Northern Border Partners LP reported a 15% increase in earningsper unit. Earnings improvement from the first half of 1997 wasattributed mainly to return on equity from investment in theChicago Project, an $839 million expansion and extension of theNorthern Border Pipeline system.

“Completion of construction on the Chicago Project remains ourtop priority during 1998,” said Larry L. DeRoin, CEO of NorthernBorder Partners. “Installation of compressor station and pipelinefacilities is progressing, and we continue to target a November1998 in-service date. Second quarter 1998 throughput volumes forNorthern Border Pipeline averaged 1,695 MMcf/d versus 1,755 MMcf/dfor the second quarter of 1997.

“Northern Border Pipeline continues to expand its strong marketposition as the largest transporter of Canadian gas into theMidwest. We currently are developing two new pipeline projects:Project 2000, a proposed $165 million to $175 million mainlineextension of the Northern Border Pipeline system into Indiana andthe recently proposed Illinois-Wisconsin Express Project, a jointventure to develop a $220 million to $280 million pipeline to serveNorthern Illinois and Wisconsin markets.”

The partnership reported earnings per unit of $0.55 for thesecond quarter of 1998 compared to $0.48 per unit for the sameperiod in 1997. The Partnership generated net income of $16.4million for the second quarter of 1998 versus $12.8 million for thesame period in 1997. The second quarter 1997 results includednon-recurring earnings of $0.02 per unit, or net income of $0.6million.

For the first half of 1998, the Partnership reported earningsper unit of $1.05 compared to $0.98 per unit in the first half of1997. The Partnership reported net income of $31.3 million for thefirst half of 1998 versus $26.2 million in the prior year period.1997 results included non-recurring earnings of $0.07 per unit, ornet income of $2.0 million.

The increase in earnings per unit during the first two quartersof 1998 is primarily attributable to the return on equity allowedon the partnership’s investments in the construction of the ChicagoProject, an $839 million expansion and extension of the NorthernBorder Pipeline system. The additional returns allowed more thanoffset the effects of approximately 3 million new common unitsissued in late 1997 and early 1998 to fund the Partnership’sinvestment.

Northern Border Partner owns a 70% general partner interest inNorthern Border Pipeline Co., which owns a 969-mile U.S.interstate pipeline system that transports about 20% of allCanadian gas into the United States. Northern Border is expandingits capacity by 700 MMcf/d and extending the pipeline into theChicago area.

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