capitalized is due to the completion of construction of The
Chicago Project in December 1998.

Other income (expense) decreased $3.7 million for the second quarter of 1999,
as compared to the same period in 1998, primarily due to a decrease in the
allowance for equity funds used during construction. The decrease in the
allowance for equity funds used during construction is due to the completion
of construction of The Chicago Project in December 1998.

SIX MONTHS JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998

Operating revenues increased $50.3 million for the first half of 1999, as
compared to the same period in 1998, due primarily to additional revenues
from the operation of The Chicago Project facilities. The Chicago Project
increased Northern Border's rate base, which increased Northern Border's
return for the first half of 1999. Also reflected in the increase in 1999
revenues are recoveries of increased pipeline operating expenses due to the
new facilities.

Costs and expenses consist of operations and maintenance expense, taxes other
than income and the regulatory credit account.

Operations and maintenance expense increased $3.6 million for the first half
of 1999, from the comparable period in 1998, due primarily to operations and
maintenance expenses for The Chicago Project facilities recorded in 1999 and
increased administrative expenses for Northern Border.


                                       10
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


Taxes other than income increased $3.0 million for the first half of 1999, as
compared to the same period in 1998, due primarily to ad valorem taxes
attributable to the facilities placed into service for The Chicago Project.

For the first half of 1998, Northern Border recorded a regulatory credit of
$2.2 million. During the construction of The Chicago Project, Northern Border
placed certain new facilities into service in advance of the December 1998 in
service date to maintain gas flow at firm contracted capacity while existing
facilities were being modified. The regulatory credit deferred the cost of
service of these new facilities. Northern Border is allowed to recover from
its shippers the regulatory asset that resulted from the cost of service
deferral over a ten-year period commencing with the in service date of The
Chicago Project.

Depreciation and amortization expense increased $5.9 million for the first
half of 1999, as compared to the same period in 1998, due primarily to
Northern Border placing the facilities for The Chicago Project into service.
The impact of the additional facilities on depreciation and amortization
expense was partially offset by a decrease in the depreciation rate applied
to transmission plant from 2.5% to 2.0%. Northern Border agreed to reduce the
depreciation rate at the time The Chicago Project was placed into service, as
part of a previous rate case settlement.

Financial changes and other consists of interest expense, net and other
income.

Interest expense, net increased $16.5 million for the first half of 1999, as
compared to the same period in 1998, due to an increase in interest expense
of $10.3 million and a decrease in interest expense capitalized of $6.2
million. Interest expense increased due primarily to an increase in average
debt outstanding, reflecting amounts borrowed to finance a portion of the
capital expenditures for The Chicago Project. The impact of the increased
borrowings on interest expense was partially offset by a decrease in Northern
Border's average interest rates between 1998 and 1999. The decrease in
interest expense capitalized is due to the completion of construction of The
Chicago Project in December 1998.

Other income (expense) decreased $5.0 million for the first half of 1999, as
compared to the same period in 1998, primarily due to a decrease in the
allowance for equity funds used during construction. The decrease in the
allowance for equity funds used during construction is due to the completion
of construction of The Chicago Project in December 1998.


LIQUIDITY AND CAPITAL RESOURCES OF NORTHERN BORDER PIPELINE COMPANY

GENERAL

In June 1997, Northern Border entered into a credit agreement (Pipeline
Credit Agreement) with certain financial institutions to borrow up to an
aggregate principal amount of $750 million. The Pipeline Credit Agreement is
comprised of a $200 million five-year revolving credit facility to be used
for the retirement of Northern Border's previously outstanding bank loan
agreements and for general business purposes, and a $550 million three-year
revolving credit facility to be used for the construction of The Chicago
Project. Effective March 1999, in accordance with the provisions of the
Pipeline Credit Agreement, Northern Border converted the three-year revolving
credit facility to a term loan maturing in June 2002. At June 30, 1999,
$112.5 million and $549.5 million had been borrowed on the five-year
revolving credit facility and the term loan, respectively.

In September 1998, Northern Border executed interest rate forward agreements
with an aggregate notional amount of $150 million to hedge the interest rate
for a planned issuance of fixed rate debt during 1999. Northern Border
anticipates issuing debt during the third quarter of 1999 and using the
proceeds to repay amounts borrowed on the Pipeline Credit Agreement.

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


                                       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


CASH FLOWS FROM OPERATING ACTIVITIES

Cash flows provided by operating activities increased $28.5 million to $83.3
million for the first half of 1999, as compared to the same period in 1998,
primarily attributed to The Chicago Project facilities placed into service in
late December 1998.

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures of $77.0 million for the first half of 1999 include
$70.4 million for The Chicago Project. The remaining capital expenditures for
1999 are primarily related to renewals and replacements of existing
facilities. For the comparable period in 1998, capital expenditures were
$298.9 million, which included $286.7 million for The Chicago Project.

Total capital expenditures for 1999 are estimated to be $117 million
including $11 million for Project 2000, which is a proposed project to extend
the pipeline system into Indiana by November 2000, and $87 million for The
Chicago Project. Approximately $37 million of the capital expenditures for
The Chicago Project are for construction completed in 1998. An additional $19
million of 1999 capital expenditures is planned for renewals and replacements
of the existing facilities. Northern Border anticipates funding its 1999
capital expenditures primarily by borrowing on the Pipeline Credit Agreement
and using internal sources.

CASH FLOWS FROM FINANCING ACTIVITIES

Cash flows used in financing activities were $17.8 million for the first half
of 1999, as compared to cash flows provided by financing activities of $254.1
million for the first half of 1998. During the first half of 1998, Northern
Border's general partners contributed $197.0 million to finance a portion of
the capital expenditures for The Chicago Project. Distributions paid to the
general partners increased $34.9 million for the first half of 1999 as
compared to the same period in 1998. The distribution for the first half of
1999 was impacted by increased earnings as well as a change in the timing of
distribution payments. The distribution for the first half of 1998 was
impacted by a rate case refund during the fourth quarter of 1997. Advances
under the Pipeline Credit Agreement, which were used to finance a portion of
the capital expenditures for The Chicago Project, were $65 million for the
first half of 1999 as compared to advances of $90 million for the same period
in 1998. During the first half of 1999, $15.0 million was repaid on the
Pipeline Credit Agreement.

YEAR 2000

TC PipeLines, LP and the general partner are not materially dependent upon
computer systems to conduct their businesses. Accordingly, Management does
not believe that the Year 2000 problem will have a material adverse effect on
the Partnership's business, financial condition or results of operations,
except as to any material adverse effect that may result from any Year 2000
problem affecting Northern Border, as discussed below.

Similar to most businesses, Northern Border relies heavily on information
systems technology to operate in an efficient and effective manner. Much of
this technology takes the form of computers and associated hardware for data
processing and analysis. In addition, a great deal of information processing
technology is embedded in microelectronic devices.

The Year 2000 problem results from the use in computer hardware and software
of two digits rather than four digits to define the applicable year. As a
result, computer programs that have date-sensitive software may recognize a
date using "00" as the year 1900 rather than the year 2000.

If not corrected, many computer applications could fail or create erroneous
results. The effects of the Year 2000 problem are compounded because of the
interdependence of computer and telecommunication systems in the United
States and throughout the world. This interdependence is true for Northern
Border and its respective suppliers and customers.


                                       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


Northern Border has developed a plan, which will be modified as events
warrant, to address Year 2000 problems (the Plan). The Plan is designed to
take reasonable steps to prevent mission-critical functions from being
impaired due to the Year 2000 problem. Mission-critical functions are
pipeline operations, operated in a manner that is safe for personnel and the
public. Pipeline operations include the flow of natural gas through the
pipeline with the operation of thirteen natural gas fired compressor
stations, two electric powered compressor stations, measurement stations for
receipt and delivery of gas and the supervisory control and data acquisition
(SCADA) computer system.

Northern Border is committed to allocating the resources necessary to
implement the Plan. A core team of individuals has been established to
implement and complete the Plan (the Y2K Team). The Plan includes developing
a comprehensive component inventory of computer hardware, software, embedded
chips and third-party interfaces; assessing the risk of non-compliance of
each component; identifying the impact of any component failure; assessing
Year 2000 compliance of each component; identifying and implementing
solutions for non-compliance of components; testing of solutions implemented;
and developing contingency plans for critical components and systems.

As of June 1999, Northern Border has identified, inventoried and assessed
computer software, hardware, embedded chips, and third-party interfaces.
Where necessary, remediation, replacement, or adequate workarounds have been
identified and implemented or are in the process of being implemented. The
workaround Northern Border has employed in very limited instances is to turn
the system clocks back to a past date so that the systems will not rollover
to the year 2000 for several years. System clocks have been turned back at
two compressor stations that have an older control system that has not been
upgraded. TC PipeLines, LP believes that there is limited risk involved with
turning the clocks back on these computer systems because all functions are
local to the station and their operations are not dependent on knowing the
exact date. This strategy allows the computers to continue to function until
replaced.

At this time, it is TC PipeLines, LP's understanding that all of Northern
Border's mission critical systems are Year 2000 ready. As far as non-mission
critical systems, it is TC PipeLines, LP's understanding that at the current
time the systems are over 95% Year 2000 ready, based on the work effort
involved. Additional work remaining consists primarily of completing upgrades
of certain off-the-shelf software.

The Plan recognizes that the computer, telecommunications and other systems
(Outside Systems) of outside entities (Outside Entities) have the potential
for major, mission-critical, adverse effects on the conduct of Northern
Border's business. Northern Border does not have control of these Outside
Systems. However, the Plan includes an ongoing process of identifying and
contacting Outside Entities whose systems have or may have a substantial
effect on Northern Border's ability to continue to conduct the
mission-critical aspects of their businesses without disruption from Year
2000 problems. The Plan requires Northern Border to attempt to inventory and
assess the extent to which these Outside Systems may not be Year 2000
compatible. The Y2K Team will reasonably attempt to coordinate with these
Outside Entities in an ongoing effort to obtain assurances these Outside
Systems will be Year 2000 compatible well before January 1, 2000.

A listing of critical Outside Entities has been developed which includes
shippers, electrical suppliers, and interconnecting pipelines. The Y2K Team
has contacted these entities to determine their Year 2000 readiness and the
extent to which joint testing or mutual contingency planning is required. All
critical Outside Entities contacted have Year 2000 readiness programs
underway and they expect to be Year 2000 ready before the end of the year.
The assessment of the Year 2000 readiness of critical Outside Entities is an
important factor in the internal contingency planning process.

The processes of inventorying, assessing, analyzing, remediating through
replacement or adequate workarounds, testing, and developing contingency plans
for mission-critical functions in anticipation of the year 2000 are


                                       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


necessarily iterative processes. That is, the steps are repeated as the Y2K
Team learns more about the Year 2000 problem and its effects on internal
systems and on Outside Systems, and about the effects that embedded chips may
have on Northern Border's systems and Outside Systems. As the steps are
repeated, it is likely that new problems will be identified and addressed. TC
PipeLines, LP knows of no specific systems that are susceptible to problems
that can only be identified after January 1, 2000.

Northern Border has in place a contingency plan designed to address specific
Year 2000 related problems including loss of all commercial electrical power,
loss of all commercial telecommunications, and unforeseen failures in
critical systems. In the event of loss of commercial power, all critical
facilities have back up power sources including auxiliary generators and
battery back up except for the two electric powered compressor stations.
Northern Border has its own internal, private communications systems for
voice, data, and SCADA traffic. All of the communications sites have back-up
power sources. Northern Border also has a redundant back-up site for critical
operation and systems functions. All compressor facilities will be manned at
year end so that unforeseen issues can be dealt with immediately.

Northern Border has not incurred material historical costs associated with
the Year 2000 issues. Further, TC PipeLines, LP believes that Northern
Border's future costs of implementing the Plan will not be material. Although
TC PipeLines, LP believes Northern Border's estimates are reasonable, there
can be no assurance, for the reasons stated in the following paragraph, that
the actual costs of implementing the Plan will not differ materially from the
estimated costs or that Northern Border will not be adversely affected by
Year 2000 issues.

The extent and magnitude of the Year 2000 problem as it may affect Northern
Border, both before and for some period after January 1, 2000, are difficult
to predict or quantify for a number of reasons. Among the most important is
the potential complexity of locating embedded microprocessors that may be in
a great variety of hardware used for process or flow control, environmental,
transportation, access, communications and other systems. TC PipeLines, LP
believes that Northern Border will be able to identify and remediate
mission-critical systems containing embedded microprocessors. Other important
difficulties relate to the lack of control over and difficulty inventorying,
assessing, remediating, verifying and testing Outside Systems; the complexity
of evaluating all software (computer code) internal to Northern Border that
may not be Year 2000 compatible; and the potential limited availability of
certain necessary internal or external resources, including but not limited
to trained hardware and software engineers, technicians and other personnel
to perform adequate remediation, verification and testing of internal systems
or Outside Systems. Year 2000 costs are difficult to estimate accurately
because of unanticipated vendor delays, technical difficulties, the impact of
tests of Outside Systems, and similar events. There can be no assurance for
example that all Outside Systems will be adequately remediated so that they
are Year 2000 ready by January 1, 2000, or by some earlier date, so as not to
create a material disruption to business. If, despite diligent, prudent
efforts under the Plan, there are Year 2000-related failures that create
substantial disruptions to Northern Border's business, the adverse impact
could be material. Moreover, the estimated costs of pursuing the current
course of action do not take into account the costs, if any, that might be
incurred as a result of Year 2000-related failures that occur despite
implementation of the Plan, as it may be modified over time.

In an SEC release regarding Year 2000 disclosures, the SEC stated that
public companies must disclose the most reasonably likely worst case Year
2000 scenario. Analysis of the most reasonably likely worst case Year 2000
scenarios Northern Border may face leads to contemplation of the following
possibilities: widespread failure of electrical, gas, and similar supplies by
utilities serving Northern Border; widespread disruption of the services of
communications common carriers; similar disruption to means and modes of
transportation for Northern Border and its employees, contractors, suppliers,
and customers; significant disruption to Northern Border's ability to gain
access to, and remain working in, office buildings and other facilities; and
the failure of Outside Systems, the effects of which would have a cumulative
material adverse impact on Northern Border's mission-critical systems. Among
other things, Northern Border could face substantial claims due to service


                                       14
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONTINUED)

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

                                TC PIPELINES, LP


interruptions, inability to fulfill contractual obligations, inability to
account for certain revenues or obligations or to bill shippers accurately
and on a timely basis, and increased expenses associated with litigation,
stabilization of operations following mission-critical failures, and the
execution of contingency plans. Northern Border could also experience an
inability by shippers to pay, on a timely basis or at all, obligations owed
to Northern Border. Under these circumstances, the adverse effect on Northern
Border, and the diminution of its revenues, would be material, although not
quantifiable at this time. Northern Border will continue to monitor business
conditions to assess and quantify material adverse effects, if any, that
result or may result from the Year 2000 problem.

This discussion under the heading "Year 2000" constitutes a year 2000
readiness disclosure under the Year 2000 Information and Readiness Disclosure
Act. Compliance with the Year 2000 Information and Readiness Disclosure Act
does not limit or otherwise affect any claims or actions under the federal
securities laws.


                                       15
<PAGE>

                    PART I. FINANCIAL INFORMATION (CONCLUDED)

       ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

                                TC PIPELINES, LP


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

Northern Border's interest rate exposure results from its variable rate
borrowings from commercial banks. To mitigate potential fluctuations in
interest rates, Northern Border attempts to maintain a significant portion of
its consolidated debt portfolio in fixed rate debt. Northern Border also uses
an interest rate swap agreement to increase the portion of its fixed rate
debt and uses interest rate forward agreements to establish an approximate
effective borrowing rate for anticipated long-term debt issuances.

If interest rates average one percentage point more than rates in effect as
of December 31, 1998, Northern Border's annual interest expense would
increase by approximately $5.2 million. This amount has been determined by
considering the impact of the hypothetical interest rates on Northern
Border's variable rate borrowings and interest rate swap agreements
outstanding as of December 31, 1998. Northern Border's tariff provides the
pipeline an opportunity to recover, among other items, interest expense.
Therefore, TC PipeLines, LP believes that Northern Border would be allowed to
recover the increase in its interest expense, if it were to occur. Thus,
there would not be any material impact on Northern Border's annual earnings
and cash flow from a hypothetical one percentage point increase in interest
rates. As of June 30, 1999, there has not been any material changes to
Northern Border's interest rate exposure as compared to December 31, 1998.


                                       16
<PAGE>

                           PART II. OTHER INFORMATION

                                TC PIPELINES, LP


ITEM 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits.

     None.

(b)  Reports on Form 8-K.

     None.


                                       17
<PAGE>

                                   SIGNATURES


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

                                  TC PIPELINES, LP
                                  (a Delaware Limited Partnership)

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

                                  By: /s/
                                      -------------------------------------
Date: August 6, 1999                  Theresa Jang
                                      Controller


                                       18