<PAGE>

================================================================================

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549
                                _______________

                                   FORM 10-Q

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

 For Quarter Ended September 30, 2001           Commission File Number 333-51713


                       MARKET HUB PARTNERS STORAGE, L.P.
            (Exact name of Registrant as Specified in its Charter)


               Delaware                                    76-0558052
     (State or Other Jurisdiction                         (IRS Employer
           of Incorporation)                           Identification No.)


                             5400 Westheimer Court
                                 P.O. Box 1642
                            Houston, TX  77251-1642
                   (Address of Principal Executive Offices)
                                  (Zip code)

                                 713-627-5400
             (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. Yes  x  No __
                                       ---

The Registrant meets the conditions set forth in General Instructions (H)(1)(a)
and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format. Part I, Item 2 has been reduced and Part II, Item 4 has been
omitted in accordance with such Instruction H.

All of the Registrant's interests are indirectly owned by Duke Energy
Corporation (File No. 1-4928), which files reports and proxy materials pursuant
to the Securities Exchange Act of 1934.

================================================================================
<PAGE>

                       MARKET HUB PARTNERS STORAGE, L.P.
              FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2001
                                     INDEX


<TABLE>
<CAPTION>
Item                                                                                             Page
----                                                                                             ----

                         PART I. FINANCIAL INFORMATION
<S>                                                                                              <C>
1.    Financial Statements......................................................................  1
      Consolidated Statements of Operations for the Three and Nine Months Ended
          September 30, 2001 and 2000...........................................................  1
      Condensed Consolidated Statements of Cash Flows for the Nine Months Ended
          September 30, 2001 and 2000...........................................................  2
      Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000................  3
      Notes to Consolidated Financial Statements................................................  4
2.    Management's Discussion and Analysis of Results of Operations and Financial Condition.....  6

                           PART II. OTHER INFORMATION

1.    Legal Proceedings.........................................................................  8
6.    Exhibits and Reports on Form 8-K..........................................................  8

      Signature.................................................................................  9
</TABLE>



SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995

From time to time, the Company's reports, filings and other public announcements
may include assumptions, projections, expectations, intentions or beliefs about
future events. These statements are intended as "forward-looking statements"
under the Private Securities Litigation Reform Act of 1995. The Company cautions
that assumptions, projections, expectations, intentions or beliefs about future
events may and often do vary from actual results and the differences between
assumptions, projections, expectations, intentions or beliefs and actual results
can be material. Accordingly, there can be no assurance that actual results will
not differ materially from those expressed or implied by the forward-looking
statements. Some of the factors that could cause actual achievements and events
to differ materially from those expressed or implied in such forward-looking
statements include state and federal legislative and regulatory initiatives that
affect cost and investment recovery, have an impact on rate structures and
affect the speed and degree to which competition enters the natural gas
industry; the weather and other natural phenomena; the timing and extent of
changes in commodity prices and interest rates; changes in environmental and
other laws and regulations to which the Company is subject or other external
factors over which the Company has no control; the results of financing efforts,
including the Company's ability to obtain financing on favorable terms, which
can be affected by the Company's credit rating and general economic conditions;
level of creditworthiness of counterparties to transactions; growth in
opportunities for the Company; and the effect of accounting policies issued
periodically by accounting standard-setting bodies.

                                       i
<PAGE>

                         PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

                       MARKET HUB PARTNERS STORAGE, L.P.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                                (In thousands)

<TABLE>
<CAPTION>
                                                 Three Months Ended                           Nine Months Ended
                                                    September 30,                               September 30,
                                        ----------------------------------------- -----------------------------------------
                                             2001                      2000               2001                2000
                                        ---------------         ----------------  -----------------       -----------------
<S>                                     <C>                     <C>                <C>                     <C>
Operating Revenues
      Salt cavern storage revenues      $       10,594          $        7,108    $         29,253        $         22,620
      Hub service revenues                       1,370                     801               6,904                   1,239
                                        ---------------         ---------------   -----------------       -----------------
           Total operating revenues             11,964                   7,909              36,157                  23,859
                                        ---------------         ---------------   -----------------       -----------------

Operating Expenses
      Operation and maintenance                  1,125                   1,326               2,848                   4,649
      Depreciation and amortization              2,626                   1,602               7,523                   4,494
      Property and other taxes                     517                     315               1,931                     945
                                        ---------------         ---------------   -----------------       -----------------
           Total operating expenses              4,268                   3,243              12,302                  10,088
                                        ---------------         ---------------   -----------------       -----------------

Operating Income                                 7,696                   4,666              23,855                  13,771

Other Income and Expenses, Net                     135                     284                 398                     827

Interest Expense                                   609                   2,442               1,381                   7,355
                                        ---------------         ---------------   -----------------       -----------------

Net Income                              $        7,222          $        2,508    $         22,872        $          7,243
                                        ===============         ===============   =================       =================
</TABLE>

                See Notes to Consolidated Financial Statements.

                                       1
<PAGE>

                       MARKET HUB PARTNERS STORAGE, L.P.
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (In thousands)


<TABLE>
<CAPTION>
                                                                                  Nine Months Ended
                                                                                    September 30,
                                                                         ------------------------------------
                                                                              2001                2000
                                                                         ----------------    ----------------
<S>                                                                      <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES                                     $        27,129     $         8,398
                                                                         ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES
       Capital expenditures                                                      (32,768)             (2,347)
       Net increase in advances payable - affiliates                               4,828                   -
                                                                         ----------------    ----------------
                      Net cash used in investing activities                      (27,940)             (2,347)
                                                                         ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES
       Distributions to partners                                                       -              (9,500)
                                                                         ----------------    ----------------
                      Net cash used in financing activities                            -              (9,500)
                                                                         ----------------    ----------------

       Net decrease in cash and cash equivalents                                    (811)             (3,449)

       Cash and cash equivalents at beginning of period                              811              14,029
                                                                         ----------------    ----------------
       Cash and cash equivalents at end of period                        $             -     $        10,580
                                                                         ================    ================

Supplemental Disclosures
       Cash paid for interest, net of amount capitalized                 $         2,245     $         9,728
</TABLE>

                See Notes to Consolidated Financial Statements.

                                       2
<PAGE>

                       MARKET HUB PARTNERS STORAGE, L.P.
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)

<TABLE>
<CAPTION>
                                                                   September 30,
                                                                      2001                December 31,
                                                                   (unaudited)               2000
                                                                 -----------------    -----------------
<S>                                                              <C>                  <C>
ASSETS

Current Assets
      Cash and cash equivalents                                  $               -     $            811
      Accounts receivable                                                    4,515                3,623
      Accounts receivable, affiliate                                         2,222                1,339
      Note receivable, affiliate                                             5,000                5,000
      Natural gas imbalance receivables                                     22,239               39,447
      Other                                                                  1,051                  120
                                                                  -----------------    -----------------
            Total current assets                                            35,027               50,340
                                                                  -----------------    -----------------

Property, Plant and Equipment
      Cost                                                                 230,883              198,410
      Less accumulated depreciation and amortization                        31,948               28,081
                                                                  -----------------    -----------------
            Net property, plant and equipment                              198,935              170,329
                                                                  -----------------    -----------------

Goodwill, Net                                                              214,225              150,990
Other Assets                                                                   234                  217
                                                                  -----------------    -----------------

      Total Assets                                                $        448,421     $        371,876
                                                                  =================    =================


LIABILITIES AND PARTNERS' CAPITAL

Current Liabilities
      Accounts payable                                            $             62     $             16
      Accrued interest                                                         187                  829
      Accrued property tax                                                   1,923                1,152
      Natural gas imbalance payables                                        22,239               39,447
      Other accrued liabilities                                              1,828                2,471
                                                                  -----------------    -----------------
            Total current liabilities                                       26,239               43,915
                                                                  -----------------    -----------------

Long-term Debt
      Advances payable - affiliates                                         76,092               70,223
      Other                                                                 27,210               27,210
                                                                  -----------------    -----------------
            Total long-term debt                                           103,302               97,433
                                                                  -----------------    -----------------

Partners' Capital                                                          318,880              230,528
                                                                  -----------------    -----------------

      Total Liabilities and Partners' Capital                     $        448,421     $        371,876
                                                                  =================    =================
</TABLE>

                See Notes to Consolidated Financial Statements.

                                       3
<PAGE>

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


1.  General

Market Hub Partners Storage, L.P. (the Company) was formed on December 31, 1997
as a Delaware limited partnership. The Company is wholly owned by indirect
subsidiaries of Duke Energy Corporation (Duke Energy). The Company owns and
operates two natural gas market hubs: Moss Bluff located near Houston, Texas and
Egan located near Acadia Parish, Louisiana. These hubs provide producers, end-
users, local distribution companies, pipelines and natural gas marketers with
high deliverability storage services, real time title tracking and other hub
services.

The Consolidated Financial Statements include the accounts of the Company and
all majority-owned subsidiaries and reflect all normal recurring adjustments
that are, in the opinion of management, necessary to present fairly the
financial position and results of operations for the respective periods.

2.  Summary of Significant Accounting Policies

New Accounting Standards. The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," on January 1, 2001. The Company has determined there was no effect
of implementing SFAS No. 133 on the consolidated results of operations, cash
flows or financial position.

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 142 is effective for
fiscal years beginning after December 15, 2001 and will be adopted by the
Company as of January 1, 2002. SFAS No. 142 requires that goodwill no longer be
amortized over an estimated useful life, as previously required. Instead,
goodwill amounts will be subject to a fair-value-based annual impairment
assessment. The standard also requires acquired intangible assets to be
recognized separately and amortized as appropriate. The FASB and the Emerging
Issues Task Force continue to field questions surrounding the transition
provisions and clarification of key aspects of the standard. The Company is
preparing to implement the new standard and expects that the adoption of SFAS
No. 142 will not have a significant impact on future consolidated statements of
financial position but will have a significant impact on the consolidated
results of operations with the discontinuation of goodwill amortization expense.
For the nine months ended September 30, 2001, amortization expense for goodwill
and other intangibles was $3.4 million.

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No.143 provides the accounting requirements for retirement
obligations associated with tangible long-lived assets. SFAS No.143 is effective
for fiscal years beginning after June 15, 2002, and early adoption is permitted.
The Company is currently assessing the new standard and has not yet determined
the impact on its consolidated results of operations, cash flows or financial
position.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." The new rules supersede SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." The new rules retain many of the fundamental recognition and
measurement provisions, but significantly change the criteria for classifying an
asset as held-for-sale. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001. The Company is currently assessing the new standard and
has not yet determined the impact on its consolidated results of operations,
cash flows or financial position.

Reclassifications. Certain prior period amounts have been reclassified in the
Consolidated Financial Statements to conform to the current presentation.

                                       4
<PAGE>

3.  Related Party Transactions

The note receivable balance of $5 million is due from a wholly owned indirect
subsidiary of Duke Energy and is payable on demand, bearing interest at prime
plus 2%. For the three months ended September 30, 2001 and September 30, 2000,
interest income included $131 thousand associated with this note receivable.
Interest income for both nine-month periods included $394 thousand associated
with this note receivable.

Advances payable - affiliates do not bear interest. Advances are carried as open
accounts and are not segregated between current and non-current amounts.
Increases and decreases in advances result from the movement of funds to provide
for operations and capital expenditures.

4.  Gas Imbalances

The Consolidated Balance Sheets include in-kind balances as a result of
differences in gas volumes received and delivered. Natural gas volumes owed to
(from) the Company are valued at natural gas market prices as of the balance
sheet dates.

5.  Business Combination

On September 18, 2000, a subsidiary of Duke Energy acquired all the outstanding
stock and limited partnership interests in Market Hub Partners, L.P. (MHP). MHP
indirectly owns all partnership interests in the Company. Duke Energy accounted
for the acquisition of MHP using the purchase method of accounting for
acquisitions. As a result, MHP's and the Company's assets and liabilities were
adjusted to reflect preliminary estimated fair values and the excess of the
purchase price over the estimated fair value of the net identifiable assets was
recorded as goodwill. During the third quarter of 2001, Duke Energy completed
the purchase price adjustments associated with the acquisition of MHP, and, as a
result, certain property values and related liabilities of affiliates of the
Company were adjusted. These adjustments resulted in an increase of
approximately $66 million to goodwill and partners' capital of the Company under
pushdown accounting rules.

                                       5
<PAGE>

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

INTRODUCTION

Market Hub Partners Storage, L.P. (the Company) markets natural gas storage
services to pipelines, local distribution companies, producers, end-users and
natural gas marketers. The Company receives fees for use of its salt cavern
storage facilities, which generally include a contractual demand charge for the
reservation of storage space and injection and withdrawal fees for the actual
use of the space. The Company offers short-term firm and interruptible hub
services to its customers. These services include balancing, wheeling, title
transfer, imbalance trading, and parking and loaning of natural gas.

Management's Discussion and Analysis should be read in conjunction with the
Consolidated Financial Statements.

STORAGE CAPACITY

The Company's financial condition and results of operations are directly related
to the working storage capacity of the Company's storage facilities.

-------------------------------------------------------------------------------
                                                September 30,     September 30,
(Billion cubic feet (Bcf))                            2001               2000
-------------------------------------------------------------------------------
Combined Facility Totals
 Working gas capacity (1)                             25.6               22.7
 Average working gas capacity (2)                     24.6               22.7
 Average leased capacity (2)                          23.3               19.2
-------------------------------------------------------------------------------

(1) As of the date indicated.
(2) For the nine-month period ended as of the date indicated.

RESULTS OF OPERATIONS

Net income for the nine months ended September 30, 2001 was $22.9 million
compared to $7.2 million for the comparable period of 2000. The increase was
primarily due to a $6.6 million increase in salt cavern storage revenues as a
result of increased leased capacity and higher rates, and a $5.7 million
increase in hub services revenues from increased parking and loaning activities.
Interest expense also decreased $6 million resulting from decreased outstanding
long-term debt balances since September 30, 2000.

LIQUIDITY AND CAPITAL RESOURCES

As a result of increased earnings, net cash provided by operations increased to
$27.1 million for the nine months ended September 30, 2001, compared to $8.4
million for the same period of 2000.

Capital expenditures for the nine months ended September 30, 2001 and 2000 were
$32.8 million and $2.3 million, respectively, and primarily represent the
expansion of working storage capacity. The Company will continue expanding both
Moss Bluff and Egan storage facilities from 12 Bcf to 16 Bcf each over the next
few years. Remaining capital expenditures for 2001 are projected to be $7
million, primarily related to the expansion. The Company believes that funds
generated from operations and/or advances from its parent will be sufficient to
meet its liquidity requirements for the foreseeable future.

CURRENT ISSUES

New Accounting Standards. In June 2001, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standard (SFAS) No.142,
"Goodwill and Other Intangible Assets." SFAS No. 142 is effective for fiscal
years beginning after December 15, 2001 and will be adopted by the Company as of
January 1, 2002. SFAS No. 142 requires that goodwill no longer be amortized over
an estimated useful life, as previously required.

                                       6
<PAGE>

Instead, goodwill amounts will be subject to a fair-value-based annual
impairment assessment. The standard also requires acquired intangible assets to
be recognized separately and amortized as appropriate. The FASB and the Emerging
Issues Task Force continue to field questions surrounding the transition
provisions and clarification of key aspects of the standard. The Company is
preparing to implement the new standard and expects that the adoption of SFAS
No. 142 will not have a significant impact on future consolidated statements of
financial position but will have a significant impact on the consolidated
results of operations with the discontinuation of goodwill amortization expense.
For the nine months ended September 30, 2001, amortization expense for goodwill
and other intangibles was $3.4 million.

In July 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No.143 provides the accounting requirements for retirement
obligations associated with tangible long-lived assets. SFAS No.143 is effective
for fiscal years beginning after June 15, 2002, and early adoption is permitted.
The Company is currently assessing the new standard and has not yet determined
the impact on its consolidated results of operations, cash flows or financial
position.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." The new rules supersede SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of." The new rules retain many of the fundamental recognition and
measurement provisions, but significantly change the criteria for classifying an
asset as held-for-sale. SFAS No. 144 is effective for fiscal years beginning
after December 15, 2001. The Company is currently assessing the new standard and
has not yet determined the impact on its consolidated results of operations,
cash flows or financial position.

                                       7
<PAGE>

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 6. Exhibits and Reports on Form 8-K.

(a)   Exhibits

          None

(b)   Reports on Form 8-K

          The Company filed no reports on Form 8-K during the third quarter of
2001.

                                       8
<PAGE>

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.



                                 MARKET HUB PARTNERS STORAGE, L.P.

                                 By: MARKET HUB PARTNERS STORAGE, LLC, its
                                 general partner

November 13, 2001                /s/ Dorothy M. Ables
                                 -----------------------------------
                                 Dorothy M. Ables
                                 Senior Vice President, Finance and
                                 Administration and Chief Financial Officer


                                       9