Northern Border Partners, L.P.



                                    3,800,000

                                 Common Units(1)

                     Representing Limited Partner Interests



                             UNDERWRITING AGREEMENT















--------

1     Plus an option to purchase from certain Selling Unitholders up to 570,000

      additional Common Units to cover over-allotments.

<PAGE>   2

                             UNDERWRITING AGREEMENT



                                                              New York, New York

                                                                 August  1, 2001

UBS Warburg LLC

Salomon Smith Barney Inc.

A.G. Edwards & Sons, Inc.

Lehman Brothers Inc.

Dain Rauscher Incorporated

First Union Securities, Inc.

J.P. Morgan Securities Inc.

as Managing Underwriters

c/o UBS Warburg LLC

299 Park Avenue

New York, New York 10071



Ladies and Gentlemen:



       The unitholders of Northern Border Partners, L.P., a limited partnership

organized under the laws of Delaware (the "Partnership"), named in Schedule B

annexed hereto (the "Selling Unitholders") propose to sell, severally and not

jointly, to the underwriters named in Schedule A annexed hereto (the

"Underwriters"), an aggregate of 3,800,000 Common Units ("Common Units")

representing limited partner interests in the Partnership (the "Firm Units"). In

addition, solely for the purpose of covering over-allotments, the Selling

Unitholders propose to grant, severally and not jointly, to the Underwriters the

Option (the "Option") to purchase from the Selling Unitholders up to an

additional 570,000 Common Units (the "Additional Units"). The Firm Units and the

Additional Units are hereinafter collectively sometimes referred to as the

"Units." The Units are described in the Final Prospectus which is referred to

below.



       The term "Registration Statement" as used in this Agreement shall mean

such registration statement filed on Form S-3 (File No. 333-63566) (including

all financial schedules and exhibits), as amended when it became effective, or,

if such registration statement became effective prior to the execution of this

Agreement, as supplemented or amended prior to the execution of this Agreement.

If it is contemplated, at the time this Agreement is executed, that a

post-effective amendment to such registration statement will be filed and must

be declared effective before the offering of the Units may commence, the term

"Registration Statement" as used in this Agreement means such registration

statement as amended by said post-effective amendment. If it is contemplated, at

the time the Agreement is executed, that a registration statement will be filed

pursuant to Rule 462(b) under the Act (as defined below) before the offering of

the Units may commence, the term "Registration Statement" as used in this

Agreement includes such registration statement. The term "Basic Prospectus" as

used in this Agreement shall mean the prospectus contained in the Registration

Statement at the time that the Registration Statement was declared effective or

in the form in which it has been most recently filed with the Commission (as

defined below) on or prior to the date of this Agreement. "Final Prospectus"

shall mean the prospectus supplement relating to the Units and the offering

thereof that is first filed pursuant to Rule 424(b) after the date and time this

Agreement is executed and delivered by the parties hereto, together with the

Basic Prospectus.

<PAGE>   3

       All references in this Agreement to financial statements and schedules

and other information which is "contained," "included" or "stated" in the

Registration Statement, the Basic Prospectus or the Final Prospectus (or other

references of like import) shall be deemed to mean and include all such

financial statements and schedules and other information which is incorporated

by reference in the Registration Statement, the Basic Prospectus or the Final

Prospectus, as the case may be; any reference in this Agreement to the

Registration Statement, the Basic Prospectus or the Final Prospectus shall be

deemed to refer to and include the documents incorporated by reference therein

pursuant to Item 12 of Form S-3 under the Act, as of the dates of the

Registration Statement, the Basic Prospectus or the Final Prospectus, as the

case may be; and any reference to any amendment or supplement to the

Registration Statement, the Basic Prospectus or the Final Prospectus shall be

deemed to refer to and include any documents filed after such date under the

Securities Exchange Act of 1934, as amended, and the rules and regulations of

the Commission thereunder (collectively, the "Exchange Act") which, upon filing,

are incorporated by reference therein, as required by paragraph (b) of Item 12

of Form S-3. As used herein, the term "Incorporated Documents" means the

documents which at the time are incorporated by reference in the Registration

Statement, the Basic Prospectus or the Final Prospectus or any amendment or

supplement thereto.



       The Partnership, Northern Border Intermediate Limited Partnership, a

Delaware limited partnership (the "Intermediate Partnership"), and the Selling

Unitholders, acting severally and not jointly, confirm as follows their

agreements with the Underwriters:



       1.     Sale and Purchase. Upon the basis of the warranties and

representations and subject to the terms and conditions herein set forth, the

Selling Unitholders agree, severally and not jointly, to sell to the respective

Underwriters the number of Units set forth opposite such Selling Unitholder's

name in Schedule B attached hereto and each of the Underwriters agree, severally

and not jointly, to purchase from the Selling Unitholders, at a purchase price

of $36.10 per Common Unit, the number of Firm Units set forth opposite such

Underwriter's name in Schedule A annexed hereto, plus such additional number of

Units which such Underwriter may become obligated to purchase pursuant to

Section 8 hereof. It is understood that the several Underwriters propose to

offer the Units for sale to the public as set forth in the Final Prospectus.



       In addition, the Selling Unitholders, acting severally and not jointly,

hereby grant to the several Underwriters the option to purchase, and upon the

basis of the warranties and representations and subject to the terms and

conditions herein set forth, the Underwriters shall have the right to purchase,

severally and not jointly, from the Selling Unitholders, ratably in accordance

with the number of Firm Units to be purchased by each of them (subject to such

adjustment as you shall determine to avoid fractional units), all or a portion

of the Additional Units as may be necessary to cover over-allotments made in

connection with the offering of the Firm Units, at the same purchase price per

unit to be paid by the Underwriters to the Selling Unitholders for the Firm

Units. This option may be exercised by you on behalf of the several Underwriters

at any time (but not more than once) on or before the thirtieth day following

the date hereof, by written notice to the Selling Unitholders and the

Partnership. Such notice shall set forth the aggregate number of Additional

Units as to which the option is being exercised, and the date and time when the

Additional Units are to be delivered (such date and time being herein referred

to as the additional time of purchase); provided, however, that the additional

time of purchase shall not be earlier than the time of purchase (as defined

below) nor earlier than the



                                      -2-

<PAGE>   4

third business day(2) after the date on which the option shall have been

exercised nor later than the tenth business day after the date on which the

option shall have been exercised. The number of Additional Units to be sold to

each Underwriter shall be the number which bears the same proportion to the

aggregate number of Additional Units being purchased as the number of Firm Units

set forth opposite the name of such Underwriter on Schedule A hereto bears to

the total number of Firm Units (subject, in each case, to such adjustment as you

may determine to eliminate fractional units).



       2.     Payment and Delivery. Payment of the purchase price for the Firm

Units shall be made to the respective accounts of the Selling Unitholders by

Federal Funds wire transfer, against delivery of the Firm Units to you for the

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