UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549 
 FORM 10-Q xQUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934For
the quarterly period ended March 31, 2001 OR   ̈TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIESEXCHANGE ACT OF 1934For
the transition period from______to Commission file number333-59597  Lakehead Pipe Line
  Company, Limited Partnership(Exact name of
  Registrant as specified in its charter)
  Delaware
  39-1715851(State or other
  jurisdiction of
  (I.R.S. Employerincorporation or
  organization)
  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 )  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. YesxNo ̈


TABLE OF CONTENTS PART I. FINANCIAL INFORMATIONItem
  1.
  Financial
  StatementsStatement
  of Income for the three month periods ended March 31, 2001 and 2000Statement
  of Cash Flows for the three month periods ended March 31, 2001 and 2000Statement of Financial
  Positionas at
  March 31, 2001 and December 31, 2000Statement of Partners
  Capital for the three month period ended March 31, 2001Notes to Financial
  StatementsItem
  2.
  Managements
  Discussion and Analysis ofFinancial
  Condition and Results of OperationsItem
  3.
  Quantitative
  and Qualitative Disclosures About Market RiskPART II. OTHER INFORMATIONItem 1.
  Legal
  ProceedingsItem
  6.
  Exhibits and Reports
  on Form 8-KSignature  This
Quarterly Report on Form 10-Q contains forward-looking statements. These
statements are based on the Partnership's 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: 
  the
  Partnership's dependence upon adequate supplies of and demand for western
  Canadian crude oil,
  the
  Partnership's ability to acquire other companies and assets,
  the
  price of crude oil and the willingness of shippers to ship crude oil,
  regulation
  of the Partnership's tariffs by the Federal Energy Regulatory Commission and
  the possibility of
  unfavorable outcomes of future tariff proceedings, and
  the
  effects of competition, in particular, by other pipeline systems. 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 2000 Annual Report on Form
10-K. PART I –
FINANCIAL INFORMATION




ITEM 1.  FINANCIAL STATEMENTS




LAKEHEAD PIPE LINE COMPANY, LIMITED
PARTNERSHIPSTATEMENT OF INCOME




Three months ended
  March 31,(unaudited;
  dollars in millions)
  2001
  2000Operating
  Revenue
  $71.9
  $78.8ExpensesPower
  11.7
  12.5Operating and administrative
  20.1
  17.7Depreciation
  15.4
  15.347.2
  45.5Operating
  Income
  24.7
  33.3Interest
  and Other Income
  0.7
  1.6Interest
  Expense
  (15.2)
  (14.6)Net Income
  $10.2
  $20.3See
accompanying notes to the financial statements.

LAKEHEAD PIPE LINE COMPANY, LIMITED
PARTNERSHIPSTATEMENT OF CASH FLOWS




Three months ended
  March 31,(unaudited;
  dollars in millions)
  2001
  2000Cash Provided from Operating
  ActivitiesNet income
  $10.2
  $20.3Adjustments to reconcile net income to
  cash provided from operating activities:Depreciation
  15.4
  15.3Other
  1.0
  (0.3)Changes in operating assets and liabilities:Accounts receivable and other
  1.7
  3.5Oil Inventory
  2.1
  (1.3)Materials and supplies
  -
  (0.3)General Partner and affiliates
  4.7
  (0.4)Accounts payable and other
  (3.8)
  (0.5)Interest payable
  12.5
  10.3Property and other taxes
  2.9
  2.946.7
  49.5Investing
  ActivitiesAdditions to property, plant and
  equipment
  (2.4)
  (0.2)Repayments from affiliate
  0.1
  0.9Changes in construction payables
  (4.0)
  (0.2)(6.3)
  0.5Financing
  ActivitiesVariable rate financing, net
  -
  (10.0)Debt financing costs
  (0.1)
  -Distributions to partners
  (27.9)
  (27.9)(28.0)
  (37.9)Increase in Cash and Cash Equivalents *
  12.4
  12.1Cash
  and Cash Equivalents at Beginning of Period
  37.2
  40.0Cash
  and Cash Equivalents at End of Period
  $49.6
  $52.1* Cash equivalents are defined as
  all highly marketable securities with a maturity of three months or less when
  purchased.See accompanying notes to the financial statements.LAKEHEAD PIPE LINE COMPANY, LIMITED
PARTNERSHIPSTATEMENT OF FINANCIAL POSITION




(unaudited,
  except for December 31, 2000; dollars in millions)
  March 31,
  2001
  December 31,2000ASSETSCurrent
  AssetsCash and cash equivalents
  $49.6
  $37.2Due from General Partner and affiliates
  -
  1.5Advances to affiliate
  5.8
  5.9Oil inventory
  6.8
  8.9Accounts receivable and other
  24.0
  25.7Materials and supplies
  7.7
  7.793.9
  86.9Deferred
  Charges and Other
  7.0
  7.9Property,
  Plant and EquipmentAt cost
  1,590.9
  1,588.5Accumulated depreciation
  (322.0)
  (306.6)1,268.9
  1,281.9$1,369.8
  $1,376.7LIABILITIES AND PARTNERS' CAPITALCurrent
  LiabilitiesDue to General Partner and affiliates
  $3.2
  $    -Loan from Lakehead Pipe Line Partners,
  L.P
  0.2
  0.2Accounts payable and other
  9.6
  17.4Interest payable
  19.0
  6.5Property and other taxes
  17.3
  14.449.3
  38.5Other
  Deferred Credits
  1.0
  -Long-Term
  Debt
  799.3
  799.3Contingencies
  (Note
  3)849.6
  837.8Partners'
  CapitalLimited Partner
  518.2
  535.7General Partner
  3.0
  3.2Accumulated Other Comprehensive Loss (Notes 4
  & 5)
  (1.0)
  -520.2
  538.9$1,369.8
  $1,376.7See
accompanying notes to the financial statements.

LAKEHEAD PIPE LINE COMPANY, LIMITED
PARTNERSHIPSTATEMENT OF PARTNERS' CAPITAL




(Unaudited,
  except for
  December 31, 2000
  dollars in millions)
  LimitedPartner
  General
  Partner
  Other Comprehensive
  Loss
  TotalPartners' Capital at December 31, 2000
  $535.7
  $3.2
  $ 
  $538.9Net
  Income Allocation
  10.1
  0.1
  
  10.2Distributions
  to Partners
  (27.6)
  (0.3)
  
  (27.9)Floating
  to Fixed Interest Rate Swaps
  
  
  (1.0)
  (1.0)Partners'
  Capital at March 31, 2000
  $518.2
  $3.0
  $(1.0)
  $520.2See accompanying
notes to the financial statements.









NOTES TO THE FINANCIAL STATEMENTS(unaudited)




1.          Basis of Presentation

The accompanying unaudited 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, consisting only of normal recurring
adjustments, which management considers necessary to present fairly the
financial position as at March 31, 2001 and December 31, 2000; the results of
operations for the three month periods ended March 31, 2001 and 2000; and cash
flows for the three month periods ended March 31, 2001 and 2000.  The results of operations for the three
months ended March 31, 2001 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
financial statements and notes thereto presented in the Partnership's 2000
Annual Report on Form 10-K.2.          Comparative Amounts

Certain comparative amounts have been reclassified to
conform with the current quarters financial statement presentation.3.         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 that 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.4.          Adoption of New Accounting Standard

During 2001, the Partnership adopted Statement of
Financial Accounting Standards 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 enters into
forward interest rate agreements, swaps and collars to hedge against the effect
of future interest rate movements on its borrowings.These
agreements meet the criteria for hedge accounting and are being treated as cash
flow hedges under SFAS No. 133.  The
transition adjustment at January 1, 2001 was recorded as a liability and a
reduction in other comprehensive income of $0.1 million.  At March 31, 2001, this liability increased
$0.9 million to $1.0 million due to
revaluation of the floating to fixed interest rate swaps held by the
Partnership and is reflected in Partners Capital on the Consolidated Statement
of Financial Position.  The cumulative
fair value of the interest rate hedges is included as a reduction in other
comprehensive income in the first quarter of 2001. The amounts accumulated in
other comprehensive income are recognized in earnings as settlements of the
swaps occur.  The Partnership does not
intend to settle the forward interest rate swaps until their maturity
date.  Therefore, there is no forecasted
impact to earnings within the next twelve months.5.          Comprehensive Income

Comprehensive
income for the quarter ended March 31, 2001 was $9.2 million (quarter ended
March 31, 2000 - $20.3 million). 
Comprehensive income is the change in equity of a business enterprise
from transactions and other events and circumstances from non-owner sources. It
includes all changes in equity during a period, except those resulting from
investments by owners and distributions to owners. Comprehensive income for the
Partnership includes the earnings for the current period less the impact of the
floating to fixed interest rate swap derivative instruments, described in Note
4 above.ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION 
                         AND RESULTS OF OPERATIONS




Results
of Operations

Net
income for first quarter 2001 was $10.2 million, compared with 2000 first
quarter net income of $20.3 million, a decrease of $10.1 million.  The decrease in net income was a result of
lower operating revenue due to reduced deliveries, a lower tariff related to the System Expansion
Program II (SEP II)and shorter average haul distance, as well
as an increase in oil measurement losses.

Operating revenue for first quarter 2001
was $71.9 million, $6.9 million lower than first quarter 2000. This decline is
primarily attributable to reduced deliveries, a shorter average haul distance
as well as a lower tariff related to SEP II.Deliveries
averaged 1,347,000 barrels per day (bpd) for the first quarter 2001, down 1%
from the 1,362,000 bpd averaged for the first quarter last year.  These lower deliveries, along with one less
pumping day in 2001 compared to first quarter last year, had the impact of
reducing revenue by approximately $1.7 million. The average haul distance during the
first quarter 2001 was shorter, as there was an increase in deliveries to
Clearbrook, Minnesota compared to last year. 
Some of the refineries in the Minneapolis, Minnesota area were
processing more western Canadian heavy crude than last year, due to the
favorable pricing environment for heavy crude. 
The shorter average haul distance had a negative impact on revenue by
approximately $1.0 million.  Finally,
the SEP II tariff was lower in the first quarter 2001, as it was based on full
year deliveries in the April 2000 tariff filing compared to 11 months of
deliveries in the initial April 1999 tariff filing.   Eleven months of deliveries was used in the initial filing, due
to the timing of the in-service date for the project.  As a result, first quarter 2001 revenue was lower by
approximately $1.0 million.  The
Partnership anticipates that deliveries will improve over the remainder of 2001
to average between 1.40 and 1.45 million bpd on a full year basis.  Based on this forecast, the Partnership
estimates net income will be between $75 million and $80 million in 2001.System utilization, measured
in barrel miles, was 83 billion for the first quarter 2001, as compared to 85
billion for last years first quarter, reflecting the decrease in deliveries by
the Partnership and lower average haul.

Total
operating expenses for first quarter 2001 increased $1.7 million, or 3.7%, from
the corresponding period of 2000.  The
increase resulted from higher operating and administrative costs offset
partially by lower power costs.  Operating and
administrative expenses increased primarily due to an increase in oil
measurement losses resulting from oil price differentials and degradation
costs.These increases
were partially offset by lower power costs associated with reduced deliveries.

Interest
expense was $15.2 million for first quarter 2001, compared to $14.6 million for
the same period last year.  The increase
in 2001 reflects the higher interest rate associated with the senior unsecured
notes that were issued in November 2000. 
The rate on these notes is 7.9%, which is higher than the rate on the
bank debt that was repaid with the net proceeds from this issuance.

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 partner capital
contributions and debt offerings.  Cash
distributions are expected to be funded with internally generated cash. The
Partnerships ability to complete future debt offerings and receive partner
capital contributions and the timing of any such transactions will depend on
various factors including prevailing market conditions, interest rates and the
financial condition of the Partnership.

At
March 31, 2001, cash and cash equivalents totaled $49.6 million, as compared to
$37.2 million at December 31, 2000.  Of
this $49.6 million, $27.9 million ($0.875 per unit) will be used for the cash
distribution payable May 15, 2001, with the remaining $21.7 million available
for capital expenditures or other business needs.

Cash
flow from operating activities for first quarter 2001 was $46.7 million, as
compared with $49.5 million for the same period last year.  Cash flow from operating activities
decreased due to lower net income, but was partially offset by changes in
working capital.

The
Partnership anticipates spending approximately $9.0 million for pipeline system
enhancements, $10.0 million for core maintenance, and $9.0 million on expansion
activities in 2001.  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 continue to operate at its maximum 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

The
Partnership believes that it is well positioned for future growth.  This growth is expected to come from two
sources: growth of the existing Lakehead System, and development or acquisition
of complimentary businesses with a similar risk profile to that of the Lakehead
System.

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

The
Partnership recently completed its annual survey of upstream producers related
to the long-term supply potential of liquid hydrocarbons from the western Canadian
basin.  The survey, which is generally
consistent with results of a forecast by the Canadian Association of Petroleum
Producers, indicates that production is expected to climb steadily over the
next several years, as increased heavy and synthetic crude oil are expected to
offset declines in conventional supply. 
This forecast is consistent with the recent request by shippers to
trigger Phase II of the Terrace Expansion Program (Terrace) to increase
capacity by 40,000 barrels per day on the Enbridge Pipelines System.  As well, shippers have requested that
delivery capability of the Lakehead System in the major Chicago-area refining
center be enhanced by late 2003.  Enbridge
and Lakehead are in discussions with customers regarding further system expansion
to handle crude oil transportation requirements in late 2003 and beyond, in
particular, the timing and specifications for Terrace Phase III.  Terrace is a multi-stage expansion program
designed to provide an additional net 350,000 barrels per day of heavy crude
oil transportation capacity on the Lakehead System.

Diversification
of the Partnership's energy transportation business is a key objective of its
strategic plan.  Business development
efforts to grow through the development of complementary businesses and through
acquisitions are a focus of the strategic plan.  The Partnership regularly analyzes and discusses with others
potential acquisitions, some of which may be significant relative to its
current size.  The Partnership intends
to finance its acquisition activities through a combination of new financing,
but its growth may be restrained if debt and equity capital are not available
to it on acceptable terms or if it cannot obtain necessary approvals, including
any required special committee approvals.

On
March 8, 2001, the Partnership announced a definitive agreement to acquire the
assets of Enbridge Pipelines (North Dakota) from its affiliate, Enbridge Inc.
("Enbridge").  The assets
consist of a 950-mile crude oil pipeline system with capacity of 84,000 barrels
per day, which transports crude oil from Montana, North Dakota and western
Canadian oil fields to the Lakehead System and a connecting carrier at
Clearbrook, Minnesota.  The purchase
price for this transaction is approximately $33.0 million, and the closing is
expected to occur in late May 2001. The terms of this acquisition were
negotiated and approved by a special committee of independent directors of the
general partner.

The
Partnership may in the future acquire other mature energy transportation assets
from Enbridge. Those acquisitions may include a portion of the assets recently
acquired by Enbridge in connection with its acquisition of Midcoast Energy
Resources Inc. of Houston in a transaction valued at approximately $600
million. Midcoast transports, gathers, processes and markets natural gas and
other petroleum products through over 80 company-owned pipelines covering
approximately 4,100 miles in 10 states, the Gulf of Mexico and Canada.

Neither
the Partnership nor Enbridge has identified any particular assets owned by
Enbridge for transfer to the Partnership, and no proposal for an acquisition of
any of these assets is currently pending. The Partnership cannot predict which,
if any, energy transportation assets owned by Enbridge it may ultimately
acquire or the terms of any such acquisitions. Any acquisitions from Enbridge
will depend on a number of factors including the availability of acceptable
alternative acquisition opportunities from third parties and the Partnership's
financing capability at the time acquisition opportunities may arise.

Regulatory
Issues

On
March 20, 2001, the Partnership filed a new tariff with the Federal Energy
Regulatory Commission (FERC), which took effect April 1, 2001.  This new tariff reflects the annual
adjustment to the SEP II surcharge, including a true-up of the 2000 actual SEP
II cost of service, along with an estimate for 2001.  The amount of the true-up of the 2000 actual SEP II cost of
service was $7.1 million, including interest. 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 2001, the Partnership will earn a 7.5% return on its SEP II
equity investment, the minimum provided in the SEP II Tariff Agreement.  The filing also included a reallocation of
the Terrace fixed toll of Cdn. $0.05 per barrel between the Partnership and
Enbridge Pipelines Inc.  Effective April
1, 2001, these two parties agreed to reallocate the toll surcharge, Cdn. $0.04
($0.026 U.S.) to the Partnership and Cdn. $0.01 to Enbridge Pipelines Inc.  This re-allocation is permitted under the
terms of the Tariff Agreement.

Houston
Texas Office

On
May 14, 2001, the Partnership announced the intention to relocate all of the
administrative support functions provided by its Duluth, Minnesota office to
Houston, Texas.  The relocation is
expected to be completed by January 1, 2002. 
The Partnership estimates that its share of these relocation costs may
range from $2.0 to $5.0 million.  The
costs to the Partnership of the relocation are not expected to adversely affect
the Partnership's ability to make cash distributions at the current rate.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE
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 from that presented in the Partnerships 2000
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 which impacts volumes transported by
the Partnership.

The Partnership does not currently hold
or issue derivative instruments for trading or speculative purposes.



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 I. Item 3., "Legal Proceedings," in
the Partnerships 2000 Annual Report on Form 10-K.



ITEM 6. 
EXHIBITS AND REPORTS ON FORM
8-K




a)
  ExhibitsNone.b)
  Reports on Form 8-KA report on Form 8-K was filed
  March 13, 2001, submitting a press release dated March 8, 2001, announcing
  Board of Director approval for the acquisition of 100% of Enbridge Pipelines
  (North Dakota) Inc.A report of Form 8-K was filed
  April 27, 2001, submitting an audited Consolidated Statement of Financial
  Position of Lakehead Pipe Line Company, Inc., the General Partner of Lakehead
  Pipe Line Partners, L.P., at December 31, 2000 and 1999, together with the
  report of Independent Public Accountants.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 Company, Limited Partnership(Registrant)By:
  Lakehead Pipe Line
  Company, Inc.
  as General Partner/s/  J. L.
  BalkoJ.L.
  BalkoChief Accountant(Principal
  Financial andAccounting Officer)Dated:  May 14 , 2001