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

                           KANEB Reports 2002 Results

DALLAS, TX (February 26, 2003) - KANEB today reported results for the year ended
December 31, 2002. The Kaneb  Companies are Kaneb  Services LLC (NYSE:  KSL) and
Kaneb Pipe Line Partners,  L.P. (NYSE: KPP, "the  Partnership").  Kaneb Services
LLC's wholly owned subsidiary, Kaneb Pipe Line Company LLC, is the Partnership's
General Partner.

"2002 was a very active and  productive  year for KANEB.  We acquired  two large
terminaling  operations and two very significant  pipeline systems that will add
substantially  to our  business  and our cash flow for many years to come," said
John R. Barnes,  Chairman and CEO of Kaneb  Services LLC.  "KANEB's  business is
represented in two publicly-traded vehicles - KSL and KPP - each of which offers
value to investors.  Our business is focused on steady growth,  which allows the
cash distributed to our investors to grow."

2002 RESULTS FOR KANEB SERVICES LLC

Kaneb  Services LLC reported net income of $47.2 million for the year,  compared
with $28.3 million for the prior year.  Diluted  earnings per share, as reported
for 2002, were $4.02, compared with $2.46 in the prior year. Consolidated income
before gain on settlement of treasury lock and loss on debt extinguishment,  net
of interest of outside non-controlling partners in KPP's net income, and gain on
issuance of units by KPP (see  Supplemental  Information in the attached  table)
was $22.4 million,  a 23% increase over the comparable  amount for 2001 of $18.3
million.  Diluted earnings per share, before gain on settlement of treasury lock
and loss on debt  extinguishment,  net of  interest  of outside  non-controlling
partners  in  KPP's  net  income,  and  gain on  issuance  of  units by KPP (see
Supplemental  Information in the attached  table) were $1.91,  compared to $1.59
last year.

KSL was formed as a limited  liability  company in 2001 with  assets  previously
held by Kaneb Services, Inc. (now Xanser Corporation).  Those assets include the
KPP general  partner  interest and incentive as well as 5.1 million  Partnership
units,  a wholesale  petroleum  product  marketing  company,  and a wholly owned
subsidiary that manages and operates the pipeline and terminaling assets of KPP.

2002 RESULTS FOR KANEB PIPE LINE PARTNERS, L.P.

Kaneb Pipe Line Partners, L.P. reported revenues of $386.6 million,  compared to
$207.8  million  for the prior  year.  Net  income  for 2002 was  $73.1  million
compared with $64.1 million last year.  Net income per unit was $2.96,  compared
with $3.03 last year. Income before gain on settlement of treasury lock and loss
on debt extinguishment,  net of minority interest, (see Supplemental Information
in the attached  table) was $73.3  million,  an 11% increase over the comparable
amount for 2001 of $66.1 million.

Pipeline  revenues  were $82.7  million,  compared with $75.0 million last year.
Pipeline operating income increased to $38.6 million,  up from $36.8 million for
2001. The positive,  accretive effect of the recent acquisitions and substantial
growth in base terminaling operations are reflected in the increased terminaling
revenues and operating income. Terminaling revenues increased to $206.0 million,
compared with $132.8 million in the prior year and terminaling  operating income
increased to $65.0 million, compared with $45.3 million for 2001.

"We are very pleased with the  Partnership's  progress in 2002. The acquisitions
made  late in the year did not have  enough  time to  significantly  impact  the
financial  results  for the year but we are eager to build on those  results  in
2003," said Edward D.  Doherty,  chairman and chief  executive  officer of Kaneb
Pipe Line Company LLC, the Partnership's General Partner.

ABOUT KANEB

     KANEB is a single  business  represented  by two separate  publicly  traded
entities  on the New  York  Stock  Exchange.  KANEB's  business  is  focused  on
mid-stream energy assets -- refined petroleum product  pipelines,  and petroleum
and  specialty  liquids  storage and  terminaling  facilities.  KANEB is a major
transporter  of  refined  petroleum  products  in the  Midwest  and is the third
largest  independent  liquids  terminaling  company  in  the  world.   Worldwide
operations include  facilities in 29 states,  the District of Columbia,  Canada,
the Netherlands  Antilles,  Australia,  New Zealand and the United Kingdom.  Its
publicly traded entities are Kaneb Services LLC (NYSE:  KSL) and Kaneb Pipe Line
Partners, L.P., (NYSE: KPP, "the Partnership").

     Kaneb Services LLC is a unique limited liability company, the only publicly
traded,  cash  distributing  entity taxed as a partnership that owns the general
partner  interest of another publicly traded master limited  partnership.  KSL's
assets are the KPP general  partner  interest  and 5.1  million KPP  partnership
units.  Through a wholly  owned  subsidiary,  Kaneb Pipe Line  Company  LLC, KSL
manages and  operates  the KPP  pipeline  and  terminaling  assets.  Another KSL
subsidiary provides wholesale fuel marketing services.

     Kaneb Pipe Line Partners, L.P., a master limited partnership, was formed in
1989 to own a 2,075 mile  common  carrier  pipeline  system from Kansas to North
Dakota that has been managed by Kaneb Pipe Line Company LLC since 1953. Pipeline
acquisitions  in 1995 and 1998 added 725 miles of  pipeline in  Colorado,  Iowa,
South  Dakota  and  Wyoming.  In 2002,  the  Partnership  acquired  the  largest
fertilizer  pipeline in the country, a 2,000-mile pipeline system that runs from
the Louisiana  Gulf Coast to the upper Midwest  states.  In December  2002,  the
Partnership  acquired a 400 mile products  pipeline and four  terminals in North
Dakota and Minnesota.  The Partnership entered the liquids terminaling  business
with a large  acquisition  in 1993,  and has more than  tripled the size of this
operation through subsequent acquisitions.  In 2001, the Partnership completed a
$165 million  acquisition  of seven West Coast,  U.S.  terminals.  In 2002,  the
Partnership completed a $300 million acquisition of two world-class  terminaling
facilities located in Point Tupper, Nova Scotia, Canada and on the island of St.
Eustatius in the  Netherlands  Antilles and the acquisition of eight bulk liquid
storage terminals in Australia and New Zealand.

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

<PAGE>
                               KANEB SERVICES LLC
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                              Three Months
                                           Ended December 31,      Year Ended December 31,
                                         -----------------------   -----------------------
                                           2002          2001         2002         2001
                                         ---------    ----------   ----------    ---------

<S>                                      <C>          <C>           <C>          <C>
Consolidated revenues:
   Services                              $  80,723    $   53,372    $ 288,669    $ 207,796
   Products                                103,331        63,051      381,159      327,542
                                         ---------    ----------    ---------    ---------
      Total consolidated revenues          184,054       116,423      669,828      535,338
                                         ---------    ----------    ---------    ---------
Consolidated costs and expenses:
   Cost of products sold                    99,143        63,934      367,870      326,230
   Operating costs                          39,608        23,565      132,269       91,704
   Depreciation and amortization            12,031         5,879       39,471       23,261
   Gain on sale of assets                     (503)         -            (609)        -
   General and administrative                7,434         5,423       24,468       14,352
                                         ---------    ----------    ---------    ---------
    Total consolidated costs and expenses  157,713        98,801      563,469      455,547
                                         ---------    ----------    ---------    ---------
Consolidated operating income               26,341        17,622      106,359       79,791

Consolidated interest and other income       3,182           (98)       3,664        4,132

Consolidated interest expense               (8,227)       (2,655)     (29,171)     (15,381)

Consolidated loss on debt extinguishment    (1,170)         -          (3,282)      (6,540)
                                         ---------    ----------    ---------    ---------
Consolidated income before gain on
   issuance of units by KPP, income
   taxes and interest of outside non-
   controlling partners in KPP's
   net income                               20,126        14,869       77,570       62,002

Gain on issuance of units by KPP             7,550          -          24,882        9,859

Income tax benefit (expense)                  (472)          198       (2,585)       2,413

Interest of outside non-controlling
   partners in KPP's net income            (14,397)      (11,813)     (52,639)     (45,951)
                                         ---------    ----------    ---------    ---------
Net income                               $  12,807    $    3,254    $  47,228    $  28,323
                                         =========    ==========    =========    =========
Earnings per share:
   Basic                                 $    1.12    $     0.29    $    4.13    $    2.57
                                         =========    ==========    =========    =========
   Diluted                               $    1.09    $     0.28    $    4.02    $    2.46
                                         =========    ==========    =========    =========
</TABLE>

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

<TABLE>
<CAPTION>

                                             Three Months
                                           Ended December 31,      Year Ended December 31,
                                         -----------------------   -----------------------
                                           2002          2001         2002         2001
                                         ---------    ----------   ----------    ---------

<S>                                      <C>          <C>           <C>          <C>
Net income                               $  12,807    $    3,254    $  47,228    $  28,323
Gain on settlement of treasury lock,
   net of interest of outside non-
   controlling partners in KPP's
   net income                                 (661)         -            (661)      (1,016)
Loss on debt extinguishment, net of
   interest of outside non-controlling
   partners in KPP's net income                256          -             758          859
Gain on issuance of units by KPP            (7,550)         -         (24,882)      (9,859)
                                         ---------    ----------    ---------    ---------
Income, as adjusted                      $   4,852    $    3,254    $  22,443    $  18,307
                                         =========    ==========    =========    =========
Diluted earnings per share, as adjusted  $    0.41    $     0.28    $    1.91    $    1.59
                                         =========    ==========    =========    =========
Weighted average diluted shares
   outstanding                              11,746        11,674       11,755       11,509
                                         =========    ==========    =========    =========

Consolidated revenues (including KPP):
   Pipeline                              $  24,752    $   19,821    $  82,698    $  74,976
   Terminaling                              55,971        33,551      205,971      132,820
   Product Marketing                       103,331        63,051      381,159      327,542
                                         ---------    ----------    ---------    ---------
                                         $ 184,054    $  116,423    $ 669,828    $ 535,338
                                         =========    ==========    =========    =========
Consolidated operating income
   (including KPP):
      Pipeline                           $  11,202    $   10,133    $  38,623    $  36,773
      Terminaling                           14,078         9,676       65,040       45,318
      Product Marketing                      1,755        (1,360)       4,692         (611)
      General and administrative expenses     (694)         (827)      (1,996)      (1,689)
                                         ---------    ----------    ---------    ---------
                                         $  26,341    $   17,622    $ 106,359    $  79,791
                                         =========    ==========    =========    =========
Supplemental cash flow information:
   Distributions received from KPP       $   5,616                  $  21,612
   Parent Company general and
      administrative expenses                 (694)                    (1,996)
   Parent Company interest expense            (185)                      (718)
                                         ---------                  ---------
                                         $   4,737                  $  18,898
                                         =========                  =========
      Cash distributed to shareholders   $   4,749                  $  18,351
                                         =========                  =========



</TABLE>
<PAGE>
                         KANEB PIPE LINE PARTNERS, L.P.
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per unit amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                              Three Months
                                           Ended December 31,      Year Ended December 31,
                                         -----------------------   -----------------------
                                           2002          2001         2002         2001
                                         ---------    ----------   ----------    ---------
<S>                                      <C>          <C>           <C>          <C>
Revenues:
   Services                              $  80,723    $   53,372    $ 288,669    $ 207,796
   Products                                 34,259          -          97,961         -
                                         ---------    ----------    ---------    ---------
      Total revenues                       114,982        53,372      386,630      207,796
                                         ---------    ----------    ---------    ---------
Costs and expenses:
   Cost of products sold                    31,465          -          90,898         -
   Operating costs                          39,375        23,299      131,326       90,632
   Depreciation and amortization            12,017         5,858       39,425       23,184
   Gain on sale of assets                     (503)         -            (609)        -
   General and administrative                5,758         4,406       19,869       11,889
                                         ---------    ----------    ---------    ---------
      Total costs and expenses              88,112        33,563      280,909      125,705
                                         ---------    ----------    ---------    ---------
Operating income                            26,870        19,809      105,721       82,091

Interest and other income                    3,156            59        3,570        4,277

Interest expense                            (7,978)       (2,639)     (28,110)     (14,783)

Loss on debt extinguishment                 (1,170)         -          (3,282)      (6,540)
                                         ---------    ----------    ---------    ---------
Income before minority interest and
   income taxes                             20,878        17,229       77,899       65,045

Minority interest in net income               (198)         (169)        (738)        (648)

Income tax provision                        (1,102)         (379)      (4,083)        (256)
                                         ---------    ----------    ---------    ---------
Net income                                  19,578        16,681       73,078       64,141

General partner's interest in net income    (1,526)         (906)      (5,638)      (2,774)
                                         ---------    ----------    ---------    ---------
Limited partners' interest in net income $  18,052    $   15,775    $  67,440    $  61,367
                                         =========    ==========    =========    =========
Allocation of net income per unit        $    0.74    $     0.78    $    2.96    $    3.03
                                         =========    ==========    =========    =========
Weighted average number of Partnership
   units outstanding                        24,296        20,285       22,763       20,285
                                         =========    ==========    =========    =========



</TABLE>

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

<TABLE>
<CAPTION>

                                              Three Months
                                           Ended December 31,      Year Ended December 31,
                                         -----------------------   -----------------------
                                           2002          2001         2002         2001
                                         ---------    ----------   ----------    ---------

<S>                                      <C>          <C>           <C>          <C>
Net income (in 000s)                     $  19,578    $   16,681    $  73,078    $  64,141
Gain on settlement of treasury lock,
   net of minority interest (in 000s)       (2,989)         -          (2,989)      (3,782)
Loss on debt extinguishment, net of
   minority interest (in 000s)               1,158          -           3,248        5,757
                                         ---------    ----------    ---------    ---------
Income before settlement of treasury
   lock and loss on debt extinguishment
   (in 000s)                             $  17,747    $   16,681    $  73,337    $  66,116
                                         =========    ==========    =========    =========
Income per unit before settlement of
   treasury lock and loss on debt
   extinguishment                        $    0.67    $     0.78    $    2.97    $    3.12
                                         =========    ==========    =========    =========
Revenues (in 000s):
   Pipeline                              $  24,752    $   19,821    $  82,698    $  74,976
   Terminaling                              55,971        33,551      205,971      132,820
   Product marketing                        34,259          -          97,961         -
                                         ---------    ----------    ---------    ---------
                                         $ 114,982    $   53,372    $ 386,630    $ 207,796
                                         =========    ==========    =========    =========
Operating income (in 000s):
   Pipeline                              $  11,202    $   10,133    $  38,623    $  36,773
   Terminaling                              14,078         9,676       65,040       45,318
   Product marketing                         1,590          -           2,058         -
                                         ---------    ----------    ---------    ---------
                                         $  26,870    $   19,809    $ 105,721    $  82,091
                                         =========    ==========    =========    =========
Depreciation and amortization (in 000s):
   Pipeline                              $   2,276    $    1,541    $   6,408    $   5,478
   Terminaling                               9,555         4,317       32,368       17,706
   Product marketing                           186          -             649         -
                                         ---------    ----------    ---------    ---------
                                         $  12,017    $    5,858    $  39,425    $  23,184
                                         =========    ==========    =========    =========
Capital expenditures (in 000s):
   Pipeline                              $   2,321    $    2,184    $   9,469    $   4,309
   Terminaling                               6,292         5,473       20,953       12,937
   Product marketing                           559          -             679         -
                                         ---------    ----------    ---------    ---------
                                         $   9,172    $    7,657    $  31,101    $  17,246
                                         =========    ==========    =========    =========
Pipeline operating statistics -
   Barrel miles shipped (in billions)*         4.6           4.7         18.3         18.6
                                         =========    ==========    =========    =========
Terminaling operating statistics:
   Average annual barrels of tankage
      utilized (in millions)                  49.7          30.1         46.5         30.1
                                         =========    ==========    =========    =========
   Average annual revenues per barrel
      of tankage utilized                $    4.47    $     4.38    $    4.43    $    4.41
                                         =========    ==========    =========    =========

</TABLE>


* Excludes barrel miles on pipelines acquired in 2002.