SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the transition period from to

For the Quarterly Period                                        Commission File
Ended March 31, 2000                                           Number 001-10311

                         KANEB PIPE LINE PARTNERS, L.P.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                              75-2287571
(State or other jurisdiction of                               (I.R.S. Employer
Incorporation or Organization)                               Identification No.)

                          2435 North Central Expressway
                             Richardson, Texas 75080
          (Address of principle executive offices, including zip code)

                                 (972) 699-4000
              (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

Number of Units of the Registrant outstanding at April 30, 2000:  18,310,000.

<PAGE>
KANEB PIPE LINE PARTNERS, L.P.  AND SUBSIDIARIES


FORM 10-Q
QUARTER ENDED MARCH 31, 2000
--------------------------------------------------------------------------------


                                                                        Page No.
                           Part I. Financial Information

Item 1.  Financial Statements (Unaudited)

         Consolidated Statements of Income -- Three Months Ended
            March 31, 2000 and 1999                                        1

         Condensed Consolidated Balance Sheets -- March 31, 2000
            and December 31, 1999                                          2

         Condensed Consolidated Statements of Cash Flows -- Three
            Months Ended March 31, 2000 and 1999                           3

         Notes to Consolidated Financial Statements                        4

Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations                  9

                           Part II.  Other Information

Item 6.  Exhibits and Reports on Form 8-K                                 12



<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In Thousands -- Except Per Unit Amounts)
(Unaudited)
--------------------------------------------------------------------------------
                                                            Three Months Ended
                                                                 March 31,
                                                          ---------------------
                                                            2000         1999
                                                          --------     --------

Revenues                                                  $ 36,680     $ 36,845
                                                          --------     --------
Costs and expenses:
      Operating costs                                       17,280       16,183
      Depreciation and amortization                          3,975        3,615
      General and administrative                             2,503        1,903
                                                          --------     --------
           Total costs and expenses                         23,758       21,701
                                                          --------     --------

Operating income                                            12,922       15,144
Interest and other income, net                                  59          244
Interest expense                                            (3,019)      (3,509)
                                                          --------     --------
Income before minority interest and income taxes             9,962       11,879
Minority interest in net income                                (97)        (115)
Income tax provision                                          (298)        (408)
                                                          --------     --------
Net income                                                   9,567       11,356
General partner's interest in net income                      (390)        (370)
                                                          --------     --------
Limited partners' interest in net income                  $  9,177     $ 10,986
                                                          ========     ========
Allocation of net income per Unit                         $    .50     $    .68
                                                          ========     ========
Weighted average number of Partnership
     Units outstanding                                      18,310       16,060
                                                          ========     ========




                 See notes to consolidated financial statements.
                                        1

<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES


CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
--------------------------------------------------------------------------------
                                                         March 31,  December 31,
                                                          2000          1999
                                                        ---------     --------
                                                       (Unaudited)
         ASSETS
Current assets:
     Cash and cash equivalents                          $   7,398     $  5,127
     Accounts receivable                                   16,818       16,929
     Prepaid expenses and other                             4,683        5,036
                                                         --------     --------
         Total current assets                              28,899       27,092
                                                         --------     --------
Property and equipment                                    441,907      439,537
Less accumulated depreciation                             126,413      122,654
                                                         --------     --------
     Net property and equipment                           315,494      316,883
                                                         --------     --------
Investment in affiliate                                    20,571       21,978
                                                         --------     --------

                                                         $364,964     $365,953
                                                         ========     ========

     LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
     Current portion of long-term debt                   $  2,000     $   --
     Accounts payable and accrued expenses                 17,379       14,980
     Accrued distributions payable                         13,372       13,372
     Payable to general partner                             1,548        1,411
                                                         --------     --------
         Total current liabilities                         34,299       29,763
                                                         --------     --------
Long-term debt, less current portion                      154,005      155,987

Other liabilities and deferred taxes                       10,890       10,882

Minority interest                                           1,000        1,033

Commitments and contingencies

Partners' capital                                         164,770      168,288
                                                         --------     --------
                                                         $364,964     $365,953
                                                         ========     ========


                 See notes to consolidated financial statements
                                        2

<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
--------------------------------------------------------------------------------
                                                            Three Months Ended
                                                                 March 31,
                                                           --------------------
                                                             2000        1999
                                                           --------    --------

Operating activities:
   Net income                                              $  9,567    $ 11,356
   Adjustments to reconcile net income to net
     cash provided by operating activities:
     Depreciation and amortization                            3,975       3,615
     Minority interest in net income                             97         115
     Equity in earnings of affiliate,
         net of distributions                                 1,175        --
     Deferred income taxes                                      298         404
     Changes in working capital components                    3,000         722
                                                           --------    --------
         Net cash provided by operating activities           18,112      16,212
                                                           --------    --------

Investing activities:
   Capital expenditures                                      (2,336)     (2,255)
   Acquisitions of terminals                                   --       (37,206)
   Other, net                                                  (151)       (199)
                                                           --------    --------
         Net cash used in investing activities               (2,487)    (39,660)
                                                           --------    --------

Financing activities:
   Changes in payable to general partner                       --        (5,000)
   Issuance of debt                                           2,000      49,220
   Payment of debt                                           (1,982)       --
   Distributions, including minority interest               (13,372)    (11,728)
                                                           --------    --------
         Net cash provided by (used in)
               financing activities                         (13,354)     32,492
                                                           --------    --------
Increase in cash and cash equivalents                         2,271       9,044
Cash and cash equivalents at beginning of period              5,127         849
                                                           --------    --------
Cash and cash equivalents at end of period                 $  7,398    $  9,893
                                                           ========    ========
Supplemental cash flow information -
   cash paid for interest                                  $  1,957    $  1,693
                                                           ========    ========


                 See notes to consolidated financial statements.
                                        3
<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES


Notes to Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------

1.   SIGNIFICANT ACCOUNTING POLICIES

     The unaudited  condensed  consolidated  financial  statements of Kaneb Pipe
     Line Partners,  L.P. and its subsidiaries (the "Partnership") for the three
     month  periods  ended  March 31,  2000 and  1999,  have  been  prepared  in
     accordance  with  generally  accepted  accounting  principles  applied on a
     consistent  basis.   Significant   accounting   policies  followed  by  the
     Partnership  are  disclosed  in the  notes  to the  consolidated  financial
     statements included in the Partnership's Annual Report on Form 10-K for the
     year  ended  December  31,  1999.  In  the  opinion  of  the  Partnership's
     management,  the accompanying  condensed  consolidated financial statements
     contain the adjustments, consisting of normal recurring accruals, necessary
     to present fairly the  consolidated  financial  position of the Partnership
     and its  consolidated  subsidiaries at March 31, 2000 and the  consolidated
     results of their  operations and cash flows for the periods ended March 31,
     2000 and 1999.  Operating results for the three months ended March 31, 2000
     are not necessarily  indicative of the results that may be expected for the
     year ending December 31, 2000.


2.   ACQUISITION OF TERMINALS

     On February 1, 1999, the  Partnership,  through two  wholly-owned  indirect
     subsidiaries,  acquired  six  terminals  in the  United  Kingdom  from GATX
     Terminals  Limited for (pound)22.6  million  (approximately  $37.2 million)
     plus  transaction  costs and the  assumption  of certain  liabilities.  The
     acquisition,  which was initially  financed by term loans from a bank,  has
     been accounted for using the purchase  method of accounting.  $13.3 million
     of the term loans were repaid in July 1999 with the proceeds  from a public
     unit offering (see Note 3). The remaining portion ($25.9 million) is due in
     January 2002.


3.   PUBLIC OFFERING OF UNITS

     In July 1999, the Partnership issued 2.25 million limited partnership units
     in a public  offering at $30.75 per unit,  generating  approximately  $65.6
     million in net  proceeds.  A portion of the  proceeds  was used to repay in
     full the  Partnership's  $15.0 million  promissory  note, the $25.0 million
     revolving  credit facility and $18.3 million in term loans (including $13.3
     million  in  term  loans   resulting  from  the  United  Kingdom   terminal
     acquisition referred to in Note 2).


4.   COMPREHENSIVE INCOME

     Comprehensive  income for the three months ended March 31, 2000 and 1999 is
     as follows:

                                                       Three Months Ended
                                                            March 31,
                                                       --------------------
                                                         2000       1999
                                                       --------   --------
                                                          (in thousands)

          Net income                                   $  9,567   $ 11,356
          Other comprehensive income - foreign
            currency translation adjustment                 155       (309)
                                                       --------   --------
          Comprehensive income                         $  9,722   $ 11,047
                                                       ========   ========


5.   CASH DISTRIBUTIONS

     The  Partnership  makes  quarterly  distributions  of 100% of its Available
     Cash,  as  defined  in the  Partnership  Agreement,  to  holders of limited
     partnership units  ("Unitholders") and the general partner.  Available Cash
     consists  generally of all the cash receipts of the  Partnership,  plus the
     beginning cash balance less all of its cash disbursements and reserves. The
     Partnership  expects to make  distributions of all Available Cash within 45
     days  after  the  end of each  quarter  to  Unitholders  of  record  on the
     applicable  record  date.  A cash  distribution  of $0.70  per unit for the
     fourth  quarter of 1999 was paid on February 14, 2000. A cash  distribution
     of $0.70 per unit for the first  quarter of 2000 was declared to holders of
     record on April 28, 2000 and is payable on May 15, 2000.


6.   CONTINGENCIES

     The operations of the Partnership  are subject to Federal,  state and local
     laws and regulations  relating to protection of the  environment.  Although
     the  Partnership  believes its  operations are in general  compliance  with
     applicable  environmental  regulations,   risks  of  additional  costs  and
     liabilities are inherent in pipeline and terminal operations, and there can
     be no assurance that significant costs and liabilities will not be incurred
     by the Partnership.  Moreover, it is possible that other developments, such
     as increasingly  stringent  environmental laws, regulations and enforcement
     policies  thereunder,  and  claims  for  damages  to  property  or  persons
     resulting  from  the  operations  of  the  Partnership,   could  result  in
     substantial costs and liabilities to the Partnership.

     Certain  subsidiaries  of the Partnership are defendants in a lawsuit filed
     in a Texas state court in 1997 by Grace Energy Corporation  ("Grace"),  the
     entity from which the Partnership acquired ST Services in 1993. The lawsuit
     involves  environmental  response and remediation  allegedly resulting from
     jet fuel leaks in the early  1970's from a pipeline.  The  pipeline,  which
     connected a former Grace  terminal with Otis Air Force Base,  was abandoned
     in 1973,  and the  connecting  terminal was sold to an unrelated  entity in
     1976.   Grace  alleges  that  it  has  incurred   since  1996  expenses  of
     approximately $3 million for response and remediation required by the State
     of Massachusetts  and that it expects to incur  additional  expenses in the
     future. On January 20, 2000, the Massachusetts  Department of Environmental
     Protection  notified  the  Partnership's  subsidiary  that it had reason to
     believe that the subsidiary was also a Potentially  Responsible  Party. The
     subsidiary  has replied to that letter denying any  responsibility  for the
     Massachusetts   response   and/or   remediation.   Future   expenses  could
     potentially  include claims by the United States  Government,  as described
     below.  Grace alleges that  subsidiaries  of the  Partnership  acquired the
     abandoned pipeline,  as part of the acquisition of ST Services in 1993, and
     assumed  responsibility  for  environmental  damages caused by the jet fuel
     leaks from the pipeline.  Grace is seeking a ruling that these subsidiaries
     are responsible for all present and future  remediation  expenses for these
     leaks and that Grace has no obligation to indemnify these  subsidiaries for
     these expenses. The case is set for trial in May 2000.

     The consistent position of the Partnership's  subsidiaries is that they did
     not acquire the abandoned  pipeline as part of the 1993 ST transaction  and
     did not assume any responsibility for the environmental damage. In an order
     granting  partial  summary  judgment,  the trial  judge has ruled  that the
     pipeline  was an asset  of the  company  acquired  by the  subsidiary.  The
     subsidiaries  are continuing  with their defense that the pipeline had been
     abandoned  prior to the  acquisition of ST Services and could not have been
     included  in  the  assets  they   acquired.   The   defendants   have  also
     counter-claimed  against  Grace for fraud and mutual  mistake,  among other
     defenses.  If they are  successful  at trial  with  their  defenses  and/or
     counterclaims, the judge's partial summary judgment order will be moot. The
     defendants believe they have certain rights to  indemnification  from Grace
     under the  acquisition  agreement  with Grace.  These rights include claims
     against  Grace for breaches of numerous  representations  in the  agreement
     including the  environmental  representations.  The  acquisition  agreement
     includes  Grace's  agreement to indemnify the  subsidiaries  against 60% of
     post-closing   environmental   remediation  costs,  subject  to  a  maximum
     indemnity payment of $10 million.

     The Otis Air Force Base is a part of the Massachusetts Military Reservation
     ("MMR"),  which  has  been  declared  a  Superfund  Site  pursuant  to  the
     Comprehensive  Environmental Response,  Compensation and Liability Act. The
     MMR Site contains nine groundwater  contamination  plumes, two of which are
     allegedly associated with the pipeline,  and various other waste management
     areas of  concern,  such as  landfills.  The United  States  Department  of
     Defense and the United States Coast Guard, pursuant to a Federal Facilities
     Agreement,  has been  responding to the Government  remediation  demand for
     most of the  contamination  problems at the MMR Site. Grace and others have
     also  received and  responded to formal  inquiries  from the United  States
     Government in connection with the environmental damages allegedly resulting
     from the jet fuel leaks. The  Partnership's  subsidiaries  have voluntarily
     responded  to an  invitation  from the  Government  to provide  information
     indicating  that  they  do not  own  the  pipeline.  In  connection  with a
     court-ordered mediation between Grace and the subsidiaries,  the Government
     advised  the  parties  in April 1999 that it has  identified  the two spill
     areas that it believes to be related to the pipeline that is the subject of
     the Grace suit. The Government  advised the parties that it believes it has
     incurred costs of approximately  $34 million,  and expects in the future to
     incur costs of  approximately  $55 million,  for  remediation of one of the
     spill areas. This amount was not intended to be a final accounting of costs
     or to include all  categories  of costs.  The  Government  also advised the
     parties that it could not at that time allocate its costs  attributable  to
     the second spill area. The  Partnership  believes that the ultimate cost of
     the  remediation,  while  substantial,  will be considerably  less than the
     Government has indicated.  The Partnership  also believes that, even if the
     lawsuit  determines  that the subsidiary is the owner of the pipeline,  the
     defendants have defenses to any claim of the Government.  Any claims by the
     Government  could  be  material  in  amount  and,  if made  and  ultimately
     sustained  against the Partnership's  subsidiaries,  could adversely affect
     the Partnership's ability to pay cash distributions to its Unitholders.

     The  Partnership   has   other   contingent   liabilities   resulting  from
     litigation,  claims and  commitments  incident  to the  ordinary  course of
     business.  Management  believes,  based on the advice of counsel,  that the
     ultimate  resolution  of such  contingencies  will  not  have a  materially
     adverse  effect on the  financial  position or results of operations of the
     Partnership.


7.   BUSINESS SEGMENT DATA

     The Partnership  conducts  business through two principal  operations;  the
     "Pipeline  Operations,"  which consists  primarily of the transportation of
     refined  petroleum  products in the Midwestern  states as a common carrier,
     and the  "Terminaling  Operations,"  which  provide  storage for  petroleum
     products, specialty chemicals and other liquids.

     The Partnership  measures segment profit as operating income.  Total assets
     are those controlled by each reportable segment.

                                                           Three Months Ended
                                                                March 31,
                                                         ----------------------
                                                            2000         1999
                                                         ---------    ---------
                                                             (in thousands)
     Business segment revenues:
        Pipeline operations                              $  15,248    $  15,164
        Terminaling operations                              21,432       21,681
                                                         ---------    ---------
                                                         $  36,680    $  36,845
                                                         =========    =========

     Business segment profit:
        Pipeline operations                              $   7,237    $   7,356
        Terminaling operations                               5,685        7,788
                                                         ---------    ---------
           Operating income                                 12,922       15,144

        Interest and other income, net                          59          244
        Interest expense                                    (3,019)      (3,509)
                                                         ---------    ---------
           Income before minority interest
               and income taxes                          $   9,962    $  11,879
                                                         =========    =========

                                                         March 31,   December 31
                                                           2000         1999
                                                         ---------    ---------
     Total assets:
        Pipeline operations                              $ 104,085    $ 104,774
        Terminaling operations                             260,879      261,179
                                                         ---------    ---------
                                                         $ 364,964    $ 365,953
                                                         =========    =========

<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES


Management's Discussion and Analysis of Financial Condition
and Results of Operations
--------------------------------------------------------------------------------

     This  discussion  should  be  read in  conjunction  with  the  consolidated
     financial statements of Kaneb Pipe Line Partners,  L.P. (the "Partnership")
     and notes thereto included elsewhere in this report.

     Operating Results:

     Pipeline Operations
                                                         Three Months Ended
                                                              March 31,
                                                     --------------------------
                                                       2000             1999
                                                     ---------        ---------
                                                           (in thousands)

          Revenues                                   $  15,248        $  15,164
          Operating costs                                5,814            5,792
          Depreciation and amortization                  1,293            1,264
          General and administrative                       904              752
                                                     ---------        ---------
             Operating income                        $   7,237        $   7,356
                                                     =========        =========


     Pipeline revenues are based on volumes shipped and the distances over which
     such  volumes are  transported.  For the three months ended March 31, 2000,
     pipeline  revenues were flat when compared to the same 1999 period.  Barrel
     miles  totaled 4.0 billion for each of the three month  periods ended March
     31, 2000 and 1999.

     For the three months ended March 31, 2000,  operating costs,  which include
     fuel and power costs, materials and supplies, maintenance and repair costs,
     salaries,  wages and employee benefits,  and property and other taxes, were
     consistent  with the  comparable  1999 period.  General and  administrative
     costs, which include managerial,  accounting,  and administrative personnel
     costs,  office rental and expense,  legal and professional  costs and other
     non-operating costs, increased slightly over the first quarter of 1999.

     Terminaling Operations
                                                        Three Months Ended
                                                              March 31,
                                                     --------------------------
                                                       2000             1999
                                                     ---------        ---------
                                                           (in thousands)

          Revenues                                   $  21,432        $  21,681
          Operating costs                               11,466           10,391
          Depreciation and amortization                  2,682            2,351
          General and administrative                     1,599            1,151
                                                     ---------        ---------
               Operating income                      $   5,685        $   7,788
                                                     =========        =========

     On February 1, 1999, the  Partnership  acquired six terminals in the United
     Kingdom from GATX Terminals  Limited for  approximately  $37.2 million plus
     transaction  costs and the assumption of certain  liabilities  (the "United
     Kingdom Terminal Acquisition"). The acquisition of the six locations, which
     have an aggregate  tankage capacity of 5.4 million  barrels,  was initially
     financed  by term loans from a bank.  $13.3  million of the term loans were
     repaid in July 1999 with the  proceeds  from a public  unit  offering  (See
     Liquidity  and  Capital  Resources).  Three  of  the  terminals,   handling
     petroleum products, chemicals and molten sulfur,  respectively,  operate in
     England.  The  remaining  three  facilities,  two in  Scotland  and  one in
     Northern Ireland, are primarily petroleum terminals.  All six terminals are
     served by deepwater marine docks.

     Terminaling  revenues  decreased by $0.2 million for the three month period
     ended March 31, 2000,  compared to the same 1999 period.  Revenue increases
     resulting from the United Kingdom and other 1999 terminal acquisitions were
     more than offset by decreases in tank utilization due to unfavorable market
     conditions.  Average  annual  tankage  utilized  for the three months ended
     March 31, 2000 decreased to 21.0 million  barrels from 21.9 million barrels
     for the  comparable  prior year period,  primarily  the result of unusually
     high utilization at the Partnership's largest petroleum storage facility in
     1999.  For the three  months  ended  March  31,  2000,  average  annualized
     revenues  per barrel of tankage  utilized  increased  to $4.09 per  barrel,
     compared to $3.95 per barrel for the same prior year period,  the result of
     the storage of a higher proportionate volume of specialty chemicals,  which
     are historically at higher per barrel rates than petroleum products.

     For the three month period ended March 31, 2000,  operating costs increased
     by $1.1 million when compared to the same 1999 period, primarily the result
     of the  February  1999 United  Kingdom  Terminal  Acquisition.  General and
     administrative costs for the three months ended March 31, 2000 increased by
     $0.4 million when compared to 1999, due also to the United Kingdom Terminal
     Acquisition and unusually high litigation costs.

     Total tankage  capacity (28.8 million  barrels at March 31, 2000) has been,
     and is  expected  to remain,  adequate to meet  existing  customer  storage
     requirements.  Customers consider factors such as location,  access to cost
     effective  transportation  and quality of service,  in addition to pricing,
     when selecting terminal storage.


     Liquidity and Capital Resources

     During  the  first  quarter  of 2000,  the  Partnership's  working  capital
     requirements for operations,  capital  expenditures and cash  distributions
     were funded through the use of internally generated funds.

     Cash  provided by  operations  was $18.1  million and $16.2 million for the
     periods ended March 31, 2000 and 1999,  respectively.  Capital expenditures
     (excluding  acquisitions)  were $2.3  million  for each of the three  month
     periods ended March 31, 2000 and 1999.  The  Partnership  anticipates  that
     routine  maintenance  capital  expenditures  will total  approximately  $12
     million  to $15  million  (excluding  acquisitions)  for  the  year  ending
     December 31, 2000.

     In July 1999, the Partnership issued 2.25 million limited partnership units
     in a public  offering at $30.75 per unit,  generating  approximately  $65.6
     million in net  proceeds.  A portion of the  proceeds  was used to repay in
     full the  Partnership's  $15.0 million  promissory  note, the $25.0 million
     revolving  credit facility and $18.3 million in term loans (including $13.3
     million  in  term  loans   resulting  from  the  United  Kingdom   Terminal
     Acquisition).

     The  Partnership  makes  distributions  of  100% of its  Available  Cash to
     Unitholders and the general partner.  Available Cash consists  generally of
     all  the  cash   receipts  less  all  cash   disbursements   and  reserves.
     Distributions  of $0.70 per unit were  declared to all  Unitholders  in the
     first  quarter of 2000 and $2.80 per unit was declared in the calendar year
     1999.

     The Partnership  expects to fund future cash  distributions and maintenance
     capital  expenditures  with cash and cash flows from operating  activities.
     Expansionary  capital  expenditures  are  expected  to  be  funded  through
     additional Partnership borrowings and/or future public unit offerings.

     Additional information relative to sources and uses of cash is presented in
     the financial statements included in this report.


     Allocation of Net Income and Earnings

     Net income or loss is allocated  between limited partner  interests and the
     general   partner  pro  rata  based  on  the   aggregate   amount  of  cash
     distributions declared (including general partner incentive distributions).
     Beginning in 1997,  distributions  by the  Partnership  of  Available  Cash
     reached  the Second  Target  Distribution,  as  defined in the  Partnership
     Agreement,  which entitled the general partner to receive certain incentive
     distributions at different levels of cash distributions.  Earnings per unit
     shown on the  consolidated  statements of income are calculated by dividing
     the limited partners' interest in net income by the weighted average number
     of units  outstanding.  If the allocation of income had been made as if all
     income  had been  distributed  in cash,  earnings  per unit would have been
     $0.52  and  $0.69  for the three  months  ended  March  31,  2000 and 1999,
     respectively.



<PAGE>
KANEB PIPE LINE PARTNERS, L.P. AND SUBSIDIARIES




--------------------------------------------------------------------------------



                           Part II - Other Information

     Item 6.      Exhibits and Reports on Form 8-K

         (a)      Exhibits.
                         27.        Financial Data Schedule

(b)      Reports on  Form 8-K

                  None.


                                    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.



                                         KANEB PIPE LINE PARTNERS, L.P.
                                         (Registrant)
                                         By  KANEB PIPE LINE COMPANY
                                         (Managing General Partner)


Date:      May 5, 2000                              //s//
                                         Jimmy L. Harrison
                                         Vice President and Controller