TC PipeLines, LP Announces 2004 First Quarter Results

Cash generated in first quarter 2004, including $2.0 million of cash distributed from Northern Border Pipeline classified as a return of capital, increased to $15.4 million compared to $13.5 million in 2003. The increase reflects higher cash distributions from Northern Border Pipeline due primarily to the change in its cash distribution policy effective January 1, 2004.

“The Partnership’s first quarter 2004 results reflect increased income and cash flow relative to the same period last year,” said Ron Turner, President and Chief Executive Officer of the general partner, TC PipeLines GP, Inc. “This is the result of successful marketing of transportation services on Northern Border Pipeline and the recent expansion of the Tuscarora system.” On April 20, 2004, the Partnership announced its first quarter cash distribution in the amount of $0.55 per unit..

Financial Highlights (unaudited)
(millions of U.S. dollars, except per unit amounts)

Equity income from Northern Border Pipeline was $12.5 million in first quarter 2004 compared to $11.0 million in the same quarter of 2003. The increase is attributable to higher revenues and lower interest costs. The increase in revenues reflects Northern Border Pipeline’s ability to generate and retain more revenues from the sale of short-term capacity and additional transportation services. The reduction in interest costs is the result of both a decrease in the average long-term debt balance and a decrease in average interest rates. Equity income from Tuscarora amounted to $1.8 million in first quarter 2004 compared to $1.3 million for first quarter 2003. The increase was primarily due to revenues from long-term firm transportation contracts, which commenced in November 2003, related to Tuscarora’s recent expansion.

The Partnership’s first quarter 2004 general and administrative expenses and financial charges of $0.5 million and $0.1 million, respectively, approximate those of the same period last year.

Cash Flow

The Partnership reported first quarter 2004 cash generated from operations of $13.4 million compared to $13.5 million for first quarter 2003. When including the portion of the cash distribution from Northern Border Pipeline reported as a return of capital, cash generated increased to $15.4 million in 2004. The increase is due primarily to Northern Border Pipeline’s change in cash distribution policy.

In first quarter 2004, the Partnership received a cash distribution from Northern Border Pipeline amounting to $14.5 million compared to $12.5 million in first quarter 2003. The increase in distribution from Northern Border Pipeline is primarily due to a change in Northern Border Pipeline’s cash distribution policy effective January 1, 2004. Under this new policy, cash distributions are based upon 100 per cent of distributable cash flow as determined from Northern Border Pipeline’s financial statements based on earnings before interest, taxes, depreciation and amortization less interest and maintenance capital expenditures.

Current accounting practice requires the classification of cumulative cash distributions in excess of cumulative equity earnings to be reported as a return of capital. As of the fourth quarter 2003, cumulative cash distributions from Northern Border Pipeline to the Partnership exceeded cumulative equity earnings. In first quarter 2004, distributions from Northern Border Pipeline exceeded equity earnings to the Partnership by $2.0 million.

Cash distributions from Tuscarora for the first quarter 2004 were $1.5 million, unchanged from first quarter 2003.

In the first quarter 2004, the Partnership contributed $19.5 million to Northern Border Pipeline representing its 30 per cent share of a $65.0 million cash call issued by Northern Border Pipeline to its partners on January 27, 2004. The funds were used by Northern Border Pipeline to repay a portion of its existing indebtedness. The Partnership’s contribution was funded with cash from operations and its credit facilities.

During first quarter 2004, the Partnership paid an aggregate $10.1 million of cash distributions to unitholders and its general partner, compared to $9.6 million in first quarter 2003. This cash distribution, on a per unit basis, represents $0.55 per unit in first quarter 2004, as compared to $0.525 per unit in first quarter 2003, as well as the general partner interest including incentive distributions.

Conference Call

The Partnership will hold a conference call Tuesday, April 27, 2004 at 12 p.m. (Eastern). Ron Turner, President and Chief Executive Officer of the general partner, will discuss the first quarter 2004 financial results and general developments and issues concerning the Partnership. Those interested in listening to the call may dial (800) 387-6216. A replay of the conference call will also be available after the call until midnight, May 4, 2004 by dialing (800) 408-3053, then entering pass code 3037898.

A live Web cast of the conference call will also be available through the Partnership’s Internet site at www.tcpipelineslp.com. An audio replay of the call will be maintained on the Internet site.

TC PipeLines, LP is a publicly traded limited partnership. It owns a 30 per cent interest in Northern Border Pipeline Company, a Texas general partnership, and a 49 per cent interest in Tuscarora Gas Transmission Company, a Nevada general partnership. Northern Border Pipeline, which is owned 70 per cent by Northern Border Partners, L.P., a publicly traded master limited partnership controlled by affiliates of Enron Corp., owns a 1,249-mile United States interstate pipeline system that transports natural gas from the Montana-Saskatchewan border to markets in the midwestern United States. Tuscarora owns a 240-mile United States interstate pipeline system that transports natural gas from Oregon, where it interconnects with facilities of Gas Transmission Northwest Corporation, to northern Nevada. TC PipeLines, LP is managed by its general partner, TC PipeLines GP, Inc., an indirect wholly owned subsidiary of TransCanada Corporation. Subsidiaries of TransCanada Corporation also hold common and subordinated units of the Partnership. Common units of TC PipeLines, LP are quoted on the Nasdaq Stock Market and trade under the symbol “TCLP”.

Cautionary Statement Regarding Forward Looking Information
This news release includes forward-looking statements regarding future events and the future financial performance of TC PipeLines, LP. Words such as “believes”, “expects”, “intends”, “forecasts”, “projects”, and similar expressions, identify forward-looking statements. All forward-looking statements are based on the Partnership’s current beliefs as well as assumptions made by and information currently available to the Partnership. These statements reflect the Partnership’s current views with respect to future events. Important factors that could cause actual results to materially differ from the Partnership's current expectations include regulatory decisions, particularly those of the Federal Energy Regulatory Commission, the Securities and Exchange Commission, majority control of the Northern Border Pipeline management committee by affiliates of Enron Corp., which has filed for bankruptcy protection, the failure of a shipper on either one of the Partnership’s pipelines to perform its contractual obligations, cost of acquisitions, future demand for natural gas, overcapacity in the industry, and other risks inherent in the transportation of natural gas as discussed in the Partnership’s filings with the Securities and Exchange Commission, including the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2003.

Click here to view TC PipeLines, LP's First Quarter Financial Highlights

Media Inquiries:

Hejdi Feick / Kurt Kadatz
(403) 920-7859

Unitholder and Analyst Inquiries:
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Toll-free (877) 290-2772
investor_relations@tcpipelineslp.com