KANEB Announces Quarterly Cash Distributions.

DALLAS -- KANEB (NYSE:KPP) (NYSE:KSL):

--$0.855 Quarterly Cash Distribution to Kaneb Pipe Line Partners, L.P. Unitholders

--$0.495 Quarterly Cash Distribution to Kaneb Services LLC Shareholders

The Board of Directors of Kaneb Pipe Line Company LLC, as general partner of Kaneb Pipe Line Partners, L.P. (NYSE:KPP), has approved a quarterly cash distribution of $0.855 for each Limited Partnership Unit. The cash distribution is payable May 13, 2005, to all unitholders of record as of April 30, 2005.

The Board of Directors of Kaneb Services LLC (NYSE:KSL) has approved a quarterly cash distribution of $0.495 for each common share. The cash distribution is payable May 13, 2005, to all shareholders of record as of April 30, 2005.

On March 11, 2005 the shareholders of Valero L.P. (NYSE:VLI), Kaneb Services LLC (NYSE:KSL) and Kaneb Pipe Line Partners, L.P. (NYSE:KPP) approved the agreements to merge Valero L.P. and Kaneb Partners to become the largest terminal operator and second largest petroleum liquids pipeline operator in the United States. Please see that joint news release and other publicly filed documents for more information on the agreement.

About KANEB

KANEB is a single business represented by two separate publicly traded entities on the New York Stock Exchange. KANEB's business is focused on mid-stream energy assets -- refined petroleum product pipelines, and petroleum and specialty liquids storage and terminaling facilities. KANEB is a major transporter of refined petroleum products in the Midwest and is the third largest independent liquids terminaling company in the world. Worldwide operations include facilities in 29 states, Canada, the Netherlands Antilles, Australia, New Zealand and the United Kingdom. Its publicly traded entities are Kaneb Services LLC (NYSE:KSL) and Kaneb Pipe Line Partners, L.P., (NYSE:KPP)("the Partnership"). For more information, visit www.kaneb.com.

Kaneb Services LLC was formed as a limited liability company in 2001 from assets previously held by Kaneb Services, Inc. (now Xanser Corporation). Those assets include the KPP general partner interest and incentive as well as 5.1 million Partnership units, a wholesale petroleum product marketing company, and a wholly owned subsidiary, Kaneb Pipe Line Company LLC, that manages and operates the pipeline and terminaling assets of KPP. KSL is a unique limited liability company, the only publicly traded, cash distributing entity taxed as a partnership that owns the general partner interest of another publicly traded master limited partnership.

Kaneb Pipe Line Partners, L.P., a master limited partnership, was formed in 1989 to own a 2,075 mile common carrier pipeline system from Kansas to North Dakota that has been managed by Kaneb Pipe Line Company LLC since 1953. Pipeline acquisitions in 1995 and 1998 added 725 miles of pipeline in Colorado, Iowa, South Dakota and Wyoming. In 2002, the Partnership acquired the largest fertilizer pipeline in the country, a 2,000-mile pipeline system that runs from the Louisiana Gulf Coast to the upper Midwest states. In December 2002, the Partnership acquired a 400 mile products pipeline and four terminals in North Dakota and Minnesota. The Partnership entered the liquids terminaling business with a large acquisition in 1993, and has more than tripled the size of this operation through subsequent acquisitions. In 2001, the Partnership completed a $165 million acquisition of seven West Coast, U.S. terminals. In 2002, the Partnership completed a $300 million acquisition of two world-class terminaling facilities located in Point Tupper, Nova Scotia, Canada and on the island of St. Eustatius in the Netherlands Antilles and the acquisition of eight bulk liquid storage terminals in Australia and New Zealand.