<PAGE>   1
                                                                  1996 FORM 10-K
                                                                  EXHIBIT 10.16
                               FIRST AMENDMENT TO
                              AMENDED AND RESTATED
                           REVOLVING CREDIT AGREEMENT





         This FIRST AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT
  AGREEMENT (as the same may be amended, modified, or supplemented from time to
  time, this "Amendment") is entered into and effective as of the 6th day of
  September, 1996 by and among LAKEHEAD PIPE LINE COMPANY, INC., a Delaware
  corporation (the "General Partner"), LAKEHEAD PIPE LINE PARTNERS, L.P., a
  Delaware limited partnership (the "MLP"), LAKEHEAD SERVICES LIMITED
  PARTNERSHIP, a Delaware limited partnership (the "Services Partnership"),
  LAKEHEAD PIPE LINE COMPANY, LIMITED PARTNERSHIP, a Delaware limited
  partnership (the "Operating Partnership," and, together with the MLP and the
  Services Partnership, collectively the "Borrowers"); BANK OF MONTREAL, a
  Canadian chartered bank, THE TORONTO-DOMINION BANK, a Canadian chartered
  bank, CANADIAN IMPERIAL BANK OF COMMERCE, a Canadian chartered bank, ABN AMRO
  BANK, N.V., CAYMAN ISLANDS BRANCH; and said BANK OF MONTREAL as Agent for the
  Banks.

                                   WITNESETH:

        WHEREAS, the General Partner, the Borrowers, the Banks, the Agent, and
  the Collateral Agent have entered into that certain Amended and Restated
  Credit Agreement dated as of September 6, 1996 (as the same may be amended,
  modified, or supplemented from time to time, the "Credit Agreement"); and

        WHEREAS, the Credit Agreement has been executed by the parties thereto
  in amendment and restatement of the Existing Credit Agreement; and

<PAGE>   2
        WHEREAS, the Existing Credit Agreement provides for "Revolving Loans"
(as defined in the Existing Credit Agreement), and for the conversion   of such
Revolving Loans to term loans; and

       WHEREAS, the Credit Agreement provides for, inter alia, the continuance
of such revolving facility and Revolving Loans; and

       WHEREAS, the General Partner, the Borrowers, the Banks, and the Agent
have agreed, and hereby agree, to amend the Credit Agreement to the extent
necessary to provide for the conversion of one or more Loans into one or more
term loans (each a "Term Loan," and collectively, the "Term Loans") such that
the credit facility under the Credit Agreement shall, during the term of this
Amendment, provide for a revolving credit and term loan facility as does the
Existing Credit Agreement.

       NOW, THEREFORE, the General Partner, the Borrowers, the Banks, and the
Agent hereby agree as follows:

       1.    Capitalized terms used herein (including in the recitals
hereinabove) and not otherwise defined herein shall have the meanings
respectively assigned to such terms in the Credit Agreement.

       2.    In accordance with Section 2.01 of the Credit Agreement, the Agent
has the right to forward to the Borrowers a Notice of Non-Continuation
specifying a Potential Loan  Maturity Date, and the Borrowers have the right to
replace any Electing Banks.  In the event that after receipt of a Notice of
Non-Continuation, the Agent and each Electing Bank do not, prior to the
Applicable Anniversary Date, receive a Notice of Replacement as contemplated by
said Section 2.01 of the Credit Agreement, then, notwithstanding anything
contained in said Section 2.01 of the Credit Agreement or elsewhere to the
contrary, all Loans then outstanding shall, without any further action of any
kind, be automatically converted to Term Loans to the respective Borrower or
Borrowers of
                                       2
<PAGE>   3

 such Loans on such Applicable Anniversary Date upon the receipt of a
 certificate from each such Borrower certifying that as of such date of
 conversion (a) No Event of Default has occurred and is continuing, (ii) the
 representation and warranty contained in Section 5.04 of the Credit Agreement
 is true and correct, and (c) with respect to any Term Loan to be secured by
 Qualifying Securities, the value of the Qualifying Securities in which the
 Collateral Agent will have a first perfected security interest
 contemporaneously with the conversion of such Loan or Loans to a Term Loan or
 Term Loans shall be no less than the Required Collateral Amount for each such
 Term Loan.

         3.     Additionally, each Borrower shall have the option, on any one
 or more Business Day(s) to convert all or a portion equal to not less than
 $25,000,000 of the outstanding principal amount of the Loans to a Term Loan or
 Term Loans by such Borrower's providing the Agent (a) (i) at least two
 Business Days' prior notice in the case of a conversion to Term Loans bearing
 interest at the LIBOR   Rate or the CD Rate, or (ii) notice on the same day,
 in the case of a conversion to Prime Rate Loans and (b) a certificate from
 such Borrower certifying that as of such date of conversion (i) No Event of
 Default has occurred and is continuing, (ii) the representation and warranty
 contained in Section 5.04 of the Credit Agreement is true and correct, and
 (iii) with respect to any Term Loan to be secured by Qualifying Securities,
 the value of the Qualifying Securities in which the Collateral Agent will have
 a first perfected security interest contemporaneously with the conversion of
 such Loan or Loans to a Term Loan or Term Loans shall be no less than the
 Required Collateral Amount for each such Term Loan.

        4.      It is expressly agreed and understood that the Total Loan
 Commitment shall not be reduced by the principal amount of the Loan or Loans
 converted to a Term Loan or Term Loans pursuant to this Amendment.

        5.      The Term Loans shall be evidenced by the Existing Notes, shall
 be deemed to be "Loans" under and governed by the Credit Agreement as amended
 hereby, and shall constitute Funded Debt, the principal of which is payable
 quarterly pursuant to Paragraph 7 hereof.

                                       3
<PAGE>   4
        6.      Accrued interest on the Term Loans shall be due and payable
thereon, without duplication, on each of the following dates: (a) on the
maturity thereof; (b) on the date of any payment or prepayment, in whole or in
part, of the principal thereof; and (c) on each "Interest Payment Date"
(hereinafter defined).  For purposes hereof, the terms "Interest Payment Date"
and "Interest Period" shall have the meanings, respectively, assigned to them
in the Credit Agreement, except that references therein to CD Rate Loan, LIBOR
Rate Loan and Prime Rate Loan shall be deemed to be references to Term Loans
bearing interest at the CD Rate, LIBOR Rate and Prime Rate, respectively.

        7.      Mandatory prepayments of the principal amount of each Term Loan
shall be due and payable in respect of such Term Loan in equal quarterly
installments on the last day of each calendar quarter during the "Term"
(hereinafter defined) of such Term Loan, commencing on the last day of the
first quarter (or part thereof) during the Term applicable to each such Term
Loan.  "Term" shall mean, as to each Term Loan, that period beginning on the
date of conversion to such Term Loan pursuant to Paragraphs 2 or 3 of this
Amendment and ending (a) if on the date of conversion to a Term Loan, the Loan
Maturity Date has not been established pursuant to the Credit Agreement, on the
first Potential Loan Maturity Date which, pursuant to Section 2.01 of the
Credit Agreement, could be, as of such date of determination, specified by the
Agent to the Borrowers in a Notice of Non-Continuation or (b) if on the date of
such conversion, the Loan Maturity Date has been so established, the Loan
Maturity Date.  The foregoing notwithstanding, to the extent the Borrowers
convert any one or more of the Term Loans to Loans in accordance with Paragraph
8 hereinbelow, such Loans shall thereafter be subject to repayment in
accordance with the Note or Notes evidencing the same.

       8.      Each Borrower shall have the right at any time prior to the
termination of this Amendment to convert the outstanding principal amount of
any Term Loan owing by such Borrower to a Loan or Loans (which Loans will be
governed by the Credit Agreement) by such Borrower's (i) providing the Agent
(a) at least two Business Days' prior notice in the case of a conversion to
Loans bearing interest at the LIBOR Rate or the CD Rate, or (b) notice on the
same
                                       4
<PAGE>   5

     day, in the case of a conversion to Prime Rate Loans, in the form of
     Exhibit "C" to the Credit Agreement.

             9.    Each Borrower shall have the right, at any time and from
     time to time, at its option, to prepay any Term Loan in whole or in part
     from time to time, without premium or penalty (except for breakage costs
     to the extent set forth in Section 3.04(c) of the Credit Agreement).  Any
     such optional prepayments shall be applied to principal installments in
     their inverse order of maturity and any payment or prepayment on any Term
     Loan shall reduce (a) the Total Loan Commitment by the amount of such
     payment or prepayment and (b) each Bank's Loan Commitment by an amount
     equal to such Bank's Participation Percentage multiplied by the amount of
     such payment or prepayment.  Amounts so paid or prepaid may not be
     reborrowed.  In connection with the foregoing, the parties hereto
     acknowledge that a conversion of Term Loans to Loans shall not constitute
     a prepayment or payment thereof but rather a continuation thereof as a
     Loan or Loans.

            10.    The parties hereto hereby agree that any automatic reduction
     in the Total Loan Commitment pursuant to Section 7.05 of the Credit
     Agreement shall be without duplication of any reduction in the Total Loan
     Commitment as a result of any repayments of Loans under the Credit
     Agreement.

            11.    Interest shall cease to accrue on all amounts prepaid,
     whether pursuant to Paragraphs 7 or 9 hereof.

            12.    All principal prepayments (whether pursuant to Paragraphs 7
     or 9 hereof) of the Term Loans shall be applied pro rata to the Term Loans
     owing by such Borrower to all Banks.

            13.    At no time shall the principal amount of the Term Loans and
     the Loans then outstanding exceed, in the aggregate, the amount of the
     Total Loan Commitment as such Total Loan Commitment may be reduced
     pursuant to the terms hereof and of the Credit Agreement.

                                       5
<PAGE>   6

          14.     In connection with this Amendment, the parties hereto
  acknowledge and agree that the Loans and the Term Loans, while representing,
  respectively, revolving loans and term loans, evidence but one and the same
  indebtedness advanced by the Banks to the Borrowers pursuant to the Existing
  Credit Agreement and continued pursuant to the Credit Agreement.  In
  connection with the foregoing, the parties hereto expressly acknowledge and
  agree that notwithstanding anything contained herein or elsewhere to the
  contrary or seemingly to the contrary, neither the conversion of any one or
  more Loans into one or more Term Loans nor the conversion of one or more Term
  Loans into Loans pursuant to this Amendment shall constitute repayment of the
  indebtedness evidenced thereby.

          15.     This Amendment is an instrument furnished in connection with
  the transactions contemplated by the Credit Agreement.  Each of the General
  Partner and each of the Borrowers severally represents and warrants, each for
  itself and not otherwise, that as of the date hereof, each of the
  representations and warranties set forth in Article V of the Credit Agreement
  is true and correct.

         16.     This Amendment shall terminate and be of no further force and
  effect (a) upon the termination of the Credit Agreement, or (b) if earlier,
  upon written notice by the Borrowers to the Agent; it being expressly agreed
  and understood that termination of this Amendment pursuant to foregoing
  clause (b) shall in not, in any way, affect the term or effectiveness, or
  constitute a termination, of the Credit Agreement.  Any reduction in the
  Total Loan Commitment pursuant to the terms of this Amendment shall continue
  in effect notwithstanding termination of this Amendment.

         17.     The Credit Agreement, as amended hereby, shall continue in
  full force and effect.  The Credit Agreement and this Amendment, during its
  term, shall be read, taken, and construed as one and the same instrument.


                                        6
<PAGE>   7
             18.     This Amendment may be signed in any number of
     counterparts, and by different parties on separate counterparts, each of
     which shall be construed as an original, but all of which taken together
     shall constitute but one and the same instrument.  This Amendment shall be
     effective as of the date hereof when counterparts hereof executed by each
     of the parties hereto shall have been delivered to the Agent.

             19.     The parties hereto agree and intend that this Amendment
     shall be governed by, and construed in accordance with, the law of the
     State of New York.

             20.     This Amendment, the Credit Agreement and the other Loan
     Documents represent the final agreement between the parties and may not be
     contradicted by evidence of prior, contemporaneous or subsequent oral
     agreements of the parties.





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<PAGE>   8
         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
   be executed and delivered by their respective officer or officers thereunto
   duly authorized.


                                LAKEHEAD PIPE LINE COMPANY, INC.


                                By:     Paul W. Norgren
                                        ----------------------------
                                        Name: Paul W. Norgren 
                                              ----------------------
                                        Title: Secretary
                                               ---------------------

                                By:     S. Q. DeVinck
                                        ----------------------------
                                        Name: S. Q. DeVinck             
                                              ----------------------
                                        Title: Chief Accountant
                                               --------------------- 


                                LAKEHEAD PIPE LINE PARTNERS, L.P.
                                
                                By:     Lakehead Pipe Line Company, Inc.,
                                        General Partner
                                
                                
                                By:     Paul W. Norgren
                                        ----------------------------
                                        Name: Paul W. Norgren
                                              ----------------------
                                        Title: Secretary
                                               --------------------- 
                                
                                
                                By:     S. Q. DeVinck
                                        ----------------------------
                                        Name: S. Q. DeVinck              
                                              ----------------------
                                        Title: Chief Accountant
                                               --------------------- 
                                
                                
                                
                                

                                     S-1

<PAGE>   9
                                LAKEHEAD SERVICES,
                                LIMITED PARTNERSHIP

                                By:     Lakehead Pipe Line Partners, L.P., a
                                        Delaware Limited Partnership

                                By:     Lakehead Pipe Line Company, Inc.,
                                        General Partner



                                By:     Paul W. Norgren
                                        ----------------------------
                                        Name: Paul W. Norgren 
                                              ----------------------
                                        Title: Secretary
                                               ---------------------

                                By:     S. Q. DeVinck
                                        ----------------------------
                                        Name: S. Q. DeVinck             
                                              ----------------------
                                        Title: Chief Accountant
                                               --------------------- 
        
       

                                LAKEHEAD PIPE LINE COMPANY
                                LIMITED PARTNERSHIP

                                By:   Lakehead Pipe Line Company, Inc.,
                                      General Partner



                                By:   Paul W. Norgren
                                      ------------------------------
                                      Name: Paul W. Norgren 
                                            ------------------------
                                      Title: Secretary
                                             -----------------------

                                By:   S. Q. DeVinck
                                      ------------------------------
                                      Name: S. Q. DeVinck             
                                            ------------------------
                                      Title: Chief Accountant
                                             ----------------------- 



                                      S-2

<PAGE>   10
                                BANK OF MONTREAL, a Canadian-chartered
                                bank in its individual capacity as a Bank and as
                                Agent



                                By; J. Michael Linton
                                   ------------------------------
                                Name: J. Michael Linton
                                     ----------------------------
                                Title:  Director
                                       --------------------------


                                THE TORONTO-DOMINION BANK, a Canadian
                                chartered bank



                                By:
                                    -----------------------------
                                Name: 
                                     ----------------------------
                                Title:
                                       --------------------------
                                      


                                CANADIAN IMPERIAL BANK OF COMMERCE,
                                a Canadian chartered bank



                                By:
                                    -----------------------------
                                Name: 
                                     ----------------------------
                                Title:
                                       --------------------------
                                      


                                ABN AMRO BANK, N.V., CAYMAN ISLANDS
                                BRANCH



                                By:
                                    -----------------------------
                                Name: 
                                     ----------------------------
                                Title:
                                       --------------------------


                                      S-3

<PAGE>   11
                                BANK OF MONTREAL, a Canadian-chartered
                                bank in its individual cacity as a Bank and as
                                Agent


                                By:
                                    -----------------------------
                                Name: 
                                      --------------------------
                                Title:
                                       --------------------------


                                THE TORONTO-DOMINION BANK, a Canadian
                                chartered bank



                                By: Neva Nesbitt
                                    -----------------------------
                                Name: NEVA NESBITT
                                      ---------------------------
                                Title: MGR.  CR ADMIN.
                                       --------------------------



                                CANADIAN IMPERIAL BANK OF COMMERCE,
                                a Canadian chartered bank

                        
                                By:
                                    -----------------------------
                                Name: 
                                      ---------------------------
                                Title:
                                       --------------------------


                                ABN AMRO BANK, N.V., CAYMAN ISLANDS
                                BRANCH


                                By:
                                    -----------------------------
                                Name: 
                                      ---------------------------
                                Title:
                                       --------------------------
                               

                                      S-3




<PAGE>   12
                                BANK OF MONTREAL, a Canadian-chartered
                                bank in its individual capacity as a Bank and as
                                Agent


                                By:
                                    -------------------------------------------
                                Name: 
                                      -----------------------------------------
                                Title:
                                       ----------------------------------------




                                THE TORONTO-DOMINION BANK, a Canadian
                                chartered bank



                                By:
                                    -------------------------------------------
                                Name: 
                                      -----------------------------------------
                                Title:
                                       ----------------------------------------


                                CANADIAN IMPERIAL BANK OF COMMERCE,
                                a Canadian chartered bank



                                By:  Gary C. Gaskill  M A.G. Corkum
                                     ------------------------------------------
                                Name: GARY C. GASKILL M.A.G. Corkum
                                      -----------------------------------------
                                Title:AUTHORIZED SIGNATORY AUTHORIZED SIGNATORY
                                      -----------------------------------------


                                ABN AMRO BANK, N.V., a [Netherlands] bank



                                By:
                                    -------------------------------------------
                                Name:                       
                                       ----------------------------------------
                                Title:
                                       ----------------------------------------



                                      S-3

<PAGE>   13
                                BANK OF MONTREAL, a Canadian-chartered
                                bank in its individual capacity as a Bank and as
                                Agent


                                By:
                                    -----------------------------
                                Name: 
                                       --------------------------
                                Title:
                                       --------------------------


                                THE TORONTO-DOMINION BANK, a Canadian
                                chartered bank

                                By:
                                    -----------------------------
                                Name:
                                       --------------------------
                                Title:
                                       --------------------------
                               


                                CANADIAN IMPERIAL BANK OF COMMERCE,
                                a Canadian chartered bank


                                By:
                                    -----------------------------
                                Name:
                                       --------------------------
                                Title:
                                       --------------------------
                               





                                ABN AMRO BANK, N.V., CAYMAN ISLANDS
                                BRANCH



                                By: P.K. Chan
                                    -----------------------------
                                Name: P.K. CHAN
                                      ---------------------------
                                Title: VICE PRESIDENT, CREDIT
                                       --------------------------



                                      S-3