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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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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, 2000

or

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 1-10934

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LAKEHEAD PIPE LINE PARTNERS, L.P.(Exact name of Registrant as specified in its charter)

Delaware(State or other jurisdiction of
incorporation or organization)

39-1715850(I.R.S. Employer
Identification No.)


Lake Superior Place
21 West Superior Street
Duluth, MN 55802-2067(Address of principal executive offices and zip code)

(218) 725-0100(Registrant's telephone number, including area code)

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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 / /

The
Registrant had 24,990,000 Class A Common Units outstanding as at November 7, 2000.

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TABLE OF CONTENTS

|                             |  |                                                                                                                 |  | Page
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | ----
|PART IFINANCIAL INFORMATION
|Item 1.                      |  | Financial Statements                                                                                            |  |     
|                             |  | Consolidated Statement of Income for the three month and nine month periods
  ended September 30, 2000 and 1999 |  | 1   
|                             |  | Consolidated Statement of Cash Flows for the nine month periods ended
  September 30, 2000 and 1999             |  | 2   
|                             |  | Consolidated Statement of Financial Position as at September 30, 2000 and
  December 31, 1999                   |  | 3   
|                             |  | Consolidated Statement of Partners' Capital for the nine month period ended
  September 30, 2000                |  | 4   
|                             |  | Notes to the Consolidated Financial Statements                                                                  |  | 5   
|Item 2.                      |  | Management's Discussion and Analysis of Financial Condition and Results of
  Operations                         |  | 7   
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                                                      |  | 10  
|PART IIOTHER INFORMATION   
|Item 1.                      |  | Legal Proceedings                                                                                               |  | 11  
|Item 6.                      |  | Exhibits and Reports on Form 8-K                                                                                |  | 12  
|Signature                    |  | 13                                                                                                             
|                             |  |                                                                                                                 |  |     

This Quarterly Report on Form 10-Q contains forward-looking statements. These statements are based on the Lakehead Pipe Line Partners,
L.P.'s (the "Registrant" or "Partnership") beliefs as well as assumptions made by and information currently available to the Partnership. When used in this document, the words "anticipate," "believe,"
"expect," "estimate," "forecast," "project," and similar expressions identify forward-looking statements. These statements reflect the Partnership's current views with respect to future events and are
subject to various risks, uncertainties and assumptions including:



If one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this
Form 10-Q. Except as required by applicable securities laws, the Partnership does not intend to update these forward-looking statements. For additional discussion of such risks,
uncertainties and assumptions, see the Partnership's 1999 Annual Report on Form 10-K.

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PART IFINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

LAKEHEAD PIPE LINE PARTNERS, L.P.

CONSOLIDATED STATEMENT OF INCOME

|                                         |                              | Three months ended
September 30, |       | Nine months ended
September 30, |  
|---------------------------------------- | ---------------------------- | -------------------------------- | ----- | ------------------------------- | -
|
|
|Operating Revenue                        |                              | $                                | 74.9  |                                 | $
|                                         |                              |                                  |       |                                 |  
|Expenses                                 |                              |                                  |       |                                 |  
|                                         | Power                        |                                  |       | 10.8                            |  
|                                         | Operating and administrative |                                  |       | 19.8                            |  
|                                         | Depreciation                 |                                  |       | 15.3                            |  
|                                         |                              |                                  |       |                                 |  
|                                         |                              |                                  | 45.9  |                                 |  
|                                         |                              |                                  |       |                                 |  
|Operating Income                         |                              |                                  | 29.0  |                                 |  
|Interest and Other Income                |                              |                                  | 0.5   |                                 |  
|Interest Expense                         |                              |                                  | (15.1 | )                               |  
|Minority Interest                        |                              |                                  | (0.2  | )                               |  
|                                         |                              |                                  |       |                                 |  
|Net Income                               |                              | $                                | 14.2  |                                 | $
|                                         |                              |                                  |       |                                 |  
|Net Income Per Unit(Note 3)              |                              | $                                | 0.42  |                                 | $
|                                         |                              |                                  |       |                                 |  
|Cash Distributions Paid Per Unit(Note 4) |                              | $                                | 0.875 |                                 | $
|                                         |                              |                                  |       |                                 |  

See accompanying notes to the consolidated financial statements.

1

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LAKEHEAD PIPE LINE PARTNERS, L.P.

CONSOLIDATED STATEMENT OF CASH FLOWS

|                                                 |                                                                                 | Nine months ended
September 30,              |                                                     
|------------------------------------------------ | ------------------------------------------------------------------------------- | -------------------------------------------- | ----------------------------------------------------
|
|
|Cash Provided from Operating Activities          |                                                                                 |                                              |                                                     
|                                                 | Net income                                                                      |                                              | $                                                   
|                                                 | Adjustments to reconcile net income to cash provided from operating activities: |                                              |                                                     
|                                                 |                                                                                 | Depreciation                                 |                                                     
|                                                 |                                                                                 | Interest on accrued rate refunds(Note 5)     |                                                     
|                                                 |                                                                                 | Minority interest                            |                                                     
|                                                 |                                                                                 | Other                                        |                                                     
|                                                 |                                                                                 | Changes in operating assets and liabilities: |                                                     
|                                                 |                                                                                 |                                              | Accounts receivable and other                       
|                                                 |                                                                                 |                                              | Materials and supplies                              
|                                                 |                                                                                 |                                              | General Partner and affiliates                      
|                                                 |                                                                                 |                                              | Accounts payable and other                          
|                                                 |                                                                                 |                                              | Interest payable                                    
|                                                 |                                                                                 |                                              | Property and other taxes                            
|                                                 |                                                                                 |                                              | Payment of rate refunds and related interest(Note 5)
|                                                 |                                                                                 |                                              |                                                     
|                                                 |                                                                                 |                                              | 98.1                                                
|                                                 |                                                                                 |                                              |                                                     
|Investing Activities                             |                                                                                 |                                              |                                                     
|                                                 | Repayments from affiliate                                                       |                                              |                                                     
|                                                 | Additions to property, plant and equipment                                      |                                              |                                                     
|                                                 | Changes in construction payables                                                |                                              |                                                     
|                                                 |                                                                                 |                                              |                                                     
|                                                 |                                                                                 |                                              | (11.5                                               
|                                                 |                                                                                 |                                              |                                                     
|Financing Activities                             |                                                                                 |                                              |                                                     
|                                                 | Variable rate financing, net                                                    |                                              |                                                     
|                                                 | Proceeds from unit issuance, net(Note 7)                                        |                                              |                                                     
|                                                 | Distributions to partners                                                       |                                              |                                                     
|                                                 | Minority interest and other                                                     |                                              |                                                     
|                                                 |                                                                                 |                                              |                                                     
|                                                 |                                                                                 |                                              | (68.7                                               
|                                                 |                                                                                 |                                              |                                                     
|Increase in Cash and Cash Equivalents*           |                                                                                 |                                              | 17.9                                                
|Cash and Cash Equivalents at Beginning of Period |                                                                                 |                                              | 40.0                                                
|                                                 |                                                                                 |                                              |                                                     
|Cash and Cash Equivalents at End of Period       |                                                                                 | $                                            | 57.9                                                
|                                                 |                                                                                 |                                              |                                                     

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See accompanying notes to the consolidated financial statements.

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LAKEHEAD PIPE LINE PARTNERS, L.P.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

|                                  |                                                                       | September 30,
2000 |         | December 31,
1999 |  
|--------------------------------- | --------------------------------------------------------------------- | ------------------ | ------- | ----------------- | -
|
|ASSETS                            |                                                                      
|Current Assets                    |                                                                       |                    |         |                   |  
|                                  | Cash and cash equivalents                                             |                    | $       | 57.9              |  
|                                  | Advances to affiliate                                                 |                    |         | 6.2               |  
|                                  | Accounts receivable and other                                         |                    |         | 33.3              |  
|                                  | Materials and supplies                                                |                    |         | 7.7               |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    | 105.1   |                   |  
|                                  |                                                                       |                    |         |                   |  
|Deferred Charges and Other        |                                                                       |                    | 9.1     |                   |  
|                                  |                                                                       |                    |         |                   |  
|Property, Plant and Equipment     |                                                                       |                    |         |                   |  
|                                  | At cost                                                               |                    |         | 1,577.7           |  
|                                  | Accumulated depreciation                                              |                    |         | (291.6            | )
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    | 1,286.1 |                   |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       | $                  | 1,400.3 |                   | $
|                                  |                                                                       |                    |         |                   |  
|LIABILITIES AND PARTNERS' CAPITAL |                                                                      
|Current Liabilities               |                                                                       |                    |         |                   |  
|                                  | Due to General Partner and affiliates                                 |                    | $       | 2.2               |  
|                                  | Accounts payable and other                                            |                    |         | 12.2              |  
|                                  | Interest payable                                                      |                    |         | 17.1              |  
|                                  | Property and other taxes                                              |                    |         | 11.9              |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    | 43.4    |                   |  
|Long-Term Debt                    |                                                                       |                    | 799.5   |                   |  
|Minority Interest                 |                                                                       |                    | 3.3     |                   |  
|Contingencies (Note 6)            |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    | 846.2   |                   |  
|                                  |                                                                       |                    |         |                   |  
|Partners' Capital                 |                                                                       |                    |         |                   |  
|                                  | Class A Common Unitholders (Units authorized and
  issued24,990,000) |                    |         | 504.5             |  
|                                  | Class B Common Unitholder (Units authorized and
  issued3,912,750)   |                    |         | 44.2              |  
|                                  | General Partner                                                       |                    |         | 5.4               |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       |                    | 554.1   |                   |  
|                                  |                                                                       |                    |         |                   |  
|                                  |                                                                       | $                  | 1,400.3 |                   | $
|                                  |                                                                       |                    |         |                   |  

See accompanying notes to the consolidated financial statements.

3

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LAKEHEAD PIPE LINE PARTNERS, L.P.

CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL

|                                        |  | Class A
Common
Unitholders |       | Class B
Common
Unitholder |   | General
Partner |   | Total |     
|--------------------------------------- |  | -------------------------- | ----- | ------------------------- | - | --------------- | - | ----- | ----
|
|Partners' Capital at December 31, 1999  |  | $                          | 533.1 |                           | $ | 47.4            |   | $     | 5.6 
|Net Income Allocation                   |  |                            | 37.0  |                           |   | 7.1             |   |       | 6.7 
|Distributions to Partners               |  |                            | (65.6 | )                         |   | (10.3           | ) |       | (6.9
|                                        |  |                            |       |                           |   |                 |   |       |     
|Partners' Capital at September 30, 2000 |  | $                          | 504.5 |                           | $ | 44.2            |   | $     | 5.4 
|                                        |  |                            |       |                           |   |                 |   |       |     

See accompanying notes to the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the
information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, they contain all adjustments which management considers
necessary to present fairly the financial position as at September 30, 2000 and December 31, 1999; the results of operations for the three and nine month periods ended
September 30, 2000 and 1999; and cash flows for the nine month periods ended September 30, 2000 and 1999. The results of operations for the nine months ended September 30, 2000
should not be taken as indicative of the results to be expected for the full year. The interim financial statements should be read in conjunction with the Partnership's consolidated financial
statements and notes thereto presented in the Partnership's 1999 Annual Report on Form 10-K.

2.  Comparative Amounts

Certain comparative amounts are reclassified to conform with the current period's financial statement presentation.

3.  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 Class A
and Class B Common Units outstanding. The General Partner's allocation is equal to an amount based upon its 1% general partner interest, adjusted to reflect an amount equal to incentive
distributions and an amount required to reflect depreciation on
the General Partner's historical cost basis for assets contributed on formation of the Partnership. Net income per unit was determined as follows:

|                                                                     |  | Three months ended
September 30, |      | Nine months ended
September 30, |  
|-------------------------------------------------------------------- |  | -------------------------------- | ---- | ------------------------------- | -
|
|
|Net income                                                           |  | $                                | 14.2 |                                 | $
|                                                                     |  |                                  |      |                                 |  
|Net income allocated to General Partner                              |  |                                  | (0.1 | )                               |  
|Incentive distributions and historical cost depreciation adjustments |  |                                  | (2.1 | )                               |  
|                                                                     |  |                                  |      |                                 |  
|                                                                     |  |                                  | (2.2 | )                               |  
|                                                                     |  |                                  |      |                                 |  
|Net income allocable to Common Units                                 |  | $                                | 12.0 |                                 | $
|                                                                     |  |                                  |      |                                 |  
|Weighted Average Common Units outstanding(millions)                  |  |                                  | 28.9 |                                 |  
|                                                                     |  |                                  |      |                                 |  
|Net income per unit                                                  |  | $                                | 0.42 |                                 | $
|                                                                     |  |                                  |      |                                 |  

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4.  Cash Distribution

On October 19, 2000, the Board of Directors of the General Partner declared a cash distribution of $0.875 per unit for the quarter ended
September 30, 2000. The distribution will be made on November 14, 2000 to Unitholders of record on October 31, 2000.

5.  Accrued Rate Refunds and Related Interest

In October 1996, the Federal Energy Regulatory Commission ("FERC") approved a settlement agreement between the Partnership and customer representatives
on all then outstanding contested tariff rates. The agreement resulted in an approximate tariff rate reduction of 6% and total rate refunds and related interest of $120.0 million through the
effective date of October 1, 1996. Refunds required under the agreement began in 1996 with $41.8 million repaid during the fourth quarter of 1996, with the balance repaid through a 10%
reduction in tariff rates. Interest was accrued on the unpaid balance based on the 90-day Treasury Bill rate. Effective November 22, 1999, the 10% reduction in tariff rates was
removed and during December 1999, the $120.0 million and related interest was fully repaid.

6.  Environmental Contingencies

The Partnership is subject to federal and state laws and regulations relating to the protection of the environment. Environmental risk is inherent to liquid
pipeline operations and the Partnership could, at
times, be subject to environmental cleanup and enforcement actions. The General Partner manages this environmental risk through appropriate environmental policies and practices to minimize the impact
to the Partnership. To the extent the Partnership is unable to recover environmental costs in its rates (if not recovered through insurance), the General Partner has agreed to indemnify the
Partnership from and against any costs relating to environmental liabilities associated with the pipeline system prior to its transfer to the Partnership in 1991. This excludes any liabilities
resulting from a change in laws after such transfer. The Partnership continues to voluntarily investigate past leak sites for the purpose of assessing whether any remediation is required in light of
current regulations, and to date no material environmental risks have been identified.

7.  Common Units

On April 28, 1999, the Partnership issued an additional 2,700,000 Class A Common Units, increasing the total number of Class A Common
Units outstanding to 24,990,000. Combined with the General Partner's contribution, the offering provided net proceeds of $119.7 million. Proceeds were used to repay indebtedness under the
Partnership's Revolving Credit Facility incurred to finance pipeline expansion projects.

Prior
to the April 28, 1999 issuance of Class A Common Units, the General Partner held a 1% general partner interest and 14.8% limited partner interest in the
Partnership, as well as a 1% general partner interest in Lakehead Pipe Line Company, Limited Partnership (the "Operating Partnership"). This
resulted in an effective 16.6% combined interest in the Partnership by the General Partner. The Partnership owns a 99% limited partner interest in the Operating Partnership.

Since
the April 28, 1999 issuance of Class A Common Units, the General Partner has held a 1% general partner interest and 13.4% limited partner interest in the
Partnership, as well as a 1% general partner interest in the Operating Partnership. This results in the General Partner holding an effective 15.3% combined interest in the Partnership.

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

Results of Operations

Nine Months Ended September 30, 2000 Compared with Nine Months Ended September 30, 1999

Net income for the nine months ended September 30, 2000, was $50.8 million, or $1.53 per unit, compared to $64.0 million, or $2.06 per
unit, for the same period in 1999. The decline in net income stems primarily from lower pipeline utilization. This decline is a result of low crude oil prices in late 1998 and early 1999 that caused
crude oil producers to limit their investment in oil producing facilities. Coupled with natural declines of crude oil reserves, reduced investment by oil producers has impacted short-term
Partnership results due to lower volumes of crude oil being available for transport. The Partnership expects this situation to improve in 2001 and beyond (see"Future Prospects").

Operating
revenue for the first nine months of 2000 decreased $2.0 million, to $232.0 million, over the corresponding period in 1999 due to declines in deliveries. These
declines were partially offset by increased tariffs (see"General,Tariff Matters") associated with the System Expansion Program II ("SEP II") and the Terrace Expansion
Program ("Terrace"). Deliveries averaged 1.331 million barrels per day for the first nine months of 2000, compared to 1.371 million barrels per day for the same period of 1999. The
shortfall is due to the fact that the supply of crude oil has not recovered to anticipated levels. The crude oil supply was further adversely impacted by the effects of crude oil producer maintenance
shutdowns and wetter than normal weather in western Canada, which impacted oil well tie-ins and other development activities. System utilization, measured in barrel miles, was
254 billion for the first nine months of 2000, compared to 265 billion for the first nine months of last year, reflecting the decline in deliveries.

Expenses
for the first nine months of 2000 increased by $6.5 million from the corresponding period last year as higher operating and administrative costs and higher
depreciation expense were partially offset
by lower power costs. Power costs decreased $4.2 million due to lower throughput volumes. Operating and administrative expense increased $7.8 million primarily due to higher oil
measurement losses, higher property taxes associated with recent expansion projects and lower capitalized charges due to the decrease of construction activity in 2000. Oil measurement losses for the
first nine months of 2000 were approximately $4.2 million higher compared to the 1999 period, partially due to the increase in crude oil prices. Depreciation expense increased
$2.9 million primarily due to placing the Terrace Phase I project in service on April 1, 1999.

Interest
expense for the first nine months of 2000 was $4.9 million higher than the same period of 1999 primarily due to lower capitalized interest resulting from less
construction activity during 2000.

Three Months Ended September 30, 2000 Compared with Three Months Ended September 30, 1999

Net income for the three months ended September 30, 2000, was $14.2 million, or $0.42 per unit, compared to $19.8 million, or $0.60 per
unit, for the same period last year. The decline in quarterly results relates to the factors noted in the previous section.

Operating
revenue for the third quarter of 2000 was $74.9 million, a decrease of $4.7 million over the corresponding period in 1999, due to a decline in deliveries.
Deliveries averaged 1.272 million barrels per day for the third quarter of 2000, compared to 1.343 million barrels per day for the same period of 1999. As previously noted, the reduction
stems primarily from the fact that supply has not recovered to anticipated levels. System utilization, measured in barrel miles, was 82 billion for the third quarter of 2000, compared to
89 billion for the same period in 1999, reflecting the decline in deliveries.

Expenses
for the three months ended September 30, 2000, decreased $0.3 million from the corresponding period in 1999 due to decreased power costs which were partially
offset by increased depreciation and operating and administrative costs. Power costs decreased $1.9 million due to lower

7

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throughput volumes. The increase in operating and administrative costs of $1.1 million was due to higher oil loss measurement experience, a reduction in capitalized charges due to lower capital
expenditures and higher costs for rents and leases. Depreciation costs increased $0.5 million primarily due to 1999 capital additions.

Interest
expense for the third quarter of 2000 was $1.2 million higher than the same period of 1999 primarily due to higher interest rates and higher debt balances related to
recent expansion projects.

The
results of operations for the three month and nine month periods ended September 30, 2000 should not be taken as indicative of the results of operations expected for the
full year.

Liquidity and Capital Resources

The Partnership anticipates that it will continue to have adequate liquidity to fund future recurring operating, investing and financing activities. The
Partnership intends to fund ongoing capital expenditures with borrowings, cash generated from operating activities, existing cash and cash equivalents and the proceeds from future equity and debt
offerings. Cash distributions are expected to be funded with internally generated cash. The Partnership's ability to make future debt and equity offerings will depend on prevailing market conditions,
interest rates and the financial condition of the Partnership.

At
September 30, 2000, cash and cash equivalents totaled $57.9 million, compared to $40.0 million at December 31, 1999, as cash generated from operating
activities exceeded cash required for distributions and capital related expenditures. Of this $57.9 million, $27.9 million (or $0.875 per unit) will be used for the cash distribution
payable November 14, 2000, with the remaining $30.0 million available for capital expenditures or other business needs.

Cash
flow from operating activities for the first nine months of 2000 was $98.1 million, compared to $86.9 million for the same period last year. The primary cause of
this increase, $23.1 million, is attributable to the elimination of the rate refunds and related interest associated with the 1996 settlement agreement. The rate refund obligation was fully
repaid during 1999 and the 10% tariff credit was cancelled effective November 22, 1999. This increase is partially offset by a $13.2 million reduction in net income in the year 2000.

The
Partnership anticipates spending approximately $13.0 million for pipeline system enhancements and $12.0 million for core maintenance activities in 2000. Excluding
major expansion projects, ongoing capital expenditures are expected to average approximately $20.0 million on an annual basis (approximately 50% for core maintenance and 50% for enhancement of
the pipeline system). Core maintenance activities, such as the replacement of equipment and preventive maintenance programs,
will be undertaken to enable the Partnership's pipeline system to operate at its maximum sustainable operating capacity. Enhancements to the pipeline system, such as renewal and replacement of pipe,
are expected to extend the life of the Lakehead System and permit the Partnership to respond to developing industry and government standards and the changing service expectations of its customers.

General

Future Prospects

Income and cash flows of the Partnership are sensitive to oil industry supply and demand in Canada and the United States and the regulatory environment. As the
Partnership's pipeline system is operationally integrated with the Enbridge Pipelines Inc. ("Enbridge") system in western Canada, the Partnership's revenues are dependent upon the utilization
of the Enbridge system by producers of western Canadian crude oil.

8

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The outlook for future growth is believed to be positive for the Partnership. Although crude oil prices have been strong for the past year, exploration and production activity
initially lagged, as producers of western Canadian crude oil were cautious to invest in new production. As a result, total crude oil production in the western Canadian region declined in excess of
200,000 barrels per day in 1999, due to the curtailment of exploration and production activity. During the last few months, production has increased modestly and the outlook is for continuing growth.
As a leading indicator for crude oil production, oil well completions have more than doubled from last year, as approximately 3,900 wells were completed in the first nine months of 2000 compared with
1,500 wells during the same period last year. Although there has been a bias toward natural gas drilling, crude oil exploration is now on the rise and this trend is expected to continue through 2001.
This resurgence is also supported by external forecasts for oil prices over the next several years. Forecasts for the West Texas Intermediate crude oil benchmark are in the
low-to-mid-twenty dollars per barrel range. The Partnership believes that these prices are sufficient to sustain continued growth in crude oil production from the
Western Canadian Sedimentary Basin, particularly from the Alberta Oil Sands. Despite the increase in drilling activity over the last nine months, there is a lag between developing additional crude
supplies and bringing those supplies on-stream to the pipeline system. As a result, it is anticipated that fourth quarter average daily deliveries on the Lakehead System will be modestly
higher than the first nine months of 2000. However, increased operating revenue will likely be more than offset by higher line inspection and
maintenance expenditures, which are traditionally completed in the fourth quarter. As a result, on an annual basis, the Partnership expects 2000 net income of approximately $65 million. This
level of earnings could be adversely impacted by delays in completing a turnaround at a producer's oil sands plant, adverse weather conditions, unforeseen supply interruptions or other factors beyond
the Partnership's control.

The
Partnership believes that its intermediate-term outlook of increasing demand for transportation services on the System has been confirmed by the Canadian Association
of Petroleum Producers' recent approval of the Terrace Expansion Program Phase II. The project is designed to add 40,000 barrels per day of additional heavy crude oil capacity to the Enbridge system
in western Canada by the first half of 2002. Forecast production, for which the phase is designed, is expected to access U.S. Midwest refineries via the Lakehead System. The Partnership is currently
forecasting that record delivery levels will be achieved by the end of 2001 and that existing capacity will be fully utilized by 2002, when the incremental Phase II capacity is projected to become
available.

In
the long-term, the Partnership is well positioned to benefit from increases in crude oil supply through a combination of existing capacity and planned future expansion.
Canada has substantial reserves of non-conventional hydrocarbon resources consisting predominantly of oil sands deposits in the province of Alberta. Firms involved in the production of
heavy and synthetic crude oil from the oil sands region of western Canada have announced expansion projects for the next 10 years with value in excess of Cdn $30 billion and representing
over 2 million barrels per day of potential incremental production. If these projects are completed, they are projected to provide substantial increases in the production of heavy and synthetic
crude oil in western Canada in the next several years. If these increases occur, they will support the long-term utilization of the Lakehead System.

Enbridge Line 9

The Enbridge system includes a section referred to as "Line 9" (previously known as the "Montreal Extension") which was reversed in 1999 to flow from Montreal,
Quebec to Sarnia, Ontario. The pipeline delivers off-shore crude oil imported into Quebec, through facilities of Portland Pipe Line Corporation and Montreal Pipe Line Limited, to
refineries in Ontario. Line 9 has an annual capacity of approximately 240,000 barrels per day and for the first nine months of 2000, operated at approximately 203,000 barrels per day. The ongoing
utilization level of the line will be dependent upon global crude oil market dynamics.

9

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The reversal of Line 9 resulted in decreased deliveries of light crude oil from the Lakehead System to Ontario beginning in the second quarter of 1999. Displaced volumes originating
in western Canada are being diverted to other markets in the U.S. Midwest. During the first nine months of 2000, deliveries to Clearbrook, Minnesota and Chicago, Illinois increased compared to the
same period last year, partially offsetting reductions in light crude deliveries to Ontario. Deliveries of U.S. domestic and foreign crude oil volumes between Chicago and Ontario decreased 63,000
barrels per day for first nine months of 2000 as compared to the same period in 1999 due to the reversal of Line 9. The level of decline in deliveries from the Lakehead System to Ontario will be
dependent upon global crude oil market dynamics and the level of utilization of Line 9. For additional discussion on the impact of the Montreal Extension Reversal, see the Partnership's 1999 Annual
Report on Form 10-K.

Tariff Matters

On March 13, 2000, the Partnership filed a new tariff with the FERC, which took effect April 1, 2000. This new tariff reflects the annual
adjustment to the SEP II cost of service surcharge, including an adjustment to reflect the 1999 actual SEP II cost of service and an estimate for 2000. The tariff allows the Partnership to recover the
cost of service for SEP II facilities and earn a return on its SEP II equity investment, which varies with the utilization of SEP II capacity on the Enbridge system in western Canada. During 2000, the
Partnership will earn a 7.5% return on its SEP II equity investment, the minimum provided in the SEP II Tariff Agreement. For 2001, the Partnership is forecasting a return in excess of 10% due to
volume increases.

Effective
July 1, 2000, in compliance with the indexed rate ceilings allowed by FERC, the Partnership increased its rates for transportation by approximately 0.8%. This
increase in tariff rates is not expected to have a material impact on the Partnership.

Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This Statement requires that all derivatives be recognized at fair value in the balance sheet and all changes in fair value be recognized currently in earnings or
deferred as a component of other comprehensive income, depending on the intended use of the derivative, its resulting designation and its effectiveness. The Partnership plans to adopt this Statement
in 2001, as required. Although the Partnership has not determined the potential impact of implementing this Statement, preliminary expectations are for limited effects given the small amount of
derivative activity at Lakehead.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Partnership's financial instrument market risk is primarily impacted by changes in interest rates. The Partnership's exposure to movements in interest
rates is managed through its long-term debt ratio target, its allocation of fixed and floating rate debt, and the use of interest rate risk management agreements. Information about the
Partnership's financial instruments that are sensitive to changes in interest rates has not changed materially from that presented in the Partnership's 1999 Annual Report on
Form 10-K.

As
the Partnership does not own the crude oil and natural gas liquids ("NGL") it transports, its cash flows are not directly impacted by changes in commodity prices. However,
commodity prices have a direct impact on the underlying supply and demand for crude oil and NGL that the Partnership transports.

The
Partnership has minimal foreign exchange risk, and has entered into forward contracts to hedge its exposure to movements of future exchange rates.

The
Partnership does not currently hold or issue derivative instruments for trading or any other speculative purpose.

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PART IIOTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Partnership is a participant in various legal proceedings arising in the ordinary course of business. Some of these proceedings are covered, in whole or in
part, by insurance. The Partnership believes that the outcome of all these proceedings will not, individually or in the aggregate, have a material adverse effect on the financial condition of the
Partnership.

For
information regarding other legal proceedings arising in 2000 or with regard to which material developments were reported during 2000, see Part II. Item 1., "Legal
Proceedings," in the Form 10-Q filed for the quarters ending March 30, 2000 and June 30, 2000.

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ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

27.1  Financial
Data Schedule as of and for the nine months ended September 30, 2000.

No
reports on Form 8-K were filed during the quarter ended September 30, 2000.

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SIGNATURE

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

| |  | LAKEHEAD PIPE LINE PARTNERS, L.P.(Registrant)
| |  | ---------------------------------------------
| |  | By:                                          
| |  | By:                                          
| |  | Dated: November 7, 2000                      

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