Exhibit 10.1


                                SUPPLEMENT TO THE


                                    KANEB LLC


                          2002 LONG TERM INCENTIVE PLAN






                        DATED EFFECTIVE OCTOBER 31, 2004















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                           SUPPLEMENT TO THE KANEB LLC

                          2002 LONG TERM INCENTIVE PLAN


     WHEREAS,  at the  request  of Kaneb  Pipe Line  Company  LLC,  Kaneb LLC, a
Delaware  limited  liability  company,  established the Kaneb LLC 2002 Long Term
Incentive Plan, dated effective as of July 18, 2002 and amended on June 30, 2003
(the "Original Plan"), for John R. Barnes so as to offer him a further incentive
to increase  the value of Kaneb Pipe Line  Partners,  L.P.,  a Delaware  limited
partnership;

     WHEREAS, on July 30, 2002, John R. Barnes  transferred,  in accordance with
section 8.7 of the Original  Plan,  his Plan  benefits to a trust (the  "Trust")
formed  pursuant to that certain  Agreement of Trust,  dated as of September 28,
1999 with Commonwealth Trust Company as trustee;

     WHEREAS,  the parties to the Original Plan desire to  supplement  the terms
and  provisions of such plan by entering  into this  Supplement to the Kaneb LLC
2002 Long Term Incentive Plan (the "Supplement");

     WHEREAS, the Original Plan is incorporated herein by this reference and the
Original  Plan,  as  supplemented  by this  Supplemental,  is herein  called the
"Plan"; and

     WHEREAS,  it is intended  that the Plan shall  constitute  a bonus  program
within the meaning of Department of Labor Regulation section 2510.3-2(c) that is
exempt from coverage under the Employee  Retirement Income Security Act of 1974,
as amended;

     NOW, THEREFORE, Kaneb LLC adopts and supplements the Plan as follows.

                                   ARTICLE I

                                   DEFINITIONS

     1.1 For all purposes of this Supplement,  capitalized terms used herein and
not otherwise  defined  herein shall have the meanings  assigned in the Original
Plan.

     1.2 Section 2.2 of the Original Plan is hereby  amended and restated in its
entirety to read as follows:

          "2.2  `Adjusted  Ending  Market  Capitalization  Value' is the  Ending
     Market  Capitalization  Value  reduced  by  all  proceeds  received  by the
     Partnership  from the sale of Units (the offering  price  multiplied by the
     number of units issued) during the Measurement  Period and increased by the
     cost of any  Units  acquired  by the  Partnership  during  the  Measurement
     Period."

     1.3 Section 2.18 of the Original Plan is hereby amended and restated in its
entirety to read as follows:

          "2.18 `Payment Amount' means, if calculated

          (a) at any time on or after a Change Of Control,  the death of John R.
     Barnes,  or  the  disability  of  John  R.  Barnes  (as  determined  at the
     discretion  of the Board),  an amount equal to two percent of the result of
     the Adjusted Ending Market Capitalization Value minus $805,723,775, or

          (b) absent a Change of Control,  the death of John R.  Barnes,  or the
     disability of John R. Barnes (as determined at the discretion of the Board)
     and

               (i) prior to December 31, 2002, $ - 0 -,

               (ii) after  December  30,  2002,  but prior to December 31, 2003,
          twenty  percent (20 %) of an amount equal to two percent of the result
          of the Adjusted Ending Market Capitalization Value minus $805,723,775,

               (iii) after  December 30,  2003,  but prior to December 31, 2004,
          forty percent (40%) of an amount equal to two percent of the result of
          the Adjusted Ending Market Capitalization Value minus $805,723,775,

               (iv) after  December  30,  2004,  but prior to December 31, 2005,
          sixty percent (60%) of an amount equal to two percent of the result of
          the Adjusted Ending Market Capitalization Value minus $805,723,775,

               (v) after  December  30,  2005,  but prior to December  31, 2006,
          eighty  percent  (80%) of an amount equal to two percent of the result
          of the Adjusted Ending Market Capitalization Value minus $805,723,775,

               (vi) after  December 30, 2006,  an amount equal to two percent of
          the result of the Adjusted  Ending Market  Capitalization  Value minus
          $805,723,775."

     1.4 The following are definitions used in this Supplement:

          (a)  "Average  Closing  Price" shall have the meaning set forth in the
     Vortex Agreement.

          (b)  "Condition  Date"  shall have the meaning set forth in the Vortex
     Agreement.

          (c) "Vortex  Agreement" shall mean that certain  Agreement and Plan of
     Merger,  dated as of October 31, 2004, by and among Valero L.P.,  Riverwalk
     Logistics,  L.P., Valero GP, LLC, VLI Sub B, Kaneb Pipeline Partners LP and
     Kaneb Pipeline Company LLC.

          (d) "Vortex Consideration" is the amount equal to:

               (i) $61.50, if the Average Closing Price as of the Condition Date
          is greater than $54.39 and less than $60.11;

               (ii) 1.1307  multiplied  by the Average  Closing  Price as of the
          Condition  Date, if the Average Closing Price as of the Condition Date
          is equal to or less than $54.39; or

               (iii) 1.0231  multiplied  by the Average  Closing Price as of the
          Condition  Date, if the Average Closing Price as of the Condition Date
          is equal to or greater than $60.11.

          (e) "VLI Distribution" is the amount equal to the greater of (i) $3.42
     or (ii) the annualized  amount of the quarterly  distribution to be paid by
     Valero L.P., a Delaware  limited  partnership,  as most recently  announced
     prior to the Condition Date.

          (f) "Vortex Distribution" is the amount equal to:

               (i) the VLI Distribution  multiplied by a quotient, the numerator
          of which is $61.50 and the denominator of which is the Average Closing
          Price as of the  Condition  Date (such  quotient  to be rounded to the
          nearest  ten  thousandth),  if the  Average  Closing  Price  as of the
          Condition Date is greater than $54.39 and less than $60.11;

               (ii) the VLI  Distribution  multiplied by 1.1307,  if the Average
          Closing  Price  as of the  Condition  Date is  equal  to or less  than
          $54.39; or

               (iii) the VLI Distribution  multiplied by 1.0231,  if the Average
          Closing  Price as of the  Condition  Date is equal to or greater  than
          $60.11.

                                   ARTICLE II

               CALCULATION AND PAYMENT OF BENEFIT IN THE EVENT OF
                           A VORTEX CHANGE OF CONTROL

     2.1 If the Maturity Date is the date on which a Change of Control occurs as
a result of the  consummation  of the  transactions  contemplated  by the Vortex
Agreement  (the  "Vortex  Change  of  Control"),  the  Employer  shall  pay  the
Participant the greater of (a) or (b), where (a) is the Payment Amount,  and (b)
is an amount  equal to two percent of the result of the Adjusted  Ending  Market
Capitalization  Value  minus  $805,723,775,  with the  following  changes to the
definitions in the Plan:

          (a) "Average Ending Yield" shall mean the yield calculated by dividing
     the Vortex Distribution by the Vortex Consideration.

          (b) "Distribution" means the Vortex Distribution.

          (c) "Ending  Market  Capitalization  Value" means the Adjusted  Ending
     Price multiplied by the number of Units outstanding at the close of trading
     on the NYSE full trading day immediately preceding the Condition Date.

          (d) "Ending  PMLP Yield"  means the PMLP Yield at the close of trading
     on the NYSE full trading day  immediately  preceding the Condition Date, or
     if PMLP Yield is not calculated on that date, the arithmetic mean of yields
     calculated on that date, for the partnerships last used in calculating PMLP
     Yield.

     2.2 In the event of a Vortex  Change of Control the amount of Plan benefits
to be paid to the Participant shall be calculated in accordance with Section 2.1
of this Supplement in lieu of Section 4.1 of the Original Plan.

                                  ARTICLE III

                                  MISCELLANEOUS

     3.1 Each reference in the Original Plan shall, unless the context otherwise
requires, mean the Original Plan as supplemented by this Supplement.

     3.2 Except as expressly  supplemented and amended hereby, the Original Plan
shall  continue  in full  force and  effect in  accordance  with the  provisions
thereof,  and the Original Plan, as supplemented  and amended hereby,  is in all
respects hereby  ratified and confirmed.  This Supplement and all its provisions
shall be deemed a part of the  Original  Plan in the  manner  and to the  extent
herein and therein provided.

     3.3 This Supplement may be executed in any number of  counterparts,  all of
which together make and shall  constitute one and the same instrument and any of
the parties hereto may execute this Supplement by signing any such counterpart.

     3.4 The validity,  interpretation,  construction and  enforceability of the
Plan shall be governed by the laws of the State of Texas.


                         (signatures on following page)

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     IN WITNESS  WHEREOF,  Kaneb LLC has caused this Agreement to be executed by
its authorized officer, effective as of October 31, 2004.

                                      KANEB LLC



                                      By    //s//  HOWARD C. WADSWORTH
                                      Name:  Howard C. Wadsworth
                                      Title: Vice President



ACCEPTED BY THE PARTICIPANT

By:     Commonwealth Trust Company, as trustee
        of the Trust

By:   //s//  PETER A. HORTY
Name:   Peter A. Horty
Title:  President