Exhibit 99.1


For immediate release For more information, contact:
                                                       Investor Relations
                                                       (972) 699-4041
                                                       Email: investor@kaneb.com

                  KANEB Reports Excellent First Quarter Results

DALLAS,  TX (May 9, 2005) - KANEB today  reported  results for the quarter ended
March 31, 2005. The KANEB Companies are Kaneb Services LLC (NYSE: KSL) and Kaneb
Pipe Line Partners,  L.P. (NYSE: KPP, "the  Partnership").  Kaneb Services LLC's
wholly  owned  subsidiary,  Kaneb Pipe Line  Company  LLC, is the  Partnership's
General Partner.

"KANEB delivered an outstanding first quarter. Our results,  exclusive of merger
costs,  delivered  a 15 percent  increase in the  Partnership's  income and a 16
percent  increase in KSL's income compared to the first quarter last year," said
John R.  Barnes,  chairman  and CEO of  KANEB.  "We are very  pleased  with this
performance.  The KANEB companies continue to build value and deliver growth for
our unitholders and shareholders."

On November 1, 2004,  Valero L.P. (NYSE: VLI) and the KANEB companies (NYSE: KPP
and NYSE: KSL) announced that they had executed  definitive  agreements to merge
Valero L.P.  and Kaneb Pipe Line  Partners,  L.P.,  and that  Valero  L.P.  will
purchase all of Kaneb Services' shares for cash. The agreements were approved by
the  unitholders  of Valero  L.P.  and Kaneb Pipe Line  Partners,  L.P.  and the
shareholders of Kaneb Services LLC at special  meetings held March 11, 2005. The
transaction  is  anticipated  to  close  in the  second  quarter  2005.  Further
information  about the  transaction  is provided  on the Valero L.P.  website at
www.valerolp.com,  and a  link  to the  management  presentation  regarding  the
transaction is available on the KANEB website at www.kaneb.com.

1Q 2005 RESULTS FOR KANEB SERVICES LLC

For the  quarter  ended  March 31,  2005,  Kaneb  Services  LLC's  distributions
received from KPP (see Supplemental Information in the attached table) increased
to $7.1 million,  compared  with $6.8 million for the first  quarter  2004.  KSL
reported first quarter net income of $6.6 million, or $0.55 per share,  compared
with $6.0  million,  or $0.50 per share,  for the same period  last year.  First
quarter income before merger costs (see Supplemental Information in the attached
table) was $6.9 million,  or $0.57 per share,  compared  with $6.0  million,  or
$0.50 per share, for first quarter 2004.

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.  Its 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 that manages and operates the pipeline and terminaling  assets
of KPP.


1Q 2005 RESULTS FOR KANEB PIPE LINE PARTNERS, L.P.

Kaneb Pipe Line  Partners,  L.P.  reported  revenues  of $183.0  million for the
quarter ended March 31, 2005, compared with $146.4 million for the first quarter
2004.  Net  income for the  quarter  was $21.8  million  (after  merger  costs),
compared with $20.8  million for the same period last year.  Net income per unit
for the quarter was $0.68, compared with $0.65 for the first quarter 2004. First
quarter income before merger costs (see Supplemental Information in the attached
table) was $23.9 million,  or $0.76 per unit,  compared with $20.8  million,  or
$0.65 per unit,  for first  quarter 2004.  EBITDA  increased  (see  Supplemental
Information  in the attached  table) to $49.3 million for the quarter,  compared
with $46.5 million for the first quarter 2004.

"The  Partnership  recently  completed  another  strategic  acquisition of a 1.1
million barrel capacity terminal through our newly formed Dutch subsidiary. This
acquisition gives KANEB a substantial  initial terminal in the growing Amsterdam
harbor area, as well as a large amount of additional land for future expansion,"
said Edward D.  Doherty,  chairman  and CEO of Kaneb Pipe Line  Company LLC, the
Partnership's General Partner.

"The Partnership  operations had an outstanding  quarter.  We increased revenues
overall by $36.6  million,  operating  income by $1.9  million and net income by
$1.0 million," said Michael L. Rose, chief operating  officer of Kaneb Pipe Line
Company LLC.  "We're  extremely proud of the Kaneb operating team. Even with the
additional  requirements associated with the merger, the team still outperformed
last year's results by a great margin. That's dedication."

Pipeline  revenues for the first quarter 2005 (see  Supplemental  Information in
the attached  table) were $30.1  million,  compared  with $27.9  million for the
first  quarter last year.  Pipeline  operating  income for the quarter was $11.7
million,  compared with $11.2  million for the same period last year.  Petroleum
pipeline  barrel miles shipped in the first  quarter were 5.2 billion,  compared
with 5.1 billion in the first quarter 2004.

Terminaling revenues for the first quarter 2005 (see Supplemental Information in
the attached  table) were $69.1  million,  compared  with $62.8  million for the
first  quarter  last  year.  Terminaling  operating  income  was $18.7  million,
compared with $18.5 million for the same period last year.  Terminaling  average
annual  barrels of tankage  utilized  in the first  quarter  were 50.5  million,
compared with 48.2 million in the first quarter 2004, and the average annualized
revenues per barrel of tankage  utilized  for the quarter  were $5.55,  compared
with $5.24 for the first quarter last year.

Product sales revenues for the first quarter 2005 (see Supplemental  Information
in the attached  table) were $83.8 million,  compared with $55.7 million for the
first quarter last year. Product sales operating income for the quarter was $4.0
million, compared with $2.9 million for the first quarter 2004.


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,  the United Kingdom and The  Netherlands.  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.

Certain  of the  Company's  statements  in this  press  release  are not  purely
historical,  and as such are "forward-looking  statements" within the meaning of
the Private  Securities  Litigation Reform Act of 1995. These include statements
regarding management's intentions,  plans, beliefs,  expectations or projections
of the  future.  Forward-looking  statements  involve  risks and  uncertainties,
including  without  limitation,  the various  risks  inherent  in the  Company's
business,  and other risks and  uncertainties  detailed from time to time in the
Company's  periodic  reports filed with the Securities and Exchange  Commission.
One or more of these factors have  affected,  and could in the future affect the
Company's  business and  financial  results in future  periods,  and could cause
actual results to differ materially from plans and projections.  There can be no
assurance that the  forward-looking  statements made in this document will prove
to be accurate,  and issuance of such  forward-looking  statements should not be
regarded as a  representation  by the  Company,  or any other  person,  that the
objectives  and  plans of the  Company  will be  achieved.  All  forward-looking
statements  made in this  press  release  are  based  on  information  presently
available to  management,  and the Company  assumes no  obligation to update any
forward-looking statements.

                                       ###

<PAGE>
                               KANEB SERVICES LLC
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                        Three Months
                                                                       Ended March 31,
                                                                   ----------------------
                                                                      2005         2004
                                                                   ---------    ---------
<S>                                                                <C>          <C>
Consolidated revenues:
        Services                                                   $  99,222    $  90,698
        Products                                                     191,804      142,481
                                                                   ---------    ---------
            Total consolidated revenues                              291,026      233,179
                                                                   ---------    ---------
Consolidated costs and expenses:
        Cost of products sold                                        182,997      136,431
        Operating costs                                               46,622       43,424
        Depreciation and amortization                                 14,838       13,907
        General and administrative                                     8,976        6,502
        Valero merger costs                                            2,422         --
                                                                   ---------    ---------
            Total consolidated costs and expenses                    255,855      200,264
                                                                   ---------    ---------
Consolidated operating income                                         35,171       32,915

Consolidated interest and other income                                   206           32

Consolidated interest expense                                        (11,348)     (10,629)
                                                                   ---------    ---------
Consolidated income before income taxes and interest of outside
        non-controlling partners in KPP's net income                  24,029       22,318

Income tax expense                                                    (1,526)      (1,163)

Interest of outside non-controlling partners in KPP's net income     (15,854)     (15,160)
                                                                   ---------    ---------
Net income                                                         $   6,649    $   5,995
                                                                   =========    =========
Earnings per share:
        Basic                                                      $    0.56    $    0.51
                                                                   =========    =========
        Diluted                                                    $    0.55    $    0.50
                                                                   =========    =========

</TABLE>



<PAGE>
                               KANEB SERVICES LLC
                            SUPPLEMENTAL INFORMATION
                    (In thousands, except per share amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                           Three Months
                                                                          Ended March 31,
                                                                       ----------------------
                                                                         2005         2004
                                                                       ---------    ---------
<S>                                                                    <C>          <C>
Net Income                                                             $   6,649    $   5,995
Parent Company Valero merger costs *                                         293         --
                                                                       ---------    ---------
Income before Parent Company Valero merger costs                       $   6,942    $   5,995
                                                                       =========    =========
Diluted earnings per share before Parent Company Valero merger costs   $    0.57    $    0.50
                                                                       =========    =========
Weighted average diluted shares outstanding                               12,123       11,921
                                                                       =========    =========
Consolidated revenues (including KPP):
        Pipeline                                                       $  30,092    $  27,903
        Terminaling                                                       69,130       62,795
        Product Marketing                                                191,804      142,481
                                                                       ---------    ---------
                                                                       $ 291,026    $ 233,179
                                                                       =========    =========
Consolidated operating income (including KPP):
        Pipeline                                                       $  11,737    $  11,210
        Terminaling                                                       18,727       18,484
        Product Marketing                                                  5,567        3,754
        General and administrative                                          (567)        (533)
        Parent Company Valero merger costs                                  (293)        --
                                                                       ---------    ---------
                                                                       $  35,171    $  32,915
                                                                       =========    =========

Supplemental cash flow information:
        Distributions received from KPP                                $   7,097    $   6,838
        General and administrative                                          (303)        (533)
        Parent Company Valero merger costs                                  (293)        --
        Parent Company interest expense                                     (179)        (137)
                                                                       ---------    ---------
                                                                       $   6,322    $   6,168
                                                                       =========    =========
</TABLE>

*    Does not include the  Company's  allocated  portion of KPP's Valero  merger
     costs.



<PAGE>
                         KANEB PIPE LINE PARTNERS, L.P.
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per unit amounts)
                                  (Unaudited)


                                                             Three Months
                                                            Ended March 31,
                                                         ----------------------
                                                           2005         2004
                                                         ---------    ---------
Revenues:
        Services                                         $  99,222    $  90,698
        Products                                            83,796       55,715
                                                         ---------    ---------
              Total revenues                               183,018      146,413
                                                         ---------    ---------
Costs and expenses:
        Cost of products sold                               77,085       51,039
        Operating costs                                     46,402       43,210
        Depreciation and amortization                       14,834       13,898
        General and administrative                           8,136        5,704
        Valero merger costs                                  2,129         --
                                                         ---------    ---------
              Total costs and expenses                     148,586      113,851
                                                         ---------    ---------

Operating income                                            34,432       32,562

Interest and other income                                      204            5

Interest expense                                           (11,105)     (10,436)
                                                         ---------    ---------
Income before minority interest and income taxes            23,531       22,131

Minority interest in net income                               (220)        (210)

Income tax expense                                          (1,514)      (1,152)
                                                         ---------    ---------
Net income                                                  21,797       20,769

General partner's interest in net income                    (2,466)      (2,282)
                                                         ---------    ---------
Limited partners' interest in net income                 $  19,331    $  18,487
                                                         =========    =========

Allocation of net income per unit                        $    0.68    $    0.65
                                                         =========    =========
Weighted average number of Partnership units
        outstanding                                         28,328       28,318
                                                         =========    =========



<PAGE>
                         KANEB PIPE LINE PARTNERS, L.P.
                            SUPPLEMENTAL INFORMATION
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                                             Three Months
                                                                            Ended March 31,
                                                                         ----------------------
                                                                           2005         2004
                                                                         ---------    ---------
<S>                                                                      <C>          <C>
Net Income                                                               $  21,797    $  20,769
Valero merger costs, net of minority interest                                2,108         --
                                                                         ---------    ---------
Income before Valero merger costs                                        $  23,905    $  20,769
                                                                         =========    =========
Allocation of income per unit before Valero merger costs                 $    0.76    $    0.65
                                                                         =========    =========
Revenues (in 000s):
        Pipeline                                                         $  30,092    $  27,903
        Terminaling                                                         69,130       62,795
        Product sales                                                       83,796       55,715
                                                                         ---------    ---------
                                                                         $ 183,018    $ 146,413
                                                                         =========    =========
Operating income (in 000s):
        Pipeline                                                         $  11,737    $  11,210
        Terminaling                                                         18,727       18,484
        Product sales                                                        3,968        2,868
                                                                         ---------    ---------
                                                                         $  34,432    $  32,562
                                                                         =========    =========
Depreciation and amortization (in 000s):
        Pipeline                                                         $   3,792    $   3,599
        Terminaling                                                         10,824       10,084
        Product sales                                                          218          215
                                                                         ---------    ---------
                                                                         $  14,834    $  13,898
                                                                         =========    =========
Capital expenditures (in 000s):
        Maintenance and environmental                                    $   7,368    $   5,721
        Expansion                                                            1,375        1,626
                                                                         ---------    ---------
                                                                         $   8,743    $   7,347
                                                                         =========    =========
EBITDA (in 000s):
        Net income                                                       $  21,797    $  20,769
        Interest expense                                                    11,105       10,436
        Income tax expense                                                   1,514        1,152
        Depreciation and amortization                                       14,834       13,898
        Interest and other income                                             (204)          (5)
        Minority interest in net income                                        220          210
                                                                         ---------    ---------
                                                                         $  49,266    $  46,460
                                                                         =========    =========
Pipeline operating statistics:
        Barrel miles shipped on petroleum pipelines
                (in billions)                                                  5.2          5.1
                                                                         =========    =========
        Volumes shipped on anhydrous ammonia pipeline
                (in thousands of tons)                                         297          297
                                                                         =========    =========
Terminaling operating statistics:
        Average barrels of tankage utilized (in millions)                     50.5         48.2
                                                                         =========    =========
        Average annualized revenues per barrel of tankage
                utilized                                                 $    5.55    $    5.24
                                                                         =========    =========
</TABLE>