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

                       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 June 30, 2002

                                       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
              -----                                              ------

   Number of Units of the Registrant outstanding at July 31, 2002: 23,100,090


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

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


FORM 10-Q
QUARTER ENDED JUNE 30, 2002
--------------------------------------------------------------------------------

                                                                        Page No.
                           Part I. Financial Information

Item 1.  Financial Statements (Unaudited)

         Consolidated Statements of Income - Three and Six Months Ended
            June 30, 2002 and 2001                                         1

         Condensed Consolidated Balance Sheets - June 30, 2002
            and December 31, 2001                                          2

         Condensed Consolidated Statements of Cash Flows - Six
            Months Ended June 30, 2002 and 2001                            3

         Notes to Consolidated Financial Statements                        4

Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations                 12

Item 3.  Quantitative and Qualitative Disclosure About Market Risk        18

                           Part II. Other Information

Item 1.  Legal Proceedings                                                18

Item 6.  Exhibits and Reports on Form 8-K                                 18



<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             Six Months Ended
                                                                  June 30,                      June 30,
                                                       -----------------------------  -----------------------------
                                                            2002           2001            2002           2001
                                                       --------------  -------------  -------------  --------------

<S>                                                    <C>             <C>            <C>            <C>
Revenues:
    Services                                           $       73,674  $      52,952  $     132,762  $      101,021
    Products                                                   27,028           -            35,582           -
                                                       --------------  -------------  -------------  --------------
       Total revenues                                         100,702         52,952        168,344         101,021
                                                       --------------  -------------  -------------  --------------

Costs and expenses:
    Cost of products sold                                      25,103           -            32,932           -
    Operating costs                                            32,624         22,282         57,763          43,937
     Depreciation and amortization                              9,993          5,951         17,106          11,702
     General and administrative                                 5,226          2,848          9,562           5,176
                                                       --------------  -------------  -------------  --------------
       Total costs and expenses                                72,946         31,081        117,363          60,815
                                                       --------------  -------------  -------------  --------------
          Operating income                                     27,756         21,871         50,981          40,206

Interest and other income                                         110          3,388            181           4,096
Interest expense                                               (7,653)        (4,043)       (12,930)         (8,764)
                                                       --------------  -------------  -------------  --------------
Income before minority interest, income
    taxes and extraordinary item                               20,213         21,216         38,232          35,538
Minority interest                                                (191)          (211)          (367)           (352)
Income tax provision                                           (1,123)           (72)        (1,571)           (307)
                                                       --------------  -------------  -------------  --------------
Income before extraordinary item                               18,899         20,933         36,294          34,879
Extraordinary item - loss on debt
    extinguishment, net of minority
    interest and income taxes                                  (1,937)          -            (2,090)         (5,757)
                                                       --------------  -------------  -------------  --------------
       Net income                                              16,962         20,933         34,204          29,122

General partner's interest in net income                       (1,389)          (536)        (2,698)           (944)
                                                       --------------  -------------  -------------  --------------
Limited partners' interest in net income               $       15,573  $      20,397  $      31,506  $       28,178
                                                       ==============  =============  =============  ==============

Allocation of net income per unit:
    Before extraordinary item                          $          .78   $        1.01  $        1.54  $        1.68
    Extraordinary item                                           (.08)           -              (.09)          (.29)
                                                       --------------   -------------  -------------  -------------
                                                       $          .70   $        1.01  $        1.45  $        1.39
                                                       ==============   =============  =============  =============
Weighted average number of limited
   partnership units outstanding                               22,292          20,285         21,798         20,285
                                                       ==============   =============  =============  =============
</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>
                                                                              June 30,                December 31,
                                                                                2002                     2001
                                                                           -------------            ---------------
                                                                             (Unaudited)
         ASSETS
<S>                                                                        <C>                       <C>
Current assets:
     Cash and cash equivalents                                             $      73,261             $        7,903
     Accounts receivable                                                          31,411                     24,005
     Prepaid expenses and other                                                    9,053                      2,721
                                                                           -------------             --------------
         Total current assets                                                    113,725                     34,629
                                                                           -------------             --------------

Property and equipment                                                           965,505                    639,084
Less accumulated depreciation                                                    174,809                    157,810
                                                                           -------------             --------------
     Net property and equipment                                                  790,696                    481,274
                                                                           -------------             --------------

Investments in affiliates                                                         21,717                     22,252

Excess of cost over fair value of net assets of
    acquired businesses and other assets                                          13,132                     10,216
                                                                           -------------              -------------
                                                                           $     939,270             $      548,371
                                                                           =============             ==============

     LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
    Accounts payable                                                       $      11,715             $        6,541
    Accrued expenses                                                              37,159                     19,101
     Accrued distributions payable                                                19,840                     16,263
     Payable to general partner                                                    4,466                      4,701
                                                                           -------------             --------------
         Total current liabilities                                                73,180                     46,606
                                                                           -------------             --------------
Long-term debt                                                                   517,894                    262,624

Other liabilities and deferred taxes                                              22,034                     18,614

Minority interest                                                                  1,001                      1,010

Commitments and contingencies

Partners' capital                                                                325,161                    219,517
                                                                           -------------             --------------
                                                                           $     939,270             $      548,371
                                                                           =============             ==============
</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>
                                                                                       Six Months Ended
                                                                                           June 30,
                                                                           ----------------------------------------
                                                                                2002                      2001
                                                                           -------------             --------------
<S>                                                                        <C>                       <C>
Operating activities:
   Net income                                                              $      34,204             $       29,122
   Adjustments to reconcile net income to net
     cash provided by operating activities:
       Depreciation and amortization                                              17,106                     11,702
       Minority interest                                                             367                        352
       Equity in earnings of affiliates, net of distributions                        375                      1,639
       Deferred income taxes                                                       1,196                        307
       Extraordinary item                                                          2,090                      5,757
       Changes in working capital components                                     (10,076)                     4,385
                                                                           -------------             --------------
         Net cash provided by operating activities                                45,262                     53,264
                                                                           -------------             --------------

Investing activities:
   Acquisitions, net of cash acquired                                           (181,682)                  (106,810)
   Capital expenditures                                                          (14,218)                    (6,196)
   Proceeds from sale of assets                                                     -                         2,807
   Other, net                                                                       (363)                       (71)
                                                                           -------------             --------------
         Net cash used in investing activities                                  (196,263)                  (110,270)
                                                                           -------------             --------------

Financing activities:
   Issuance of debt                                                              496,087                    257,500
   Payments of debt                                                             (353,759)                  (154,314)
   Distributions, including minority interest                                    (34,759)                   (29,630)
   Net proceeds from issuance of limited
     partnership units                                                           108,790                      -
                                                                           -------------             --------------
         Net cash provided by financing activities                               216,359                     73,556
                                                                           -------------             --------------

Increase in cash and cash equivalents                                             65,358                     16,550
Cash and cash equivalents at beginning of period                                   7,903                      4,758
                                                                           -------------             --------------
Cash and cash equivalents at end of period                                 $      73,261             $       21,308
                                                                           =============             ==============

Supplemental cash flow information:
   Cash paid for interest                                                  $       8,446             $        7,781
                                                                           =============             ==============
   Non-cash investing and financing activities -
     Issuance of units for acquisition of terminals                        $        -                $       56,488
                                                                           =============             ==============

</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

     The unaudited  condensed  consolidated  financial  statements of Kaneb Pipe
     Line Partners,  L.P. and its subsidiaries (the "Partnership") for the three
     and six month periods  ended June 30, 2002 and 2001,  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,  2001.  In  the  opinion  of  the  Partnership's
     management,  the accompanying  condensed  consolidated financial statements
     contain the adjustments, consisting of normal recurring accruals, necessary
     to present fairly the  consolidated  financial  position of the Partnership
     and its  consolidated  subsidiaries  at June 30, 2002 and the  consolidated
     results of their  operations  and cash flows for the periods ended June 30,
     2002 and 2001.  Operating  results for the three and six months  ended June
     30, 2002 are not necessarily indicative of the results that may be expected
     for the year ending December 31, 2002.


2.   ACQUISITIONS AND FINANCINGS

     In January  2001,  the  Partnership  used  proceeds  from its $275  million
     revolving  credit  agreement  to repay in full its $128 million of mortgage
     notes. Under the provisions of the mortgage notes, the Partnership incurred
     a $6.5  million  prepayment  penalty  which,  net of minority  interest and
     income  taxes,  was  recognized  as an  extraordinary  expense in the first
     quarter of 2001.

     On January 3, 2001, the  Partnership,  through a  wholly-owned  subsidiary,
     acquired  Shore  Terminals  LLC  ("Shore")  for  $107  million  in cash and
     1,975,090  Partnership  units  (valued  at  $56.5  million  on the  date of
     agreement  and its  announcement).  Financing  for the cash  portion of the
     purchase  price was  supplied  under  the  Partnership's  revolving  credit
     agreement.  The  acquisition was accounted for using the purchase method of
     accounting.

     In January of 2002, the Partnership  issued 1,250,000  limited  Partnership
     units in a public  offering  at $41.65 per unit,  generating  approximately
     $49.7 million in net proceeds.  The proceeds were used to reduce the amount
     of  indebtedness  outstanding  under  the  Partnership's  revolving  credit
     agreement.

     In February 2002, Kaneb Pipe Line Operating Partnership,  L.P. ("KPOP"), an
     operating  subsidiary  of the  Partnership,  issued  $250  million of 7.75%
     senior  unsecured  notes due February 15, 2012.  The net proceeds  from the
     public  offering,  $248.2  million,  were used to repay  the  Partnership's
     revolving  credit agreement and to partially fund the acquisition of all of
     the  liquids   terminaling   subsidiaries  of  Statia  Terminals  Group  NV
     ("Statia").

     On February 28, 2002, the  Partnership  acquired  Statia for  approximately
     $178  million  in  cash  (net  of  acquired  cash).   The  acquired  Statia
     subsidiaries had approximately $107 million in outstanding debt,  including
     $101 million of 11.75% notes due in November  2003. The cash portion of the
     purchase price was funded by the  Partnership's  revolving credit agreement
     and proceeds from KPOP's  February 2002 public debt offering.  Assuming the
     acquisition occurred on January 1, 2001, unaudited pro forma revenues,  net
     income  and net  income per unit  would  have been  $193.0  million,  $33.3
     million and $1.39,  respectively,  for the six months  ended June 30, 2002.
     Unaudited pro forma revenues, net income and net income per unit would have
     been $106.8 million,  $22.1 million and $1.00,  respectively  for the three
     months  ended June 30, 2001 and $205.1  million,  $31.2  million and $1.40,
     respectively, for the six months ended June 30, 2001.

     In connection  with the  acquisition of Statia,  the  Partnership is in the
     process  of  finalizing  and  implementing  a plan  to  integrate  Statia's
     businesses  with the  Partnership's  existing  operations.  The plan,  when
     finalized,  is expected to provide for the  termination  and  relocation of
     certain  administrative  and  operating  employees  and  activities.  Costs
     associated  with  implementation,  which  will  be  recorded  in the  final
     allocation of the Statia purchase price, will include employee  termination
     benefits,  relocation  costs and lease  costs.  The plan is  expected to be
     finalized and implemented by December 31, 2002.

     On April 5, 2002, the Partnership  redeemed all of Statia's 11.75% notes at
     102.938% of the principal amount, plus accrued interest. The redemption was
     funded by the Partnership's revolving credit facility. Under the provisions
     of the 11.75% notes,  the  Partnership  incurred a $3.0 million  prepayment
     penalty, of which $2.0 million, net of minority interest, was recognized as
     an extraordinary expense in the second quarter of 2002.

     In May of 2002, the Partnership issued 1,565,000 limited  Partnership units
     in  a  public   offering  at  a  price  of  $39.60  per  unit,   generating
     approximately  $59.1  million in net  proceeds.  The offering  proceeds are
     expected to be used to reduce the amount of indebtedness  outstanding under
     the Partnership's  revolving credit agreement upon maturity of the interest
     rate periods currently selected.


3.   COMPREHENSIVE INCOME

     Comprehensive  income for the three and six months  ended June 30, 2002 and
     2001 is as follows:

<TABLE>
<CAPTION>
                                                         Three Months  Ended                 Six Months Ended
                                                              June 30,                           June 30,
                                                     ---------------------------        ---------------------------
                                                         2002           2001                2002           2001
                                                     -----------     -----------        -----------     -----------
                                                                             (in thousands)
<S>                                                  <C>             <C>                <C>             <C>
     Net income                                      $    16,962     $    20,933        $    34,204     $    29,122
     Foreign currency translation
        adjustment                                         1,035            (163)               627            (858)
                                                     -----------     -----------        -----------     -----------
     Comprehensive income                            $    17,997     $    20,770        $    34,831     $    28,264
                                                     ===========     ===========        ===========     ===========
</TABLE>


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 $0.79 per unit for the first
     quarter of 2002 was paid on May 15, 2002. A cash  distribution of $0.79 per
     unit for the second  quarter of 2002 was  declared  to holders of record on
     July 31, 2002 and will be paid on August 14, 2002.


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 not later than 1976, 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 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 against  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 nine 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 and the United  States  Coast  Guard,  pursuant to a
     Federal  Facilities  Agreement,  have  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  judgment  by the Texas  state  court
     that,  in the view of the DOJ,  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 two
     occasions since September 6, 2001 to discuss the Government's claims and to
     exchange information related to such claims. ST Services and the Government
     have also  exchanged  further  correspondence  related to the  Government's
     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.

     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 it 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/or  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.  Those electing not to participate in
     the  settlement  include 23 plaintiffs in a lawsuit in Maryland state court
     who allege damage to their property from the oil spill,  as well as a small
     number  of  other  individuals  who  have  not  filed  lawsuits  and  whose
     intentions  are currently  unknown to ST Services.  ST Services'  insurance
     carrier  has  assumed  the  defense  of the sole  continuing  action and ST
     Services  believes  that the  carrier  would  assume the defense of any new
     litigation  by  a  non-participant  in  the  settlement,  should  any  such
     litigation be commenced.  While the Partnership  cannot predict the amount,
     if any, of any liability it may have in the  continuing  action or in other
     potential  suits relating to this matter,  it believes that the current and
     potential  plaintiffs'  claims will be covered by insurance  and  therefore
     these  actions  will not have a material  adverse  effect on its  financial
     condition.

     PEPCO and ST Services have 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.  ST  Services'  insurer has paid ST
     Services' agreed 50 percent share of these assessment costs. The assessment
     process is  substantially  complete  and ST Services  anticipates  that the
     federal  government and the state of Maryland will conclude that a total of
     approximately $2.7 million of compensable natural resource damages occurred
     as a result of the oil spill.  ST Services  has no  agreement  at this time
     with the  federal  government  or the State of  Maryland,  nor with  PEPCO,
     concerning  payment for natural  resource damages or restoration of damaged
     resources. The Partnership believes that both the assessment costs and such
     damages  are  covered  by  insurance  and  therefore  will  not  materially
     adversely affect the Partnership's financial condition.

     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,  and ST
     Services  anticipates  that the DOT will rule  during the third  quarter of
     2002.

     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
     has been reached in principle  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 MDE.
     Accordingly,  the  Partnership  believes  that this  matter will not have a
     material adverse effect on its financial condition.

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


6.   BUSINESS SEGMENT DATA

     The Partnership  conducts  business through three principal  segments;  the
     "Pipeline  Operations,"  which consists  primarily of the transportation of
     refined  petroleum  products 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                 Six Months Ended
                                                              June 30,                           June 30,
                                                     ---------------------------        ---------------------------
                                                         2002           2001                2002           2001
                                                     -----------     -----------        -----------     -----------
                                                                             (in thousands)
<S>                                                  <C>             <C>                <C>             <C>
     Business segment revenues:
       Pipeline operations                           $    19,322     $    18,791        $    36,948     $    34,960
       Terminaling operations                             54,352          34,161             95,814          66,061
       Product sales operations                           27,028            -                35,582            -
                                                     -----------     -----------        -----------     -----------
                                                     $   100,702     $    52,952        $   168,344     $   101,021
                                                     ===========     ===========        ===========     ===========
     Business segment profit:
       Pipeline operations                           $     9,483     $     9,545        $    17,934     $    16,813
       Terminaling operations                             17,848          12,326             32,484          23,393
       Product sales operations                              425            -                   563            -
                                                     -----------     -----------        -----------     -----------
         Operating income                                 27,756          21,871             50,981          40,206
       Interest and other income                             110           3,388                181           4,096
       Interest expense                                   (7,653)         (4,043)           (12,930)         (8,764)
                                                     -----------     -----------        -----------     -----------
         Income before minority interest,
           income taxes and extraordinary
           item                                      $    20,213     $    21,216        $    38,232     $    35,538
                                                     ===========     ===========        ===========     ===========
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                                          June 30,     December 31,
                                                                                            2002           2001
                                                                                        -----------     -----------
                                                                                              (in thousands)

<S>                                                                                     <C>             <C>
     Total assets:
        Pipeline operations                                                             $    163,463    $    105,156
        Terminaling operations                                                               764,394         443,215
        Product sales operations                                                              11,413           -
                                                                                        ------------    ------------
                                                                                        $    939,270    $    548,371
                                                                                        ============    ============

</TABLE>


7.   ADOPTION OF RECENT ACCOUNTING PRONOUNCEMENTS

     Effective  January 1, 2002, the Partnership  adopted Statement of Financial
     Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS
     No.  142"),  which  eliminates  the  amortization  for  goodwill  and other
     intangible  assets with indefinite  lives.  Under SFAS No. 142,  intangible
     assets with lives  restricted by  contractual,  legal,  or other means will
     continue to be amortized over their useful lives.  As of June 30, 2002, the
     Partnership had no intangible assets subject to amortization under SFAS No.
     142.  Goodwill and other intangible  assets not subject to amortization are
     tested for impairment  annually or more  frequently if events or changes in
     circumstances  indicate  that the asset  might be  impaired.  SFAS No.  142
     requires a two-step process for testing  impairment.  First, the fair value
     of each  reporting  unit is compared  to its  carrying  value to  determine
     whether an indication of impairment  exists. If an impairment is indicated,
     then the fair value of the  reporting  unit's  goodwill  is  determined  by
     allocating the unit's fair value to its assets and  liabilities  (including
     any  unrecognized  intangible  assets)  as if the  reporting  unit had been
     acquired in a business  combination.  The amount of impairment for goodwill
     is measured as the excess of its carrying value over its fair value.  Based
     on  valuations  and  analysis  performed by the  Partnership  in the second
     quarter of 2002, the Partnership  determined that the implied fair value of
     its goodwill exceeded  carrying value, and therefore,  no impairment charge
     was necessary.  Goodwill amortization included in the results of operations
     of the Partnership for the three and six months ended June 30, 2001 was not
     material.

     Additionally,  effective January 1, 2002, the Partnership  adopted SFAS No.
     144 "Accounting for the Impairment or Disposal of Long-Lived Assets", which
     addresses financial accounting and reporting for the impairment or disposal
     of long-lived  assets.  The adoption of SFAS No. 144, which superceded SFAS
     No.  121,  did not have a  material  impact on the  consolidated  financial
     statements of the Partnership.



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


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

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

     Operating Results:

<TABLE>
<CAPTION>
     Pipeline Operations
                                                         Three Months  Ended                 Six Months Ended
                                                              June 30,                           June 30,
                                                     ---------------------------        ---------------------------
                                                         2002           2001                2002           2001
                                                     -----------     -----------        -----------     -----------
                                                                             (in thousands)
<S>                                                  <C>             <C>                <C>             <C>
     Revenues                                        $    19,322     $    18,791        $    36,948     $    34,960
     Operating costs                                       7,615           7,105             14,091          13,908
     Depreciation and amortization                         1,374           1,314              2,747           2,613
     General and administrative                              850             827              2,176           1,626
                                                     -----------     -----------        -----------     -----------
         Operating income                            $     9,483     $     9,545        $    17,934     $    16,813
                                                     ===========     ===========        ===========     ===========

</TABLE>

     Pipeline revenues are based on volumes shipped and the distances over which
     such volumes are  transported.  For the three and six month  periods  ended
     June 30, 2002, revenues increased by 3% and 6%,  respectively,  compared to
     the same 2001 periods,  due to increases in short-haul  volumes shipped and
     increases in tarrif rates. Barrel miles totaled 4.6 billion and 4.8 billion
     for the three  months ended June 30, 2002 and 2001,  respectively,  and 8.8
     billion and 8.9  billion  for the six months  ended June 30, 2002 and 2001,
     respectively.

     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, increased by $0.5 million and $0.2
     million  for  the  three  and  six  month  periods  ended  June  30,  2002,
     respectively,  when compared to 2001,  due primarily to second quarter 2002
     expenditures   for   routine   repairs   and   maintenance.   General   and
     administrative   costs,   which   include   managerial,   accounting,   and
     administrative  personnel  costs,  office  rental  and  expense,  legal and
     professional costs and other non-operating costs,  remained relatively flat
     for the three month  period  ended June 30,  2002,  and  increased  by $0.6
     million for the six months ended June 30, 2002,  due to first  quarter 2002
     increases in professional services and personnel related costs.




<PAGE>
     Terminaling Operations
<TABLE>
<CAPTION>
                                                         Three Months  Ended                 Six Months Ended
                                                              June 30,                           June 30,
                                                     ---------------------------        ---------------------------
                                                         2002           2001                2002           2001
                                                     -----------     -----------        -----------     -----------
                                                                             (in thousands)
<S>                                                  <C>             <C>                <C>             <C>
     Revenues                                        $    54,352     $    34,161        $    95,814     $    66,061
     Operating costs                                      24,070          15,177             42,388          30,029
     Depreciation and amortization                         8,412           4,637             14,085           9,089
     General and administrative                            4,022           2,021              6,857           3,550
                                                     -----------     -----------        -----------     -----------
         Operating income                            $    17,848     $    12,326        $    32,484     $    23,393
                                                     ===========     ===========        ===========     ===========
</TABLE>

     Terminaling   revenues  increased  by  $20.2  million  and  $29.8  million,
     respectively,  for the three and six month  periods  ended  June 30,  2002,
     compared to the same 2001 periods due to the Statia acquisition and overall
     increases in  utilization  at existing  locations.  Average  annual tankage
     utilized for the three and six month periods ended June 30, 2002  increased
     to 49.1  million and 44.0  million  barrels,  up from 30.2 million and 30.1
     million  barrels for the comparable  prior year periods.  For the three and
     six month  periods  ended June 30, 2002,  average  annualized  revenues per
     barrel of  tankage  utilized  decreased  to $4.44  and  $4.39  per  barrel,
     compared to $4.54 and $4.42 per barrel for the same prior year period,  due
     to the  storage of a larger  proportionate  volume of  petroleum  products,
     which are historically at lower per barrel rates than specialty chemicals.

     For the three and six month  periods ended June 30, 2002,  operating  costs
     increased by $8.9 million and $12.4 million, respectively, when compared to
     the same 2001 periods,  the result of the Statia  acquisition and increases
     in volumes stored.  General and administrative  costs for the three and six
     month  periods  ended June 30,  2002,  increased  by $2.0  million and $3.3
     million,  when  compared  to the  same  2001  periods  due  to  the  Statia
     acquisition.




<PAGE>
     Product Sales Operations
<TABLE>
<CAPTION>
                                                         Three Months  Ended                 Six Months Ended
                                                              June 30,                           June 30,
                                                     ---------------------------        ---------------------------
                                                         2002           2001                2002           2001
                                                     -----------     -----------        -----------     -----------
                                                                             (in thousands)

<S>                                                  <C>             <C>                <C>             <C>
     Revenues                                        $    27,028     $      -           $    35,582     $      -
     Cost of products sold                                25,103            -                32,932            -
                                                     -----------     -----------        -----------     -----------
     Gross margin                                    $     1,925     $      -           $     2,650     $      -
                                                     ===========     ===========        ===========     ===========
     Operating income                                $       425     $      -           $       563     $      -
                                                     ===========     ===========        ===========     ===========
</TABLE>

     The product sales business,  which was acquired with Statia on February 28,
     2002 (see  "Liquidity  and Capital  Resources"),  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 June
     30, 2002,  product sales revenues,  gross margin and operating  income were
     $27.0  million,  $1.9 million and $0.4 million,  respectively.  For the six
     months  ended June 30,  2002,  product  sales  revenues,  gross  margin and
     operating  income  were  $35.6  million,  $2.7  million  and $0.6  million,
     respectively.


     Interest and Other Income

     In March of 2001, a wholly-owned subsidiary of the Partnership entered into
     two contracts for the purpose of locking in interest  rates on $100 million
     of anticipated  ten-year public debt offerings.  As the interest rate locks
     were not designated as hedging instruments  pursuant to the requirements of
     Statement of Financial  Accounting Standards ("SFAS") No. 133, increases or
     decreases in the fair value of the contracts are included as a component of
     interest and other  income.  On May 22, 2001,  the  contracts  were settled
     resulting in an aggregate gain of $3.8 million.


     Interest Expense

     For the  three  and six  months  ended  June  30,  2002,  interest  expense
     increased by $3.6 million and $4.2 million,  respectively,  compared to the
     same 2001  periods,  due to  increases  in debt  resulting  from the Statia
     acquisition  (see "Liquidity and Capital  Resources"),  partially offset by
     overall declines in variable interest rates.


     Income Tax Provision

     Income  tax  provision  for the three and six months  ended  June 30,  2002
     includes $0.7 million and $0.8 million, respectively, in income tax expense
     relating to separate taxable wholly-owned  corporate  subsidiaries acquired
     with Statia (see "Liquidity and Capital Resources").


     Liquidity and Capital Resources

     During  the first six months of 2002,  the  Partnership's  working  capital
     requirements for operations,  capital expenditures (excluding acquisitions)
     and cash distributions were funded through the use of internally  generated
     funds.

     Cash provided by operations was $45.3 million and $53.3 million for the six
     months  ended June 30, 2002 and 2001,  respectively.  The  decrease in cash
     provided by operations for the six months ended June 30, 2002,  compared to
     the  same  2001  period,  was due to  normal  changes  in  working  capital
     components  resulting  from the timing of cash receipts and  disbursements.
     Capital  expenditures  (excluding  acquisitions) were $14.2 million for the
     six months  ended June 30, 2002,  compared to $6.2 million  during the same
     2001 period. The Partnership  anticipates that routine  maintenance capital
     expenditures will total approximately $20 million to $25 million (excluding
     acquisitions) for the year ending December 31, 2002.

     The Partnership has a credit  agreement with a group of banks that provides
     for a $275 million  unsecured  revolving  credit facility  through December
     2003.  The credit  facility  bears  interest  at  variable  rates and has a
     variable commitment fee on unutilized amounts. The credit facility contains
     certain  financial and  operational  covenants,  including  limitations  on
     investments,  sales of assets and transactions with affiliates, and, absent
     an event  of  default,  the  covenants  do not  restrict  distributions  to
     unitholders. At June 30, 2002, $243.0 million was drawn on the facility, at
     an interest rate of 3.12%.

     In January 2001, the  Partnership  used proceeds from its revolving  credit
     agreement  to repay in full its $128 million of mortgage  notes.  Under the
     provisions of the mortgage notes,  the Partnership  incurred a $6.5 million
     prepayment  penalty which,  net of minority  interest and income taxes, was
     recognized as an extraordinary expense in the first quarter of 2001.

     On January 3, 2001, the  Partnership,  through a  wholly-owned  subsidiary,
     acquired  Shore  Terminals  LLC  ("Shore")  for  $107  million  in cash and
     1,975,090  Partnership  units  (valued  at  $56.5  million  on the  date of
     agreement  and its  announcement).  Financing  for the cash  portion of the
     purchase  price  was  supplied  by  the   Partnership's   revolving  credit
     agreement.

     In January of 2002, the Partnership  issued 1,250,000  limited  Partnership
     units in a public  offering  at $41.65 per unit,  generating  approximately
     $49.7 million in net proceeds.  The proceeds were used to reduce the amount
     of  indebtedness  outstanding  under  the  Partnership's  revolving  credit
     agreement.

     In February 2002, Kaneb Pipe Line Operating Partnership,  L.P. ("KPOP"), an
     operating  subsidiary  of the  Partnership,  issued  $250  million of 7.75%
     senior  unsecured  notes due February 15, 2012.  The net proceeds  from the
     public  offering,  $248.2  million,  were used to repay  the  Partnership's
     revolving  credit agreement and to partially fund the acquisition of all of
     the  liquids   terminaling   subsidiaries  of  Statia  Terminals  Group  NV
     ("Statia").

     On February 28, 2002, the  Partnership  acquired  Statia for  approximately
     $178  million  in  cash  (net  of  acquired  cash).   The  acquired  Statia
     subsidiaries had approximately $107 million in outstanding debt,  including
     $101 million of 11.75% notes due in November  2003. The cash portion of the
     purchase price was funded by the  Partnership's  revolving credit agreement
     and proceeds from KPOP's February 2002 public debt offering.

     On April 5, 2002, the Partnership  redeemed all of Statia's 11.75% notes at
     102.938% of the principal amount, plus accrued interest. The redemption was
     funded by the Partnership's revolving credit facility. Under the provisions
     of the 11.75% notes,  the  Partnership  incurred a $3.0 million  prepayment
     penalty, of which $2.0 million, net of minority interest, was recognized as
     an extraordinary expense in the second quarter of 2002.

     In May of 2002, the Partnership issued 1,565,000 limited  Partnership units
     in  a  public   offering  at  a  price  of  $39.60  per  unit,   generating
     approximately  $59.1  million in net  proceeds.  The offering  proceeds are
     expected to be used to reduce the amount of indebtedness  outstanding under
     the Partnership's  revolving credit agreement upon maturity of the interest
     rate periods currently selected.

     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 $0.79 per unit for the first
     quarter of 2002 was paid on May 15, 2002. A cash  distribution of $0.79 per
     unit for the second  quarter of 2002 was  declared  to holders of record on
     July 31, 2002 and will be paid on August 14, 2002.

     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  borrowings  and/or  future  public  unit
     offerings.

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

     Information  regarding the Partnership's  Critical  Accounting  Policies is
     included in Item 7 of the Partnership's  Annual Report on Form 10-K for the
     year ended December 31, 2001.

     Recent Accounting Pronouncements

     The  FASB  has  issued  SFAS  No.  143  "Accounting  for  Asset  Retirement
     Obligations",  which  establishes  requirements for the removal-type  costs
     associated with asset retirements.  The Partnership is currently  assessing
     the impact of SFAS No. 143,  which must be adopted in the first  quarter of
     2003.

     In April of 2002, the FASB issued SFAS No. 145,  which,  among other items,
     affects the income statement  classification of gains and losses from early
     extinguishment  of debt.  Under SFAS No. 145,  which must be adopted by the
     first quarter of 2003,  early  extinguishment  of debt is now  considered a
     risk  management  strategy,  with  resulting  gains  and  losses  no longer
     classified an  extraordinary  item,  unless the debt  extinguishment  meets
     certain unusual in nature and infrequency of occurrence criteria,  which is
     expected to be rare. Upon adoption,  companies must reclassify  prior items
     that do not meet the new extraordinary  item  classification  criteria as a
     component  of operating  income.  Had the  provisions  of SFAS No. 145 been
     applied at June 30, 2002, the extraordinary items (before minority interest
     and income  taxes)  recorded for the three and six month periods ended June
     30, 2002 and 2001,  respectively,  would be  reclassified  as components of
     operating  income.  Adoption of SFAS No. 145 will have no effect on the net
     income of the Partnership.

     In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
     with  Exit or  Disposal  Activities",  which  requires  all  restructurings
     initiated  after  December 31, 2002 be recorded  when they are incurred and
     can be measured at fair value.  The Partnership is currently  assessing the
     impact of SFAS No. 146, which must be adopted in the first quarter of 2003.





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



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


Item 3. Quantitative and Qualitative Disclosure About Market Risk

The  principal  market  risks  (i.e.,  the risk of loss arising from the adverse
changes in market  rates and  prices) to which the  Partnership  is exposed  are
interest  rates  on  the  Partnership's  debt  and  investment  portfolios.  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 $243.0  million at June 30,  2002,  a one  percent  increase in interest
rates would increase annual net interest expense by approximately $2.4 million.


                           Part II - Other Information

Item 1. Legal Proceedings

The  information  contained  in Note 5 of the  Notes to  Consolidated  Financial
Statements included in this report is hereby incorporated by reference.


Item 6. Exhibits and Reports on Form 8-K

     (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.

     10.1 ST Agreement and Plan of Merger dated December 21, 1992 by and between
          Grace Energy  Corporation,  Support Terminal Services,  Inc., Standard
          Transpipe Corp., and Kaneb Pipe Line Operating Partnership, NSTS, Inc.
          and NSTI,  Inc. as amended by Amendment of STS Merger  Agreement dated
          March 2, 1993,  filed as Exhibit 10.1 of the exhibits to  Registrant's
          Current Report on Form 8-K ("Form 8-K"),  dated March 16, 1993,  which
          exhibit is hereby incorporated by reference.

     10.2 Agreement  for Sale and  Purchase  of  Assets  between  Wyco Pipe Line
          Company and KPOP,  dated  February 19, 1995,  filed as Exhibit 10.1 of
          the exhibits to the Registrant's March 1995 Form 8-K, which exhibit is
          hereby incorporated by reference.

     10.3 Asset Purchase Agreements between and among Steuart Petroleum Company,
          SPC Terminals, Inc., Piney Point Industries,  Inc., Steuart Investment
          Company,  Support Terminals Operating  Partnership,  L.P. and KPOP, as
          amended,  dated August 27, 1995,  filed as Exhibits 10.1,  10.2, 10.3,
          and 10.4 of the exhibits to  Registrant's  Current  Report on Form 8-K
          dated  January 3, 1996,  which  exhibits  are hereby  incorporated  by
          reference.

     10.4 Formation and Purchase  Agreement,  between and among Support Terminal
          Operating  Partnership,  L.P.,  Northville Industries Corp. and AFFCO,
          Corp.,   dated  October  30,  1998,  filed  as  exhibit  10.9  to  the
          Registrant's  Form 10-K for the year ended  December 31,  1998,  which
          exhibit is hereby incorporated by reference.

     10.5 Agreement,  between and among,  GATX Terminals  Limited,  ST Services,
          Ltd., ST Eastham, Ltd., GATX Terminals Corporation,  Support Terminals
          Operating Partnership,  L.P. and Kaneb Pipe Line Partners, L.P., dated
          January 26, 1999, filed as Exhibit 10.10 to the Registrant's Form 10-K
          for the  year  ended  December  31,  1998,  which  exhibit  is  hereby
          incorporated by reference.

     10.6 Credit  Agreement,  between  and  among,  Kaneb  Pipe  Line  Operating
          Partnership, L.P., ST Services, Ltd. and SunTrust Bank, Atlanta, dated
          January 27, 1999, filed as Exhibit 10.11 to the Registrant's Form 10-K
          for the  year  ended  December  31,  1998,  which  exhibit  is  hereby
          incorporated by reference.

     10.7 Revolving Credit Agreement,  dated as of December 28, 2000 among Kaneb
          Pipe Line Operating Partnership, L.P., Kaneb Pipe Line Partners, L.P.,
          The Lenders  From Time To Time Party  Hereto,  and SunTrust  Bank,  as
          Administrative  Agent,  filed as Exhibit 10.7 to the Registrant's Form
          10-K  for  the  year  ended  December  31,  2001,   which  exhibit  is
          incorporated herein by reference.

     10.8 Securities  Purchase  Agreement  Among Shore Terminals LLC, Kaneb Pipe
          Line  Partners,  L.P.  and the  Sellers  Named  Therein,  dated  as of
          September 22, 2000,  Amendment No. 1 To Securities Purchase Agreement,
          dated as of November 28, 2000 and Registration Rights Agreement, dated
          as of January 3, 2001,  filed as Exhibits  10.1,  10.2 and 10.3 of the
          exhibits to  Registrant's  Current Report on Form 8-K dated January 3,
          2001, which exhibits are hereby incorporated by reference.

     10.9 Stock  Purchase  Agreement,  dated as of  November  12,  2001,  by and
          between  Kaneb  Pipe Line  Operating  Partnership,  L.P.,  and  Statia
          Terminals Group NV, a public company with limited liability  organized
          under the laws of the Netherlands  Antilles,  filed as Exhibit 10.1 to
          the exhibits to Registrant's Current Report on Form 8-K, dated January
          11, 2002, and incorporated herein by reference.

    10.10 Voting and Option  Agreement  dated as of November  12,  2001,  by and
          between  Kaneb  Pipe Line  Operating  Partnership,  L.P.,  and  Statia
          Terminals  Holdings  N.V.,  a  Netherlands   Antilles  company  and  a
          shareholder  of  Statia  Terminals  Group NV, a  Netherlands  Antilles
          company filed as Exhibit 10.1 to the exhibits to Registrant's  Current
          Report on Form 8-K, dated January 11, 2002, and incorporated herein by
          reference.


     (b)  Reports on Form 8-K

          Current Report on Form 8-K, filed May 9, 2002.

          Current Report on Form 8-K, filed May 16, 2002.



                                    Signature

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned.



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


Date:  August 13, 2002                          //s//
                                         --------------------------------------
                                         Howard C. Wadsworth
                                         Vice President, Treasurer and Secretary




                     CERTIFICATE 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 the  Partnership's  Quarterly Report on Form 10-Q for the
quarterly  period ended June 30, 2002,  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.

Date:    August 13, 2002.


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



                     CERTIFICATE 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 the  Partnership's  Quarterly Report on Form 10-Q for the
quarterly  period ended June 30, 2002,  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.

Date:    August 13, 2002.


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