<PAGE>   1
                                                                  1996 FORM 10-K
                                                                   EXHIBIT 10.18



                          TREASURY SERVICES AGREEMENT

     MEMORANDUM OF AGREEMENT with effect as of the 1st day of January, 1996.

     A M O N G:

                  IPL ENERGY INC., a corporation incorporated
                      under the laws of Canada ("Energy")

                                                               OF THE FIRST PART

                                    - and -

                      LAKEHEAD PIPE LINE COMPANY, INC., a
                      corporation incorporated under the laws of the 
                      State of Delaware ("Lakehead")

                                                              OF THE SECOND PART

            WHEREAS:

     A.     Energy has agreed to provide to Lakehead the treasury services
            described in Schedule "A" hereto, with such deletions, additions or
            modifications as the parties may agree upon (the "Treasury
            Services");

     B.     Lakehead desires to obtain the Treasury Services and Energy is
            prepared to make available and provide the Treasury Services to
            Lakehead on the terms hereinafter set forth;

     C.     Energy incurs expenses (the "Treasury Expenses") to provide the
            Treasury Services to its subsidiaries and affiliates including
            Lakehead;

     D.     Lakehead agrees to pay its proportionate share of the Treasury
            Expenses, on the terms and conditions set forth herein;

     The parties hereto desire to reduce to writing the agreement pursuant to
     which the Treasury Services will be provided and paid for hereunder.

     NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
     premises and mutual covenants hereinafter contained, the parties hereto
     agree as follows:

<PAGE>   2
                                                     Treasury Services Agreement
                                                                          Page 2


                                   ARTICLE I
                             PROVISION OF SERVICES

      1.1     For each Lakehead fiscal year commencing January 1, 1996 Lakehead
              shall pay to Energy an annual fee equal to the product of
              Energy's total forecasted North American Treasury expenses for
              Energy's corresponding fiscal year, multiplied by a percentage
              amount equal to the following:

              a)    the percentage amount used in the prior year, which for the
                    1996 fiscal year has been deemed to be 28%; or

              b)    if either party proposes a variation to the percentage
                    amount from that used for the previous year, a percentage
                    amount mutually agreed upon by the Vice-President &
                    Treasurer of Energy and the Chief Accountant of Lakehead.

              Such percentage amount will reflect a fair and reasonable
              allocation to Lakehead of the total Treasury Expenses for the
              applicable year.

              If material, an adjustment will be made for the difference
              between the year's actual Treasury Expenses compared to the
              year's forecasted Treasury Expenses.

      1.2     For 1996, Energy's total forecasted North American Treasury
              expenses are $1,495,000 of which Lakehead's share pursuant to
              Section 1.1 above is $420,000 subject to adjustment as provided
              for in Section 1.1.

      1.3     The fees to be paid pursuant to Section 1.1 hereof shall be paid
              by Lakehead within 30 days of receiving a monthly invoice from
              Energy for the Treasury Services.

      1.4     The provisions of Article I of this Agreement will apply in
              respect of Treasury Expenses until this Agreement is terminated
              or amended in accordance with Section 2.1 or Section 2.18,
              respectively.

      1.5     All amounts payable under this Agreement are expressed in
              Canadian dollars but payment may be made in equivalent U.S.
              dollars.


                                   ARTICLE II
                                 MISCELLANEOUS

      2.1     The obligations of a party hereto under this Agreement may be
              terminated by such party upon 30 days written notice to the other
              party.  Such termination shall not relieve a terminating party of
              its obligations up to and including the date of termination.

<PAGE>   3
                                                     Treasury Services Agreement
                                                                          Page 3



       2.2     This Agreement is not intended to create, and shall not be
               construed as creating, any relationship of partnership, agency,
               joint venture or association for profit between the parties.

       2.3     Neither of the parties hereto shall have any fiduciary
               obligations or duties to the other party by reason of this
               Agreement.  Either party may conduct any activity or business
               for its own profit, whether or not such activity or business is
               in competition with any activity or business of the other party.

       2.4     In providing the Treasury Services, Energy shall not be liable
               for damages to Lakehead for any delays or errors in providing
               the Treasury Services or for loss of data or records save and
               except where said delays or errors are the result of negligence
               or a breach of this Agreement by Energy or its agents.

       2.5     The Treasury Services shall be provided on the basis that Energy
               does not make any warranties or representations, express or
               implied, with respect to the Treasury Services save and except
               that the Treasury Services shall be provided by qualified
               personnel in a professional and timely manner.

       2.6     Lakehead hereby releases Energy from any claims which it may
               have with respect to the provision of the Treasury Services,
               unless such claims are the result of the negligence of Energy or
               a breach of this Agreement by Energy.

       2.7     Lakehead shall indemnify and hold Energy harmless from and
               against any loss, damage, claim, liability, debt, obligation or
               expense (including reasonable legal fees and disbursements)
               incurred or suffered by Energy and relating in any way to this
               Agreement or the provision of the Treasury Services, excluding
               any loss, damage, claim, liability, debt, obligation or expense
               resulting from or arising from or in connection with a negligent
               act or omission of Energy or a breach of this Agreement by
               Energy.

       2.8     If either party to this Agreement is rendered unable by force
               majeure to carry out its obligations under this Agreement, other
               than Lakehead's obligation to make payments to Energy as
               provided for herein, that party shall give the other party
               prompt written notice of the force majeure with reasonably full
               particulars concerning it.  Thereupon, the obligations of the
               party giving the notice, so far as they are affected by the
               force majeure, shall be suspended during, but no longer than the
               continuance of, the force majeure.  The affected party shall use
               all reasonable diligence to remove or remedy the force majeure
               situation as quickly as practicable.

               The requirement that any force majeure situation be removed or
               remedied with all reasonable diligence shall not require the
               settlement of strikes, lockouts or other

<PAGE>   4
                                                     Treasury Services Agreement
                                                                          Page 4


            labour difficulty by the party involved, contrary to its wishes.
            Rather, all such difficulties may be handled entirely within the
            discretion of the party concerned.

            The term "force majeure" means any one or more of:

            (a)    an act of God;

            (b)    a strike, lockout, labour difficulty or other industrial
                   disturbance;

            (c)    an act of a public enemy, war, blockade, insurrection or
                   public riot;

            (d)    lightning, fire, storm, flood or explosion;

            (e)    governmental action, delay, restraint or inaction;

            (f)    judicial order or injunction;

            (g)    material shortage or unavailability of equipment; or

            (h)    any other cause or event, whether of the kind specifically
                   enumerated above or otherwise, which is not reasonably
                   within the control of the party claiming suspension.

    2.9     Each party shall from time to time, and at all times, do such
            further acts and execute and deliver all such further deeds and
            documents as shall be reasonably requested by the other party in
            order to fully perform and carry out the terms of this Agreement.

    2.10    Time is of the essence of this Agreement.

    2.11    Any notice, request, demand, direction or other communication
            required or permitted to be given or made under this Agreement to a
            party shall be in writing and may be given by hand delivery to the
            party to whom it is addressed or sent by telefax to such party at
            its address noted below:

            (a)    in the case of Energy, to:

                   IPL ENERGY INC.               2900 Canada Trust Tower 
                                                 421 - 7th Ave. S.W.
                                                 Calgary, Alberta T2P 4K9

                   Attention:                    Mr. J.R. Bird
                                                 
                   Facsimile:                    (403) 231-3920

<PAGE>   5
                                                     Treasury Services Agreement
                                                                          Page 5


            (b)   in the case of Lakehead, to:
                                                      
                  LAKEHEAD PIPE LINE COMPANY, INC.     21 West Superior Street 
                                                       Suite 400 
                                                       Duluth, MN 55802

                   Attention:                          Mr. S.Q. DeVinck
                                                       
                   Facsimile:                          (218) 725-0445
                                                       
            or at such other address of which notice may have been given
            by such party in accordance with the provisions of this section.

            Any such telefax shall, if a confirmation copy thereof is mailed by
            first class mail from the office of the sender to the addressee of
            such telefax at the foregoing address within 24 hours of the
            transmission of such telefax, be deemed to have been received at
            the opening of business at the premises of such addressee on the
            first business day following the transmission of such telefax;
            provided that, if at the time of mailing of any such confirmation
            copy or, if during the seven (7) business days thereafter, there is
            a strike, lock-out or other interruption relating to the mail
            service of Canada or the United States, then such confirmation copy
            shall be provided by personal delivery.

    2.12    This Agreement may be executed in several counterparts, no one of
            which needs to be executed by both of the parties.  Each
            counterpart, including a facsimile transmission of this Agreement,
            shall be deemed to be an original and shall have the same force and
            effect as an original.  All counterparts together shall constitute
            but one and the same instrument.

    2.13    The provisions of this Agreement shall be construed in accordance
            with the laws of the Province of Alberta and the laws of Canada
            applicable therein.

    2.14    This Agreement will enure to the benefit of and be binding upon the
            parties hereto and their respective successors.  This Agreement may
            not be assigned by either of the parties hereto without the prior
            written consent of the other party.

    2.15    The division of this Agreement into Articles and Sections and the
            insertion of headings are for convenience of reference only and
            shall not affect the construction or interpretation of this
            Agreement.  The terms "this Agreement", "hereof", "hereunder" and 
            similar expressions refer to this Treasury Services Agreement and
            not to any particular Section or other portion hereof and include
            any agreement supplemental hereto.  Unless something in the subject
            matter or context is inconsistent therewith, references herein to
            Articles and Sections are to Articles and Sections of this
            Agreement.
<PAGE>   6
                                                     Treasury Services Agreement
                                                                          Page 6


      2.16   Words importing the singular number shall include the plural and
             vice versa, words importing the masculine gender shall include the
             feminine and neuter genders and vice versa, and words importing
             persons shall include individuals, partnerships, associations,
             trusts, unincorporated organizations and corporations and vice
             versa.

      2.17   In the event that one or more of the provisions contained in this
             Agreement shall be invalid, illegal or unenforceable in any
             respect under any applicable law, the validity, legality or
             enforceability of the remaining provisions hereof shall not be
             affected or impaired thereby.  Each of the provisions of this
             Agreement is hereby declared to be separate and distinct.

      2.18   Subject to obtaining the necessary regulatory approvals, this
             Agreement may not be modified or amended except by an instrument
             in writing signed by each of the parties hereto or by their
             respective successors or permitted assigns.

      2.19   This Agreement constitutes the whole and entire agreement between
             the parties hereto and supersedes any prior agreement,
             undertaking, declarations, commitments, representations, verbal or
             oral, in respect of the subject matter hereof.


IN WITNESS WHEREOF the parties hereto have executed this Agreement with effect
as of the date first above written.


                                                LAKEHEAD PIPE LINE COMPANY, INC,

               Terms       SDL 10/18/96          S.Q. DeVinck 
                                                 Name:  Steven Q. DeVinck
               Description                       Title: Chief Accountant 

               Form        SDL 10/18/96 

                                                IPL ENERGY INC.
                 IPL        APPROVAL
                 Terms:_____________             J. R. Bird
                                                 Name:  J. R. Bird 
                                                 Title: Vice President and 
                                                        Treasurer
                 Date:______________


                 Form: Sept. 24, 1996 


                 Date: Sept. 26, 1991

<PAGE>   7
                                  SCHEDULE "A"

              Treasury Services to Lakehead (LAKEHEAD PIPELINE LP)



       (a)    Acting as primary interface between Lakehead and financial
              markets.

       (b)    Short-term money management (investment of surplus funds and
              short-term borrowing).

       (c)    Servicing long-term debt and equity obligations.

       (d)    Banking arrangements (compensation, operating lines of credit,
              letters of credit, advice on banking and cash management issues).

       (e)    Advice relating to interest rate, foreign exchange, counterparty
              credit risk management.

       (f)    Advice on major lease versus buy financing decisions, and project
              financing as required.

       (g)    Advice on existing public and private debt and the structure and
              arrangement of new debt and equity financing as required.

       (h)    Acting as primary interface with external credit rating agencies.

       (i)    Participation in preparation for rate hearings and planning,
              corporate finance and cash management issues.
       
       (j)    Use of Platinum system for maintenance of treasury information
              and generation of treasury transaction records.