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

                                  UNITED STATES
                       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

                  For the Quarterly Period Ended March 31, 2005

                                       OR

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


                        Commission File 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 principal executive offices, including zip code)

                                 (972) 699-4062
              (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
                     -------                           -------

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

                 Yes    X                           No
                     -------                           -------

Number of Units of the Registrant outstanding at April 29, 2005:  28,327,590


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

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


FORM 10-Q
QUARTER ENDED MARCH 31, 2005
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                         Page No.
                           Part I. Financial Information

Item 1.           Financial Statements (Unaudited)
<S>               <C>                                                                                    <C>
                  Consolidated Statements of Income - Three Months Ended
                      March 31, 2005 and 2004                                                                1

                  Condensed Consolidated Balance Sheets - March 31, 2005
                      and December 31, 2004                                                                  2

                  Condensed Consolidated Statements of Cash Flows - Three
                      Months Ended March 31, 2005 and 2004                                                   3

                  Notes to Consolidated Financial Statements                                                 4

Item 2.           Management's Discussion and Analysis of
                      Financial Condition and Results of Operations                                         13

Item 3.           Quantitative and Qualitative Disclosure About Market Risk                                 24

Item 4.           Controls and Procedures                                                                   24

                           Part II.  Other Information

Item 6.           Exhibits                                                                                  25

</TABLE>

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

CONSOLIDATED STATEMENTS OF INCOME
(In Thousands -- Except Per Unit Amounts)
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                       ----------------------------
                                                                                           2005           2004
                                                                                       ------------   -------------
<S>                                                                                    <C>            <C>
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                                                               10,265           5,704
                                                                                       ------------   -------------
        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
                                                                                       ============   =============


</TABLE>

                 See notes to consolidated financial statements.
                                        1

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


CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                              March 31,             December 31,
                                                                                2005                    2004
                                                                         -----------------       ------------------
                                                                             (Unaudited)
<S>                                                                        <C>                   <C>
            ASSETS
Current assets:
    Cash and cash equivalents                                              $        38,856       $        34,336
    Accounts receivable                                                             68,282                71,035
    Inventories                                                                      6,746                15,519
    Prepaid expenses and other                                                       9,662                12,371
                                                                           ---------------       ---------------
        Total current assets                                                       123,546               133,261
                                                                           ---------------       ---------------

Property and equipment                                                           1,459,347             1,450,972
Less accumulated depreciation                                                      316,535               302,381
                                                                           ---------------       ---------------
    Net property and equipment                                                   1,142,812             1,148,591
                                                                           ---------------       ---------------

Investment in affiliates                                                            26,751                25,939

Excess of cost over fair value of net assets of
    acquired businesses and other assets                                            16,712                17,525
                                                                           ---------------       ---------------
                                                                           $     1,309,821       $     1,325,316
                                                                           ===============       ===============


                LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
    Accounts payable                                                       $        42,528       $        44,071
    Accrued expenses                                                                37,440                42,573
    Accrued distributions payable                                                   26,960                26,960
    Accrued interest payable                                                         8,625                 9,365
    Payable to general partner                                                       4,007                 4,528
                                                                           ---------------       ---------------
        Total current liabilities                                                  119,560               127,497
                                                                           ---------------       ---------------

Long-term debt                                                                     671,016               671,952

Other liabilities and deferred taxes                                                43,362                44,386

Minority interest                                                                      949                   984

Commitments and contingencies

Partners' capital                                                                  474,934               480,497
                                                                           ---------------       ---------------
                                                                           $     1,309,821       $     1,325,316
                                                                           ===============       ===============

</TABLE>

                 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)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                            Three Months Ended
                                                                                                 March 31,
                                                                                       ----------------------------
                                                                                           2005           2004
                                                                                       ------------   -------------

<S>                                                                                    <C>            <C>
Operating activities:
    Net income                                                                         $     21,797   $      20,769
    Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation and amortization                                                     14,834          13,898
           Minority interest in net income                                                      220             210
           Equity in earnings of affiliates, net of distributions                              (812)         (1,638)
           Deferred income taxes                                                                558             (53)
           Changes in working capital components                                              4,716            (692)
                                                                                       ------------   -------------
               Net cash provided by operating activities                                     41,313          32,494
                                                                                       ------------   -------------
Investing activities:
    Capital expenditures                                                                     (8,743)         (7,347)
    Other                                                                                    (1,090)           (884)
                                                                                       ------------   -------------
               Net cash used in investing activities                                         (9,833)         (8,231)
                                                                                       ------------   -------------
Financing activities:
    Distributions, including minority interest                                              (26,960)        (26,344)
                                                                                       ------------   -------------
               Net cash used in financing activities                                        (26,960)        (26,344)
                                                                                       ------------   -------------
Increase (decrease) in cash and cash equivalents                                              4,520          (2,081)
Cash and cash equivalents at beginning of period                                             34,336          38,626
                                                                                       ------------   -------------
Cash and cash equivalents at end of period                                             $     38,856   $      36,545
                                                                                       ============   =============
Supplemental cash flow information - cash paid for interest                            $     11,571   $      10,738
                                                                                       ============   =============


</TABLE>

                 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

     KanebPipe  Line  Partners,  L.P.  (the  "Partnership"),  a  master  limited
     partnership,  owns and operates a refined petroleum products and fertilizer
     pipeline  business,  a petroleum products and specialty liquids storage and
     terminaling  business and a petroleum  product sales operation.  Kaneb Pipe
     Line Company LLC ("KPL"),  a wholly owned  subsidiary of Kaneb Services LLC
     ("KSL"),  manages and controls the Partnership  through its general partner
     interest  and an 18% (at March 31,  2005)  limited  partner  interest.  The
     Partnership  operates through Kaneb Pipe Line Operating  Partnership,  L.P.
     ("KPOP"),  a  limited  partnership  in which  the  Partnership  holds a 99%
     interest as limited  partner.  KPL owns a 1% interest as general partner of
     the  Partnership  and a 1%  interest as general  partner of KPOP.  KPL's 1%
     interest in KPOP is  reflected as the  minority  interest in the  financial
     statements.

     The  unaudited   condensed   consolidated   financial   statements  of  the
     Partnership for the three month periods ended March 31, 2005 and 2004, have
     been prepared in accordance with accounting  principles  generally accepted
     in the United States of America.  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,  2004.  In  the  opinion  of  the  Partnership's
     management,  the accompanying  condensed  consolidated financial statements
     contain all of 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, 2005, and the
     consolidated  results of their  operations  and cash flows for the  periods
     ended March 31, 2005 and 2004. Operating results for the three months ended
     March 31, 2005 are not  necessarily  indicative  of the results that may be
     expected for the year ending December 31, 2005.


2.   VALERO L.P. MERGER AGREEMENT

     On October  31,  2004,  Valero  L.P.  and the  Partnership  entered  into a
     definitive  agreement  to merge  (the "KPP  Merger")  Valero  L.P.  and the
     Partnership.  Under the  terms of the  agreement,  each  holder of units of
     limited  partnership  interests in the Partnership will receive a number of
     Valero L.P. common units based on an exchange ratio that fluctuates  within
     a fixed range to provide $61.50 in value of Valero L.P. units for each unit
     of the  Partnership.  The actual  exchange  ratio will be determined at the
     time of the closing of the proposed  merger and is subject to a fixed value
     collar of plus or minus  five  percent  of Valero  L.P.'s per unit price of
     $57.25 as of  October  7, 2004.  Should  Valero  L.P.'s per unit price fall
     below  $54.39 per unit,  the  exchange  ratio will  remain  fixed at 1.1307
     Valero L.P. units for each unit of the Partnership. Likewise, should Valero
     L.P.'s  per unit  price  exceed  $60.11  per unit of the  Partnership,  the
     exchange  ratio will remain fixed at 1.0231 Valero L.P. units for each unit
     of the Partnership.

     In a separate definitive agreement, on October 31, 2004, Valero L.P. agreed
     to acquire  by merger  (the "KSL  Merger")  all of the  outstanding  common
     shares of KSL for cash.  Under the terms of that agreement,  Valero L.P. is
     offering to  purchase  all of the  outstanding  shares of KSL at $43.31 per
     share.

     The  completion  of the KPP Merger is subject to the  customary  regulatory
     approvals   including   those   under   the   Hart-Scott-Rodino   Antitrust
     Improvements  Act.  The  completion  of the KPP  Merger is also  subject to
     completion  of the KSL Merger.  All  required  unitholder  and  shareholder
     approvals have been obtained.  Upon completion of the mergers,  the general
     partner of the combined  partnership  will be owned by affiliates of Valero
     Energy  Corporation  and the  Partnership  and KSL will become wholly owned
     subsidiaries of Valero L.P.


3.   COMPREHENSIVE INCOME

     Comprehensive income for the three months ended March 31, 2005 and 2004, is
     as follows:

<TABLE>
<CAPTION>

                                                                                       Three Months Ended
                                                                                            March 31,
                                                                                ----------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                         (in thousands)

<S>                                                                             <C>                <C>
     Net income                                                                 $      21,797      $       20,769
     Foreign currency translation adjustment                                             (768)               (233)
     Interest rate hedging transaction                                                     33                  45
                                                                                -------------      --------------
     Comprehensive income                                                       $      21,062      $       20,581
                                                                                =============      ==============
</TABLE>

     Accumulated other  comprehensive  income aggregated $15.5 million and $16.2
     million at March 31, 2005 and December 31, 2004, respectively.


4.   CASH DISTRIBUTIONS

     The  Partnership  makes  quarterly  distributions  of 100% of its available
     cash,  as  defined  in its  partnership  agreement,  to  holders of limited
     Partnership  units  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 $0.855 per unit with respect
     to the  fourth  quarter  of 2004  was paid on  February  14,  2005.  A cash
     distribution  of $0.855 per unit with respect to the first  quarter of 2005
     was declared to holders of record on April 30, 2005 and will be paid on May
     13, 2005.


5.   CONTINGENCIES

     The operations of the Partnership  are subject to Federal,  state and local
     laws and  regulations  in the United States and various  foreign  locations
     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 were sued 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 costs 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 in Massachusetts
     (the "Otis pipeline" or the "pipeline"),  ceased operations in 1973 and was
     abandoned  before  1978,  when  the  connecting  terminal  was  sold  to an
     unrelated  entity.  Grace  alleged  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  allegedly
     caused by the jet fuel  leaks.  Grace  sought a ruling from the Texas court
     that these subsidiaries are responsible for all liabilities,  including all
     present and future  remediation  expenses,  associated with these leaks and
     that Grace has no  obligation  to indemnify  these  subsidiaries  for these
     expenses. In the lawsuit, Grace also sought indemnification for expenses of
     approximately $3.5 million that it had incurred since 1996 for response and
     remediation  required  by the  State of  Massachusetts  and for  additional
     expenses that it expects to incur in the future. The consistent position of
     the  Partnership's  subsidiaries  has been  that they did not  acquire  the
     abandoned  pipeline  as  part  of the  1993 ST  Services  transaction,  and
     therefore did not assume any  responsibility  for the environmental  damage
     nor any liability to Grace for the pipeline.

     At the end of the trial,  the jury  returned a verdict  including  findings
     that (1) Grace had breached a provision of the 1993  acquisition  agreement
     by  failing  to  disclose  matters  related  to the  pipeline,  and (2) the
     pipeline was  abandoned  before 1978 -- 15 years  before the  Partnership's
     subsidiaries  acquired ST Services.  On August 30, 2000,  the Judge entered
     final judgment in the case that Grace take nothing from the subsidiaries on
     its  claims   seeking   recovery  of   remediation   costs.   Although  the
     Partnership's  subsidiaries  have not incurred  any expenses in  connection
     with  the  remediation,   the  court  also  ruled,  in  effect,   that  the
     subsidiaries  would not be  entitled to  indemnification  from Grace if any
     such expenses were incurred in the future.  Moreover, the Judge let stand a
     prior summary  judgment  ruling that the pipeline was an asset  acquired by
     the Partnership's  subsidiaries as part of the 1993 ST Services transaction
     and that any  liabilities  associated  with the pipeline  would have become
     liabilities of the  subsidiaries.  Based on that ruling,  the Massachusetts
     Department of  Environmental  Protection  and Samson  Hydrocarbons  Company
     (successor  to  Grace  Petroleum  Company)  wrote  letters  to ST  Services
     alleging its responsibility for the remediation,  and ST Services responded
     denying  any  liability  in  connection  with this  matter.  The Judge also
     awarded  attorney  fees to  Grace  of more  than  $1.5  million.  Both  the
     Partnership's  subsidiaries and Grace have appealed the trial court's final
     judgment  to the Texas  Court of  Appeals  in Dallas.  In  particular,  the
     subsidiaries  have filed an appeal of the  judgment  finding  that the Otis
     pipeline and any liabilities  associated with the pipeline were transferred
     to them as well as the award of attorney fees to Grace.

     On April 2, 2001,  Grace filed a petition in  bankruptcy,  which created an
     automatic  stay of actions  against  Grace.  This automatic stay covers the
     appeal of the Dallas litigation,  and the Texas Court of Appeals has issued
     an order staying all  proceedings of the appeal because of the  bankruptcy.
     Once that stay is lifted, the Partnership's  subsidiaries that are party to
     the lawsuit intend to resume vigorous prosecution of the appeal.

     The Otis Air Force Base is a part of the Massachusetts Military Reservation
     ("MMR Site"),  which has been declared a Superfund Site pursuant to CERCLA.
     The MMR Site contains a number of groundwater  contamination plumes, two of
     which are allegedly  associated  with the Otis pipeline,  and various other
     waste  management  areas of concern,  such as landfills.  The United States
     Department of Defense, 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  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 Partnership's  subsidiaries,  the Government  advised
     the  parties in April 1999 that it has  identified  two spill areas that it
     believes  to be related to the  pipeline  that is the  subject of the Grace
     suit.  The  Government at that time advised the parties that it believed it
     had incurred costs of approximately $34 million, and expected 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.

     By letter  dated July 26, 2001,  the United  States  Department  of Justice
     ("DOJ")   advised  ST  Services  that  the   Government   intends  to  seek
     reimbursement  from ST Services under the  Massachusetts  Oil and Hazardous
     Material Release  Prevention and Response Act and the Declaratory  Judgment
     Act for the  Government's  response costs at the two spill areas  discussed
     above.  The DOJ relied in part on the Texas state court judgment,  which in
     the DOJ's view, held that ST Services was the current owner of the pipeline
     and  the  successor-in-interest  of  the  prior  owner  and  operator.  The
     Government  advised ST  Services  that it believes  it has  incurred  costs
     exceeding  $40  million,  and expects to incur  future  costs  exceeding an
     additional  $22  million,  for  remediation  of the two  spill  areas.  The
     Partnership  believes that its subsidiaries have substantial  defenses.  ST
     Services  responded  to the  DOJ  on  September  6,  2001,  contesting  the
     Government's  positions and declining to reimburse any response costs.  The
     DOJ has not filed a lawsuit  against ST Services  seeking cost recovery for
     its environmental  investigation and response costs.  Representatives of ST
     Services  have  met  with  representatives  of the  Government  on  several
     occasions since September 6, 2001 to discuss the Government's claims and to
     exchange  information  related  to such  claims.  Additional  exchanges  of
     information are expected to occur in the future and additional meetings may
     be held to discuss possible  resolution of the Government's  claims without
     litigation.  The  Partnership  does not  believe  this  matter  will have a
     materially adverse effect on its financial condition, although there can be
     no assurances as to the ultimate outcome.

     On April 7, 2000, a fuel oil pipeline in Maryland owned by Potomac Electric
     Power  Company  ("PEPCO")  ruptured.  Work  performed  with  regard  to the
     pipeline  was  conducted by a  partnership  of which ST Services is general
     partner. PEPCO has reported that it has incurred total cleanup costs of $70
     million to $75 million.  PEPCO probably will continue to incur some cleanup
     related costs for the foreseeable future,  primarily in connection with EPA
     requirements  for monitoring  the condition of some of the impacted  areas.
     Since May 2000, ST Services has provisionally  contributed a minority share
     of the cleanup  expense,  which has been funded by ST  Services'  insurance
     carriers.  ST  Services  and  PEPCO  have  not,  however,  reached  a final
     agreement  regarding ST  Services'  proportionate  responsibility  for this
     cleanup  effort,  if any,  and cannot  predict  the  amount,  if any,  that
     ultimately  may be determined to be ST Services'  share of the  remediation
     expense,  but ST  Services  believes  that such  amount  will be covered by
     insurance  and  therefore   will  not  materially   adversely   affect  the
     Partnership's financial condition.

     As a result of the rupture,  purported  class  actions  were filed  against
     PEPCO and ST  Services  in federal  and state court in Maryland by property
     and business owners alleging  damages in unspecified  amounts under various
     theories, including under the Oil Pollution Act ("OPA") and Maryland common
     law.  The federal  court  consolidated  all of the federal  cases in a case
     styled as In re Swanson  Creek Oil Spill  Litigation.  A settlement  of the
     consolidated  class action,  and a companion  state-court class action, was
     reached and approved by the federal judge. The settlement involved creation
     and funding by PEPCO and ST Services of a $2,250,000 class settlement fund,
     from  which  all  participating  claimants  would  be paid  according  to a
     court-approved  formula, as well as a court-approved payment to plaintiffs'
     attorneys. The settlement has been consummated and the fund, to which PEPCO
     and  ST  Services   contributed   equal  amounts,   has  been  distributed.
     Participating  claimants'  claims  have been  settled  and  dismissed  with
     prejudice.  A number of class  members  elected not to  participate  in the
     settlement,  i.e., to "opt out," thereby  preserving  their claims  against
     PEPCO and ST  Services.  All  non-participant  claims have been settled for
     immaterial  amounts with ST Services' portion of such settlements  provided
     by its insurance carrier.

     PEPCO and ST Services  agreed with the federal  government and the State of
     Maryland to pay costs of assessing  natural  resource  damages arising from
     the  Swanson  Creek  oil  spill  under  OPA  and of  selecting  restoration
     projects.  This process was completed in mid-2002. ST Services' insurer has
     paid ST Services'  agreed 50 percent share of these  assessment  costs.  In
     late November  2002,  PEPCO and ST Services  entered into a Consent  Decree
     resolving  the federal  and state  trustees'  claims for  natural  resource
     damages.  The decree required  payments by ST Services and PEPCO of a total
     of  approximately  $3  million  to fund the  restoration  projects  and for
     remaining  damage  assessment  costs. The federal court entered the Consent
     Decree as a final judgment on December 31, 2002. PEPCO and ST Services have
     each  paid  their  50%  share  and  thus  fully   performed  their  payment
     obligations under the Consent Decree. ST Services' insurance carrier funded
     ST Services' payment.

     The U.S.  Department  of  Transportation  ("DOT")  has  issued a Notice  of
     Proposed  Violation  to PEPCO  and ST  Services  alleging  violations  over
     several years of pipeline safety  regulations and proposing a civil penalty
     of $647,000  jointly against the two companies.  ST Services and PEPCO have
     contested the DOT allegations and the proposed penalty.  A hearing was held
     before the Office of  Pipeline  Safety at the DOT in late 2001.  In June of
     2004, the DOT issued a final order reducing the penalty to $256,250 jointly
     against ST Services and PEPCO and $74,000 against ST Services. On September
     14, 2004, ST Services petitioned for reconsideration of the order which was
     subsequently denied.

     By letter  dated  January 4, 2002,  the Attorney  General's  Office for the
     State of Maryland  advised ST Services  that it intended to seek  penalties
     from ST Services in connection  with the April 7, 2000 spill.  The State of
     Maryland  subsequently  asserted  that it would seek  penalties  against ST
     Services and PEPCO  totaling up to $12 million.  A settlement of this claim
     was reached in mid-2002  under which ST Services'  insurer will pay a total
     of slightly more than $1 million in  installments  over a five year period.
     PEPCO  has also  reached a  settlement  of these  claims  with the State of
     Maryland.  Accordingly,  the Partnership believes that this matter will not
     have a material adverse effect on its financial condition.

     On  December  13,  2002,  ST  Services  sued PEPCO in the  Superior  Court,
     District of Columbia,  seeking,  among other things, a declaratory judgment
     as to ST Services' legal obligations,  if any, to reimburse PEPCO for costs
     of the oil spill.  On  December  16,  2002,  PEPCO sued ST  Services in the
     United States District Court for the District of Maryland, seeking recovery
     of all its costs for remediation of and response to the oil spill. Pursuant
     to an  agreement  between ST  Services  and PEPCO,  ST  Services'  suit was
     dismissed,  subject to refiling.  ST Services has moved to dismiss  PEPCO's
     suit. ST Services is vigorously  defending  against  PEPCO's  claims and is
     pursuing  its own  counterclaims  for  return  of monies  ST  Services  has
     advanced  to PEPCO for  settlements  and  cleanup  costs.  The  Partnership
     believes that any costs or damages  resulting  from these  lawsuits will be
     covered by insurance and therefore will not materially adversely affect the
     Partnership's  financial  condition.  The  amounts  claimed  by  PEPCO,  if
     recovered,  would trigger an excess  insurance  policy which has a $600,000
     retention,  but the Partnership  does not believe that such  retention,  if
     incurred,  would materially  adversely affect the  Partnership's  financial
     condition.

     In 2003,  Exxon Mobil filed a lawsuit in a New Jersey  state court  against
     GATX Corporation,  Kinder Morgan Liquid Terminals  ("Kinder  Morgan"),  the
     successor  in  interest  to GATX  Terminals  Corporation  ("GATX"),  and ST
     Services,  seeking  reimbursement for remediation costs associated with the
     Paulsboro,  New Jersey  terminal.  The  terminal  was owned and operated by
     Exxon Mobil from the early  1950's until 1990 when  purchased  by GATX.  ST
     Services  purchased the terminal in 2000 from GATX.  GATX was  subsequently
     acquired  by Kinder  Morgan.  As a  condition  to the sale to GATX in 1990,
     Exxon Mobil undertook certain  remediation  obligations with respect to the
     site. In the lawsuit, Exxon Mobil is claiming that it has complied with its
     remediation  and contractual  obligations and is entitled to  reimbursement
     from GATX Corporation,  the parent company of GATX,  Kinder Morgan,  and ST
     Services for costs in the amount of $400,000  that it claims are related to
     releases at the site  subsequent to its sale of the terminal to GATX. It is
     also  alleging  that  any  remaining   remediation   requirements  are  the
     responsibility of GATX Corporation,  Kinder Morgan, or ST Services.  Kinder
     Morgan has  alleged  that it was  relieved of any  remediation  obligations
     pursuant  to the sale  agreement  between  its  predecessor,  GATX,  and ST
     Services.  ST Services  believes  that,  except for  remediation  involving
     immaterial amounts, GATX Corporation or Exxon Mobil are responsible for the
     remaining  remediation  of the  site.  Costs  of  completing  the  required
     remediation  depend on a number of factors and cannot be  determined at the
     current time.

     A subsidiary  of the  Partnership  purchased the  approximately  2,000-mile
     ammonia  pipeline  system  from  Koch  Pipeline  Company,   L.P.  and  Koch
     Fertilizer  Storage and Terminal  Company in 2002. The rates of the ammonia
     pipeline are subject to regulation by the Surface Transportation Board (the
     "STB").  The STB had  issued  an order  in May  2000,  prescribing  maximum
     allowable   rates  the   Partnership's   predecessor   could   charge   for
     transportation  to certain  destination  points on the pipeline system.  In
     2003, the Partnership  instituted a 7% general  increase to pipeline rates.
     On August 1, 2003, CF Industries,  Inc.  ("CFI") filed a complaint with the
     STB challenging  these rate increases.  On August 11, 2004, STB ordered the
     Partnership  to pay  reparations  to CFI and to return  CFI's  rates to the
     levels permitted under the rate prescription.  The Partnership has complied
     with the order. The STB, however, indicated in the order that it would lift
     the rate  prescription in the event the Partnership  could show "materially
     changed   circumstances."   The  Partnership  has  submitted   evidence  of
     "materially changed circumstances," which specifically includes its capital
     investment  in  the  pipeline.   CFI  has  argued  that  the  Partnership's
     acquisition  costs should not be  considered by the STB as a measure of the
     Partnership's  investment  base.  The STB is  expected  to decide the issue
     within the second quarter of 2005.

     Also, on June 16, 2003, Dyno Nobel Inc. ("Dyno") filed a complaint with the
     STB  challenging  the 2003 rate  increase  on the  basis  that (i) the rate
     increase  constitutes  a  violation  of a  contract  rate,  (ii)  rates are
     discriminatory  and (iii)  the rates  exceed  permitted  levels.  Dyno also
     intervened in the CFI proceeding  described above. Unlike CFI, Dyno's rates
     are not subject to a rate prescription. As of March 31, 2005, Dyno would be
     entitled  to  approximately  $2.7  million  in rate  refunds,  should it be
     successful.  The  Partnership  believes,  however,  that Dyno's  claims are
     without merit.

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


6.   BUSINESS SEGMENT DATA

     The Partnership conducts business through three principal  operations:  the
     "Pipeline  Operations,"  which consists  primarily of the transportation of
     refined  petroleum  products and fertilizer in the  Midwestern  states as a
     common carrier;  the "Terminaling  Operations,"  which provides storage for
     petroleum products, specialty chemicals and other liquids; and the "Product
     Sales  Operations,"  which delivers  bunker fuels to ships in the Caribbean
     and Nova  Scotia,  Canada,  and sells bulk  petroleum  products  to various
     commercial interests.

     The Partnership  measures segment profit as operating income.  Total assets
     are those controlled by each reportable  segment.  Business segment data is
     as follows:

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                ----------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
     Business segment revenues:
        Pipeline operations                                                     $      30,092      $       27,903
        Terminaling operations                                                         69,130              62,795
        Product sales operations                                                       83,796              55,715
                                                                                -------------      --------------
                                                                                $     183,018      $      146,413
                                                                                =============      ==============
     Business segment profit:
        Pipeline operations                                                     $      11,737      $       11,210
        Terminaling operations                                                         18,727              18,484
        Product sales operations                                                        3,968               2,868
                                                                                -------------      --------------
            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
                                                                                =============      ==============

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                                                  March 31,         December 31,
                                                                                    2005                2004
                                                                              ----------------   ------------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
     Total assets:
        Pipeline operations                                                     $     353,781      $     351,195
        Terminaling operations                                                        895,500            917,966
        Product sales                                                                  60,540             56,155
                                                                                -------------      -------------
                                                                                $   1,309,821      $   1,325,316
                                                                                =============      =============
</TABLE>


7.   RECENT ACCOUNTING PRONOUNCEMENT

     In March of 2005,  the Financial  Accounting  Standards  Board (the "FASB")
     issued FASB  Interpretation No. 47, "Accounting for Conditional  Retirement
     Obligations"  ("FIN 47"), which requires companies to recognize a liability
     for the  fair  value  of a legal  obligation  to  perform  asset-retirement
     activities  that are  conditional  on a future event,  if the amount can be
     reasonably estimated.  FIN 47 must be adopted by the Partnership by the end
     of fiscal 2005.  The impact of adoption on the  Partnership's  consolidated
     financial statements is still being evaluated.




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


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

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

     Overview

     In September 1989, Kaneb Pipe Line Company LLC ("KPL"),  now a wholly owned
     subsidiary of Kaneb Services LLC ("KSL"), formed the Partnership to own and
     operate its refined petroleum products pipeline  business.  KPL manages and
     controls the  operations  of the  Partnership  through its general  partner
     interest  and an 18% (at March 31,  2005)  limited  partner  interest.  The
     Partnership  operates through Kaneb Pipe Line Operating  Partnership,  L.P.
     ("KPOP"),  a  limited  partnership  in which  the  Partnership  holds a 99%
     interest as limited  partner.  KPL owns a 1% interest as general partner of
     the Partnership and a 1% interest as general partner of KPOP.

     On October  31,  2004,  Valero  L.P.  and the  Partnership  entered  into a
     definitive  agreement  to merge  (the "KPP  Merger")  Valero  L.P.  and the
     Partnership.  Under the  terms of the  agreement,  each  holder of units of
     limited  partnership  interests in the Partnership will receive a number of
     Valero L.P. common units based on an exchange ratio that fluctuates  within
     a fixed range to provide $61.50 in value of Valero L.P. units for each unit
     of the  Partnership.  The actual  exchange  ratio will be determined at the
     time of the closing of the proposed  merger and is subject to a fixed value
     collar of plus or minus  five  percent  of Valero  L.P.'s per unit price of
     $57.25 as of  October  7, 2004.  Should  Valero  L.P.'s per unit price fall
     below  $54.39 per unit,  the  exchange  ratio will  remain  fixed at 1.1307
     Valero L.P. units for each unit of the Partnership. Likewise, should Valero
     L.P.'s  per unit  price  exceed  $60.11  per unit of the  Partnership,  the
     exchange  ratio will remain fixed at 1.0231 Valero L.P. units for each unit
     of the Partnership.

     In a separate definitive agreement, on October 31, 2004, Valero L.P. agreed
     to acquire  by merger  (the "KSL  Merger")  all of the  outstanding  common
     shares of KSL for cash.  Under the terms of that agreement,  Valero L.P. is
     offering to  purchase  all of the  outstanding  shares of KSL at $43.31 per
     share.

     The  completion  of the KPP Merger is subject to the  customary  regulatory
     approvals   including   those   under   the   Hart-Scott-Rodino   Antitrust
     Improvements  Act.  The  completion  of the KPP  Merger is also  subject to
     completion  of the KSL Merger.  All  required  unitholder  and  shareholder
     approvals have been obtained.  Upon completion of the mergers,  the general
     partner of the combined  partnership  will be owned by affiliates of Valero
     Energy  Corporation  and the  Partnership  and KSL will become wholly owned
     subsidiaries of Valero L.P.

     The Partnership's  petroleum  pipeline  business consists  primarily of the
     transportation,  as a common  carrier,  of refined  petroleum  products  in
     Kansas, Nebraska,  Iowa, South Dakota, North Dakota, Colorado,  Wyoming and
     Minnesota.  Common carrier activities are those under which  transportation
     through the pipelines is available at published  tariffs filed, in the case
     of interstate shipments, with the Federal Energy Regulatory Commission (the
     "FERC"), or, in the case of intrastate  shipments,  with the relevant state
     authority,  to any shipper of refined petroleum  products who requests such
     services   and   satisfies   the   conditions   and    specifications   for
     transportation.  The  petroleum  pipelines  primarily  transport  gasoline,
     diesel  oil,  fuel  oil and  propane.  Substantially  all of the  petroleum
     pipeline  operations  constitute common carrier operations that are subject
     to  federal  or state  tariff  regulations.  The  Partnership  also owns an
     approximately  2,000-mile  anhydrous  ammonia pipeline system acquired from
     Koch Pipeline  Company,  L.P. in November of 2002. The fertilizer  pipeline
     originates  in southern  Louisiana,  proceeds  north  through  Arkansas and
     Missouri,  and then  branches  east into Illinois and Indiana and north and
     west into Iowa and Nebraska. The Partnership's  petroleum pipeline business
     depends  on the level of  demand  for  refined  petroleum  products  in the
     markets  served  by the  pipelines  and  the  ability  and  willingness  of
     refineries  and  marketers  having  access to the  pipelines to supply such
     demand by deliveries  through the  pipelines.  The  Partnership's  pipeline
     revenues  are based on volumes  shipped  and the  distance  over which such
     volumes are transported.

     The Partnership's  terminaling  business is one of the largest  independent
     petroleum  products  and  specialty  liquids  terminaling  companies in the
     United States.  In the United States, ST Services operates 41 facilities in
     20 states.  ST Services also owns and operates seven  terminals  located in
     the United  Kingdom and eight  terminals in Australia  and New Zealand.  ST
     Services  and  its  predecessors  have a long  history  in the  terminaling
     business and handle a wide variety of liquids,  from petroleum  products to
     specialty  chemicals to edible  liquids.  Statia,  acquired in 2002, owns a
     terminal  on the  Island  of St.  Eustatius,  Netherlands  Antilles,  and a
     terminal at Point Tupper, Nova Scotia, Canada.  Independent terminal owners
     generally  compete  on the basis of the  location  and  versatility  of the
     terminals,  service and price.  Terminal  versatility  is a function of the
     operator's  ability to offer  handling  for diverse  products  with complex
     handling  requirements.  The  service  function  typically  provided by the
     terminal includes the safe storage of product at specified temperatures and
     other  conditions,  as well as receipt and delivery from the terminal.  The
     ability to obtain  attractive  pricing is dependent largely on the quality,
     versatility and reputation of the facility. Terminaling revenues are earned
     based on fees for the storage and handling of products.

     The Partnership's  product sales business delivers bunker fuels to ships in
     the Caribbean and Nova Scotia, Canada, and sells bulk petroleum products to
     various commercial customers at those locations. In the bunkering business,
     the  Partnership  competes with ports offering bunker fuels along the route
     of the vessel.  Vessel owners or charterers are charged  berthing and other
     fees  for  associated  services  such as  pilotage,  tug  assistance,  line
     handling, launch service and emergency response services.


     Consolidated Results of Operations

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                      (in thousands, except
                                                                                         per unit amounts)
<S>                                                                             <C>                <C>
     Revenues                                                                   $     183,018      $     146,413
                                                                                =============      =============
     Operating Income                                                           $      34,432      $      32,562
                                                                                =============      =============
     Net income                                                                 $      21,797      $      20,769
                                                                                =============      =============
     Allocation of net income per unit                                          $        0.68      $        0.65
                                                                                =============      =============
     Cash distributions declared per unit                                       $       0.855      $        0.84
                                                                                =============      =============
     Capital expenditures, excluding acquisitions                               $       8,743      $       7,347
                                                                                =============      =============

</TABLE>

     For the three  months  ended March 31,  2005,  revenues  increased by $36.6
     million, or 25%, when compared to the first quarter of 2004, due to a $28.1
     million  increase in product sales revenues (see "Product Sales" below),  a
     $6.3 million increase in terminaling  business  revenues (see  "Terminaling
     Operations"  below),  and a $2.2 million increase in pipeline revenues (see
     "Pipeline  Operations" below).  Operating income for the three months ended
     March 31, 2005 increased by $1.9 million,  or 6%, when compared to the same
     period in 2004, due to a $1.1 million  increase in product sales  operating
     income, a $0.5 million increase in pipeline  operating  income,  and a $0.3
     million increase in terminaling operating income.  Operating income for the
     three months ended March 31, 2005 includes $2.1 million of costs associated
     with the Valero L.P. merger  agreement.  Overall,  net income for the three
     months ended March 31, 2005 increased by $1.0 million, or 5%, when compared
     to the three months ended March 31, 2004.



<PAGE>
     Pipeline Operations
<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
     Revenues                                                                   $      30,092      $       27,903
     Operating costs                                                                   11,499              11,487
     Depreciation and amortization                                                      3,792               3,599
     General and administrative                                                         3,064               1,607
                                                                                -------------      --------------
        Operating income                                                        $      11,737      $       11,210
                                                                                =============      ==============
</TABLE>

     The  Partnership's  pipeline  revenues are based on volumes shipped and the
     distances over which such volumes are transported. Because tariff rates are
     regulated by the FERC or the STB, the  pipelines  compete  primarily on the
     basis of quality of service,  including  delivery of products at convenient
     locations on a timely basis to meet the needs of their  customers.  For the
     three  month  period  ended  March 31,  2005,  revenues  increased  by $2.2
     million,  or 8%,  when  compared  to the  first  quarter  of  2004,  due to
     increases  in barrel  miles of  petroleum  products  shipped  on  petroleum
     pipelines  and  increases  in the average  price  received  per barrel mile
     shipped.  Barrel miles on petroleum  pipelines  totaled 5.2 billion and 5.1
     billion for the three months  ended March 31, 2005 and 2004,  respectively.
     Total volumes  shipped on the anhydrous  ammonia  pipeline  aggregated  297
     thousand  tons for each of the three month periods ended March 31, 2005 and
     2004.

     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, was flat for the three month period
     ended March 31, 2005,  when compared to the first quarter of 2004.  For the
     three months ended March 31, 2005,  depreciation and amortization increased
     by $0.2 million,  when  compared to the same 2004 period,  due primarily to
     routine maintenance capital expenditures. General and administrative costs,
     which include  managerial,  accounting and administrative  personnel costs,
     office  rent  and  expense,   legal  and   professional   costs  and  other
     non-operating  costs,  increased by $1.5 million for the three month period
     ended  March 31,  2005,  when  compared to the first  quarter of 2004,  due
     primarily to costs  associated  with the Valero L.P.  merger  agreement and
     increases in personnel-related costs.

     Terminaling Operations

<TABLE>
<CAPTION>
                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
     Revenues                                                                   $      69,130      $       62,795
     Operating costs                                                                   33,360              30,343
     Depreciation and amortization                                                     10,824              10,084
     General and administrative                                                         6,219               3,884
                                                                                -------------      --------------
        Operating income                                                        $      18,727      $       18,484
                                                                                =============      ==============
</TABLE>

     For the three month  period  ended  March 31,  2005,  terminaling  revenues
     increased by $6.3 million,  or 10%, when compared to the three month period
     ended March 31, 2004, due to increases in both the average tankage utilized
     and the average  price  realized  per barrel of tankage  utilized.  Average
     tankage  utilized  for the three month period ended March 31, 2005 was 50.5
     million  barrels,  compared to 48.2 million barrels for the same prior year
     period. For the three month period ended March 31, 2005, average annualized
     revenues  per barrel of tankage  utilized  increased  to $5.55 per  barrel,
     compared  to $5.24  per  barrel  for the same  prior  year  period,  due to
     favorable domestic and foreign market conditions.

     For the three month period ended March 31, 2005,  operating costs increased
     by $3.0 million, when compared to the same 2004 period, a result of overall
     increases in tank utilization and planned maintenance. For the three months
     ended March 31,  2005,  depreciation  and  amortization  increased  by $0.7
     million,  when  compared  to the first  quarter  of 2004,  due to  terminal
     acquisitions in 2004 and routine maintenance capital expenditures.  General
     and  administrative  costs  increased  by $2.3 million for the three months
     ended  March 31,  2005,  when  compared to the first  quarter of 2004,  due
     primarily to costs  associated  with the Valero L.P.  merger  agreement and
     increases in personnel-related costs.


     Product Sales

<TABLE>
<CAPTION>

                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                ---------------------------------
                                                                                    2005                2004
                                                                                -------------      --------------
                                                                                         (in thousands)
<S>                                                                             <C>                <C>
     Revenues                                                                   $      83,796      $       55,715
     Cost of products sold                                                             77,085              51,039
                                                                                -------------      --------------
     Gross margin                                                               $       6,711      $        4,676
                                                                                =============      ==============
     Operating income                                                           $       3,968      $        2,868
                                                                                =============      ==============
</TABLE>

     The  product  sales  business,  which  was  acquired  with  Statia in 2002,
     delivers bunker fuels to ships in the Caribbean and Nova Scotia, Canada and
     sells bulk  petroleum  products to various  commercial  interests.  For the
     three months  ended March 31, 2005,  product  sales  revenues  increased by
     $28.1  million,  or 50%,  when compared to the three months ended March 31,
     2004, due to a general  increase in prices,  as well as an overall increase
     in volumes sold.  Approximately  $15.1 million of the first quarter of 2005
     revenue  increase was due to volume  increases and $13.0 million was due to
     price  increases,  when compared to the first quarter of 2004. Gross margin
     for the three months ended March 31, 2005  increased by $2.0 million,  when
     compared to the first quarter of 2004, due to the increase in volumes sold.
     Operating  income for the three  months  ended March 31, 2005  increased by
     $1.1 million,  when  compared to the first  quarter of 2004,  due to higher
     sales volumes and favorable product margins.

     Interest Expense

     For the three months ended March 31, 2005,  interest  expense  increased by
     $0.7  million,  when  compared  to the same  2004  period,  due to  overall
     increases in debt levels  resulting from terminal  acquisitions in 2004 and
     increases in interest rates on variable rate debt.

     Income Taxes

     Partnership  operations  are not subject to federal or state income  taxes.
     However,   certain   operations  are  conducted  through  separate  taxable
     wholly-owned  U.S.  and  foreign  corporate  subsidiaries.  The  income tax
     expense for these  subsidiaries  was $1.5  million and $1.2 million for the
     three month periods ended March 31, 2005 and 2004, respectively.

     On June 1,  1989,  the  governments  of the  Netherlands  Antilles  and St.
     Eustatius  approved  a Free Zone and Profit Tax  Agreement  retroactive  to
     January 1, 1989,  which  expired  on  December  31,  2000.  This  agreement
     required a subsidiary of the Partnership, which was acquired with Statia in
     2002, to pay a 2% rate on taxable income, as defined therein,  or a minimum
     payment of 500,000  Netherlands  Antilles guilders ($0.3 million) per year.
     The agreement  further  provided that any amounts paid in order to meet the
     minimum  annual  payment were  available to offset  future tax  liabilities
     under the  agreement  to the  extent  that the  minimum  annual  payment is
     greater than 2% of taxable income.  The subsidiary is currently  engaged in
     discussions with  representatives  appointed by the Island Territory of St.
     Eustatius  regarding the renewal or modification of the agreement,  but the
     ultimate  outcome  cannot be predicted  at this time.  The  subsidiary  has
     accrued amounts assuming a new agreement becomes  effective,  and continues
     to make payments, as required, under the previous agreement.

     Liquidity and Capital Resources

     Cash  provided by  operations  was $41.3  million and $32.5 million for the
     three months ended March 31, 2005 and 2004, respectively. The first quarter
     2005  increase  was due  primarily  to overall  increases  in revenues  and
     operating income and changes in working capital  components  resulting from
     the timing of cash receipts and  disbursements,  when compared to the first
     quarter of 2004.

     Capital expenditures were $8.7 million for the three months ended March 31,
     2005,   compared  to  $7.3  million  during  the  same  2004  period.  Such
     expenditures  included  $7.3  million and $5.7 million in  maintenance  and
     environmental  expenditures  and $1.4 million and $1.6 million in expansion
     expenditures  for the three  month  periods  ended March 31, 2005 and 2004,
     respectively. The increase in first quarter 2005 capital expenditures, when
     compared to the same 2004 period,  was primarily the result of increases in
     planned  maintenance  capital   expenditures  related  to  the  terminaling
     business.  During  all  periods,  adequate  pipeline  capacity  existed  to
     accommodate volume growth, and the expenditures  required for environmental
     and safety  improvements were not, and are not expected to be, significant.
     The Partnership  anticipates that capital  expenditures  (including routine
     maintenance and expansion  expenditures,  but excluding  acquisitions) will
     total  approximately $40 to $44 million in 2005. Such future  expenditures,
     however,  will depend on many  factors  beyond the  Partnership's  control,
     including,  without  limitation,  demand for refined petroleum products and
     terminaling  services in the Partnership's  market areas,  local, state and
     federal  government   regulations,   fuel  conservation   efforts  and  the
     availability  of financing on acceptable  terms.  No assurance can be given
     that required  capital  expenditures  will not exceed  anticipated  amounts
     during  the year,  or  thereafter,  or that the  Partnership  will have the
     ability to finance such expenditures through borrowings,  or will choose to
     do so.

     The  Partnership  makes  quarterly  distributions  of 100% of its available
     cash,  as  defined  in its  partnership  agreement,  to  holders of limited
     Partnership  units  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 $0.855 per unit with respect
     to the  fourth  quarter  of 2004  was paid on  February  14,  2005.  A cash
     distribution  of $0.855 per unit with respect to the first  quarter of 2005
     was  declared to holders of record on April 30,  2005,  and will be paid on
     May 13, 2005.

     The Partnership  expects to fund future cash  distributions and maintenance
     capital  expenditures  with existing cash and  anticipated  cash flows from
     operations.  Expansionary  capital  expenditures  are expected to be funded
     through additional  Partnership bank borrowings and/or future public equity
     or debt offerings.

     The Partnership has a credit  agreement with a group of banks that provides
     for a $400 million  unsecured  revolving  credit facility  through April of
     2006. The credit facility, which provides for an increase in the commitment
     up to an  aggregate  of  $450  million  by  mutual  agreement  between  the
     Partnership  and the banks,  bears  interest  at  variable  rates and has a
     variable  commitment fee on unused amounts.  The credit  facility  contains
     certain  financial  and  operating  covenants,   including  limitations  on
     investments,  sales of assets and transactions  with affiliates and, absent
     an event of default,  does not restrict  distributions  to unitholders.  At
     March 31, 2005, the Partnership  was in compliance  with all covenants.  At
     March 31, 2005, $95.7 million was outstanding under the credit agreement.

     In May of 2003,  the  Partnership  issued  $250  million  of 5.875%  senior
     unsecured  notes due June 1, 2013.  Under the note  indenture,  interest is
     payable semi-annually in arrears on June 1 and December 1 of each year. The
     notes  are  redeemable,  as a  whole  or in  part,  at  the  option  of the
     Partnership,  at any time,  at a  redemption  price equal to the greater of
     100% of the principal  amount of the notes, or the sum of the present value
     of the remaining  scheduled payments of principal and interest,  discounted
     to the redemption date at the applicable U.S.  Treasury rate, as defined in
     the indenture,  plus 30 basis points.  The note indenture  contains certain
     financial and  operational  covenants,  including  certain  limitations  on
     investments,  sales of assets and transactions  with affiliates and, absent
     an event of  default,  such  covenants  do not  restrict  distributions  to
     unitholders.  At March 31, 2005, the Partnership was in compliance with all
     covenants.

     In February of 2002,  the  Partnership  issued $250 million of 7.75% senior
     unsecured notes due February 15, 2012.  Under the note indenture,  interest
     is payable  semi-annually  in arrears on  February 15 and August 15 of each
     year. The notes are redeemable, as a whole or in part, at the option of the
     Partnership,  at any time,  at a  redemption  price equal to the greater of
     100% of the principal  amount of the notes, or the sum of the present value
     of the remaining  scheduled payments of principal and interest,  discounted
     to the redemption date at the applicable U.S.  Treasury rate, as defined in
     the indenture,  plus 30 basis points.  The note indenture  contains certain
     financial and  operational  covenants,  including  certain  limitations  on
     investments,  sales of assets and transactions  with affiliates and, absent
     an event of  default,  such  covenants  do not  restrict  distributions  to
     unitholders.  At March 31, 2005, the Partnership was in compliance with all
     covenants.

     The following is a schedule by period of the  Partnership's  debt repayment
     obligations and material contractual commitments as of March 31, 2005:

<TABLE>
<CAPTION>
                                                         Less than                                        After
                                            Total         1 year        1 -3 years    4 -5 years         5 years
                                          ----------   ------------     -----------  ------------    ---------------
                                                                    (in thousands)
<S>                                       <C>          <C>              <C>          <C>             <C>
     Debt:
       Revolving credit facility          $   95,669   $      -         $    95,669  $      -        $      -
       7.75% senior unsecured
          notes                              250,000          -              -              -               250,000
       5.875% senior unsecured
          notes                              250,000          -              -              -               250,000
       Other bank debt                        75,347          -              75,347         -               -
                                          ----------   ------------     -----------  ------------    --------------
          Debt subtotal                      671,016          -             171,016         -               500,000
                                          ----------   ------------     -----------  ------------    --------------
     Contractual commitments -
       Operating leases                       66,574         11,416          17,050        13,795            24,313
                                          ----------   ------------     -----------  ------------    --------------
          Total                           $  737,590   $     11,416     $   188,066  $     13,795    $      524,313
                                          ==========   ============     ===========  ============    ==============

</TABLE>

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

     Off-Balance Sheet Transactions

     The Partnership was not a party to any  off-balance  sheet  transactions at
     March 31,  2005,  or for the three month  periods  ended March 31, 2005 and
     2004.

     Critical Accounting Policies and Estimates

     The  preparation of the  Partnership's  financial  statements in conformity
     with  accounting  principles  generally  accepted  in the United  States of
     America  requires  management to make estimates and assumptions that affect
     the  reported   amounts  of  assets  and  liabilities  and  disclosures  of
     contingent  assets and liabilities at the date of the financial  statements
     and the  reported  amounts of revenues and  expenses  during the  reporting
     period.  Actual  results  could  differ from those  estimates.  Significant
     accounting policies are included in the Notes to the Consolidated Financial
     Statements  of the  Partnership's  Annual  Report on Form 10-K for the year
     ended December 31, 2004.

     Critical  accounting  policies  are those  that are most  important  to the
     portrayal  of  the   Partnership's   financial   position  and  results  of
     operations. These policies require management's most difficult,  subjective
     or complex judgments, often employing the use of estimates about the effect
     of matters that are inherently  uncertain.  The Partnership's most critical
     accounting  policies  pertain to  impairment  of property and equipment and
     environmental costs.

     The carrying  value of property and  equipment  is  periodically  evaluated
     using management's estimates of undiscounted future cash flows, or, in some
     cases,  third-party appraisals,  as the basis for determining if impairment
     exists under the provisions of Statement of Financial  Accounting Standards
     ("SFAS") No. 144,  "Accounting for the Impairment or Disposal of Long-Lived
     Assets". To the extent that impairment is indicated to exist, an impairment
     loss is recognized  under SFAS No. 144 based on fair value. The application
     of SFAS No. 144 did not have a material impact on the results of operations
     of the  Partnership  for the three month  periods  ended March 31, 2005 and
     2004.  However,  future evaluations of carrying value are dependent on many
     factors,  several of which are out of the Partnership's control,  including
     demand for  refined  petroleum  products  and  terminaling  services in the
     Partnership's  market  areas,  and local,  state and  federal  governmental
     regulations.  To the extent that such factors or conditions  change,  it is
     possible that future  impairments might occur,  which could have a material
     effect on the results of operations of the Partnership.

     Environmental  expenditures that relate to current  operations are expensed
     or  capitalized,  as appropriate.  Expenditures  that relate to an existing
     condition caused by past operations, and which do not contribute to current
     or future revenue generation,  are expensed.  Liabilities are recorded when
     environmental  assessments  and/or remedial  efforts are probable,  and the
     costs can be reasonably estimated.  Generally, the timing of these accruals
     coincides with the completion of a feasibility  study or the  Partnership's
     commitment to a formal plan of action. The application of the Partnership's
     environmental  accounting  policies  did not have a material  impact on the
     results of operations of the  Partnership for the three month periods ended
     March  31,  2005 and  2004.  Although  the  Partnership  believes  that its
     operations  are  in  general   compliance  with  applicable   environmental
     regulations,  risks of substantial  costs and  liabilities  are inherent in
     pipeline and terminaling  operations.  Moreover,  it is possible that other
     developments,  such as increasingly strict environmental laws,  regulations
     and  enforcement  policies  thereunder,  and legal  claims  for  damages to
     property or persons resulting from the operations of the Partnership, could
     result in  substantial  costs and  liabilities,  any of which  could have a
     material effect on the results of operations of the Partnership.

     Recent Accounting Pronouncement

     In March of 2005,  the Financial  Accounting  Standards  Board (the "FASB")
     issued FASB  Interpretation No. 47, "Accounting for Conditional  Retirement
     Obligations"  ("FIN 47"), which requires companies to recognize a liability
     for the  fair  value  of a legal  obligation  to  perform  asset-retirement
     activities  that are  conditional  on a future event,  if the amount can be
     reasonably estimated.  FIN 47 must be adopted by the Partnership by the end
     of fiscal 2005.  The impact of adoption on the  Partnership's  consolidated
     financial statements is still being evaluated.




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


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


Item 3. Quantitative and Qualitative Disclosure About Market Risk

     The principal  market risks  pursuant to this Item (i.e.,  the risk of loss
arising  from  adverse  changes  in  market  rates  and  prices)  to  which  the
Partnership  is  exposed  are  interest  rates  on the  Partnership's  debt  and
investment   portfolios  and   fluctuations  of  petroleum   product  prices  on
inventories held for resale.

     The  Partnership's  investment  portfolio  consists  of  cash  equivalents;
accordingly,  the carrying amounts  approximate  fair value.  The  Partnership's
investments are not material to its financial position or performance.  Assuming
variable rate debt of $130.8  million at March 31, 2005, a one percent  increase
in interest rates would increase  annual net interest  expense by  approximately
$1.3 million.

     The  product  sales  business  periodically   purchases  refined  petroleum
products for resale as bunker fuel and sales to commercial interests.  Petroleum
inventories are generally held for short periods of time, not exceeding 90 days.
As the Partnership does not engage in derivative transactions to hedge the value
of the  inventory,  it is  subject  to market  risk from  changes  in global oil
markets.


Item 4. Controls and Procedures

     Kaneb Pipe Line Company  LLC's  principal  executive  officer and principal
financial officer, after evaluating,  as of March 31, 2005, the effectiveness of
the  Partnership's  disclosure  controls  and  procedures  (as  defined in Rules
13a-15(e) and 15d-15(e) of the Securities  Exchange Act of 1934), have concluded
that, as of such date, the Partnership's  disclosure controls and procedures are
adequate  and  effective  to ensure that  material  information  relating to the
Partnership  and its  consolidated  subsidiaries  would be made known to them by
others within those entities.

     During  the  first  quarter  of 2005,  there  have been no  changes  in the
Partnership's  internal  controls over financial  reporting that have materially
affected, or are reasonably likely to materially affect, those internal controls
over financial reporting subsequent to the date of the evaluation.  As a result,
no corrective actions were required or undertaken.




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


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

                           Part II - Other Information


Item 6. Exhibits

     (a)  Exhibits.

          3.1  Amended  and  Restated  Agreement  of Limited  Partnership  dated
               September  27, 1989,  as revised July 23, 1998,  filed as Exhibit
               3.1 to  Registrant's  Form 10-K for the year ended  December  31,
               2000, which exhibit is hereby incorporated by reference.

          3.2  Amendment   to  Amended  and   Restated   Agreement   of  Limited
               Partnership  dated  October  27,  2003,  filed as Exhibit  3.2 to
               Registrant's  Form 10-K for the year  ended  December  31,  2003,
               which exhibit is hereby incorporated by reference.

          31.1 Certification of Chief Executive Officer, Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated May 10, 2005.

          31.2 Certification of Chief Financial Officer, Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated May 10, 2005.

          32.1 Certification  of Chief  Executive  Officer,  Pursuant to Section
               906(a) of the Sarbanes-Oxley Act of 2002, dated May 10, 2005.

          32.2 Certification  of Chief  Financial  Officer,  Pursuant to Section
               906(a) of the Sarbanes-Oxley Act of 2002, dated May 10, 2005.

                                    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, thereunto duly authorized.

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


Date:   May 10, 2005                    //s//         HOWARD C. WADSWORTH
                                      ------------------------------------------
                                      Howard C. Wadsworth
                                      Vice President, Treasurer and Secretary
                                      (Principal Financial Officer and
                                      Duly Authorized Officer)


<PAGE>

                                                                    Exhibit 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Edward D. Doherty, Chief Executive Officer of Kaneb Pipe Line Company LLC, as
General Partner for Kaneb Pipe Line Partners, L.P., certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of Kaneb  Pipe Line
     Partners, L.P.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period  covered by this quarterly  report,  based on
          such evaluation; and

     d)   disclosed  in this  quarterly  report any  change in the  registrant's
          internal  control over financial  reporting  that occurred  during the
          registrant's most recent fiscal quarter that has materially  affected,
          or  is  reasonably  likely  to  materially  affect,  the  registrant's
          internal control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: May 10, 2005




                                                //s//  EDWARD D. DOHERTY
                                             -----------------------------------
                                             Edward D. Doherty
                                             Chief Executive Officer


<PAGE>
                                                                    Exhibit 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
            PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Howard C. Wadsworth,  Chief Financial Officer of Kaneb Pipe Line Company LLC,
as General Partner for Kaneb Pipe Line Partners, L.P., certify that:

1.   I have  reviewed  this  quarterly  report on Form  10-Q of Kaneb  Pipe Line
     Partners, L.P.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this quarterly report is being prepared;

     b)   designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     c)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this quarterly  report our conclusions
          about the effectiveness of the disclosure controls and procedures,  as
          of the end of the period  covered by this quarterly  report,  based on
          such evaluation; and

     d)   disclosed  in this  quarterly  report any  change in the  registrant's
          internal  control over financial  reporting  that occurred  during the
          registrant's most recent fiscal quarter that has materially  affected,
          or  is  reasonably  likely  to  materially  affect,  the  registrant's
          internal control over financial reporting; and

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.



Date: May 10, 2005




                                               //s//  HOWARD C. WADSWORTH
                                             -----------------------------------
                                             Howard C. Wadsworth
                                             Chief Financial Officer






<PAGE>
                                                                    Exhibit 32.1


                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
          PURSUANT TO SECTION 906(A) OF THE SARBANES-OXLEY ACT OF 2002

The  undersigned,  being the Chief Executive  Officer of Kaneb Pipe Line Company
LLC, as General Partner of Kaneb Pipe Line Partners,  L.P. (the  "Partnership"),
hereby certifies that, to his knowledge,  the Partnership's  Quarterly Report on
Form 10-Q for the three  months  ended  March 31,  2005,  filed  with the United
States Securities and Exchange  Commission pursuant to Section 13(a) or 15(d) of
the Securities  Exchange Act of 1934 (15 U.S.C.  78m or 78o(d)),  fully complies
with the  requirements of Section 13(a) or 15(d) of the Securities  Exchange Act
of 1934 and that information contained in such Quarterly Report fairly presents,
in all material respects,  the financial  condition and results of operations of
the Partnership.

This  written  statement  is being  furnished  to the  Securities  and  Exchange
Commission  as an exhibit to such Form 10-Q.  A signed  original of this written
statement required by Section 906 has been provided to Kaneb Pipe Line Partners,
L.P. and will be retained by Kaneb Pipe Line Partners, L.P. and furnished to the
Securities and Exchange Commission or its staff upon request.

Date:    May 10, 2005

                                         //s//  EDWARD D. DOHERTY
                                      ------------------------------------------
                                      Edward D. Doherty
                                      Chief Executive Officer




<PAGE>
                                                                    Exhibit 32.2



                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
          PURSUANT TO SECTION 906(A) OF THE SARBANES-OXLEY ACT OF 2002


The  undersigned,  being the Chief Financial  Officer of Kaneb Pipe Line Company
LLC, as General Partner of Kaneb Pipe Line Partners,  L.P. (the  "Partnership"),
hereby certifies that, to his knowledge,  the Partnership's  Quarterly Report on
Form 10-Q for the three  months  ended  March 31,  2005,  filed  with the United
States Securities and Exchange  Commission pursuant to Section 13(a) or 15(d) of
the Securities  Exchange Act of 1934 (15 U.S.C.  78m or 78o(d)),  fully complies
with the  requirements of Section 13(a) or 15(d) of the Securities  Exchange Act
of 1934 and that information contained in such Quarterly Report fairly presents,
in all material respects,  the financial  condition and results of operations of
the Partnership.

This  written  statement  is being  furnished  to the  Securities  and  Exchange
Commission  as an exhibit to such Form 10-Q.  A signed  original of this written
statement required by Section 906 has been provided to Kaneb Pipe Line Partners,
L.P. and will be retained by Kaneb Pipe Line Partners, L.P. and furnished to the
Securities and Exchange Commission or its staff upon request.

Date:    May 10, 2005


                                             //s//  HOWARD C. WADSWORTH
                                         ---------------------------------------
                                         Howard C. Wadsworth
                                         Vice President, Treasurer and Secretary
                                         (Chief Financial Officer)