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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

              [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the Quarterly Period Ended September 30, 2004

                                       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 001-05083

                               XANSER CORPORATION
             (Exact name of registrant as specified in its charter)

           DELAWARE                                              74-1191271
(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) 699-4000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

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

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

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

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

Class of Common Stock                          Outstanding at October 29, 2004
   No par value                                          31,617,254 shares

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


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004
--------------------------------------------------------------------------------

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

<S>               <C>                                                                                      <C>
Item 1.           Financial Statements (Unaudited)

                  Condensed Consolidated Statements of Income - Three and
                    Nine Months Ended September 30, 2004 and 2003                                              1

                  Condensed Consolidated Balance Sheets - September 30, 2004
                    and December 31, 2003                                                                      2

                  Condensed Consolidated Statements of Cash Flows - Nine
                    Months Ended September 30, 2004 and 2003                                                   3

                  Notes to Condensed Consolidated Financial Statements                                         4

Item 2.           Management's Discussion and Analysis of
                     Financial Condition and Results of Operations                                            11

Item 3.           Quantitative and Qualitative Disclosure About Market Risk                                   19

Item 4.           Controls and Procedures                                                                     19


                           Part II. Other Information

Item 6.           Exhibits                                                                                    20


</TABLE>

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands - Except Per Share Amounts)
(Unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                            Three Months Ended               Nine Months Ended
                                                               September 30,                    September 30,
                                                     -----------------------------    -----------------------------
                                                         2004            2003             2004            2003
                                                     -------------   -------------    -------------  --------------
<S>                                                  <C>             <C>              <C>            <C>
Revenues:
   Services                                          $      35,385   $      30,683    $     101,541  $       89,524
   Products                                                    379           7,059            2,043          13,675
                                                     -------------   -------------    -------------  --------------
     Total revenues                                         35,764          37,742          103,584         103,199
                                                     -------------   -------------    -------------  --------------
Costs and expenses:
   Operating costs                                          32,634          28,776           94,208          84,002
   Cost of products sold                                       294           6,831            1,219          12,424
   Depreciation and amortization                               842           1,019            2,612           3,118
   General and administrative                                  733             878            2,277           2,502
                                                     -------------   -------------    -------------  --------------
     Total costs and expenses                               34,503          37,504          100,316         102,046
                                                     -------------   -------------    -------------  --------------
Operating income                                             1,261             238            3,268           1,153

Interest and other income, net                                  32              58               97             188
Interest expense                                              (266)           (263)            (743)         (1,013)
                                                     -------------   -------------    -------------   -------------
Income before income taxes                                   1,027              33            2,622             328
Income tax benefit (expense)                                  (822)            334           (1,438)            602
                                                     -------------   -------------    -------------   -------------
Net income                                           $         205   $         367    $       1,184  $          930
                                                     =============   =============    =============  ==============
Earnings per common share - Basic
   and diluted                                       $         .01   $         .01    $         .04  $          .03
                                                     =============   =============    =============  ==============
</TABLE>


           See notes to condensed consolidated financial statements.
                                        1

<PAGE>


XANSER CORPORATION AND SUBSIDIARIES

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

                                                                            September 30,           December 31,
                                                                                2004                    2003
                                                                          ---------------        ------------------
                                                                             (Unaudited)
            ASSETS
<S>                                                                        <C>                     <C>
Current assets:
    Cash and cash equivalents                                              $       17,836          $      21,240
    Accounts receivable, trade                                                     33,542                 31,902
    Receivable from businesses distributed to common
        stockholders                                                                7,688                  7,564
    Inventories                                                                     9,467                  8,697
    Prepaid expenses and other                                                      4,445                  4,182
                                                                           --------------          -------------
        Total current assets                                                       72,978                 73,585
                                                                           --------------          -------------

Property and equipment                                                             44,694                 42,152
Less accumulated depreciation and amortization                                     32,060                 29,879
                                                                           --------------          -------------
    Net property and equipment                                                     12,634                 12,273
                                                                           --------------          -------------

Excess of cost over fair value of net assets of
    acquired businesses                                                            13,802                 13,802
Deferred income taxes and other assets                                              5,809                  5,130
                                                                           --------------          -------------
                                                                           $      105,223          $     104,790
                                                                           ==============          =============

      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term debt                                      $          658          $         738
    Accounts payable                                                                6,029                  3,098
    Accrued expenses                                                               16,937                 18,255
    Accrued income taxes                                                            7,608                  7,391
                                                                           --------------          -------------
        Total current liabilities                                                  31,232                 29,482
                                                                           --------------          -------------
Long-term debt, less current portion:
    Technical services                                                             12,883                 15,457
    Information technology services                                                   224                   -
    Parent company                                                                  5,000                  5,000
                                                                           --------------          -------------
        Total long-term debt, less current portion                                 18,107                 20,457
                                                                           --------------          -------------

Other liabilities                                                                   2,641                  2,399

Commitments and contingencies

Stockholders' equity:
    Common stock, without par value                                                 4,335                  4,333
    Additional paid-in capital                                                    126,540                126,561
    Treasury stock, at cost                                                       (26,180)               (26,267)
    Retained earnings (accumulated deficit)                                       (47,511)               (48,695)
    Accumulated other comprehensive income (loss)                                  (3,941)                (3,480)
                                                                           --------------          -------------
        Total stockholders' equity                                                 53,243                 52,452
                                                                           --------------          -------------
                                                                           $      105,223          $     104,790
                                                                           ==============          =============
</TABLE>

           See notes to condensed consolidated financial statements.
                                        2

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                       Nine Months Ended
                                                                                         September 30,
                                                                           ----------------------------------------
                                                                                 2004                    2003
                                                                           --------------          ----------------
<S>                                                                        <C>                     <C>
Operating activities:
   Net income                                                              $        1,184          $            930
   Adjustments to reconcile net income to net cash
     provided by operating activities:
       Depreciation and amortization                                                2,612                     3,118
       Deferred income taxes                                                         (880)                   (2,684)
       Other                                                                          242                       414
       Changes in working capital components                                         (843)                    1,141
                                                                           --------------          ----------------
         Net cash provided by operating activities                                  2,315                     2,919
                                                                           --------------          ----------------
Investing activities:
   Capital expenditures                                                            (3,166)                   (2,770)
   Other                                                                              354                       640
                                                                           --------------          ----------------
       Net cash used in investing activities                                       (2,812)                   (2,130)
                                                                           --------------          ----------------
Financing activities:
   Issuance of debt                                                                 1,702                       302
   Payments on debt                                                                (4,442)                   (6,892)
   Common stock issued and other                                                       68                       (13)
   Increase in receivable from businesses distributed
     to common stockholders                                                          (124)                     (287)
                                                                           --------------          ----------------
       Net cash used in financing activities                                       (2,796)                   (6,890)
                                                                           --------------          ----------------
Effect of exchange rate changes on cash                                              (111)                      355
                                                                           --------------          ----------------
Decrease in cash and cash equivalents                                              (3,404)                   (5,746)
Cash and cash equivalents at beginning of period                                   21,240                    25,624
                                                                           --------------          ----------------
Cash and cash equivalents at end of period                                 $       17,836          $         19,878
                                                                           ==============          ================
Supplemental cash flow information:
   Cash paid for interest                                                  $          822          $          1,362
                                                                           ==============          ================
   Cash paid for income taxes                                              $        2,122          $            924
                                                                           ==============          ================
</TABLE>

           See notes to condensed consolidated financial statements.
                                        3

<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(Unaudited)
--------------------------------------------------------------------------------


1.   GENERAL AND SIGNIFICANT ACCOUNTING POLICIES

     The condensed  consolidated  financial  statements  include the accounts of
     Xanser Corporation  ("Parent Company") and its subsidiaries  (collectively,
     the "Company").  All significant intercompany transactions and balances are
     eliminated in consolidation. The unaudited condensed consolidated financial
     statements  of the  Company  for the three  and nine  month  periods  ended
     September  30,  2004  and  2003  have  been  prepared  in  accordance  with
     accounting  principles  generally accepted in the United States of America.
     Significant  accounting  policies  followed by the Company are disclosed in
     the  notes  to  the  consolidated  financial  statements  included  in  the
     Company's  Annual Report on Form 10-K for the year ended December 31, 2003.
     In the opinion of the  Company's  management,  the  accompanying  condensed
     consolidated   financial   statements   contain  all  of  the  adjustments,
     consisting of normal  recurring  accruals,  necessary to present fairly the
     consolidated  financial  position of the Company at September 30, 2004, and
     the  consolidated  results of income and cash flows for the  periods  ended
     September  30,  2004 and  2003.  Operating  results  for the three and nine
     months  ended  September  30, 2004 are not  necessarily  indicative  of the
     results that may be expected for the year ending December 31, 2004. Certain
     prior year financial statement items have been reclassified to conform with
     the September 30, 2004 presentation.

     On November 27, 2000, the Board of Directors of the Company  authorized the
     distribution of its pipeline,  terminaling and product marketing businesses
     (the  "Distribution")  to its  stockholders  in the  form of a new  limited
     liability  company,  Kaneb  Services  LLC ("KSL").  On June 29,  2001,  the
     Distribution was completed,  with each shareholder of the Company receiving
     one common share of KSL for each three shares of the Company's common stock
     held on June 20, 2001, the record date for the  Distribution,  resulting in
     the  distribution  of 10.85  million  KSL common  shares.  Pursuant  to the
     Distribution,  the Company  entered  into an agreement  (the  "Distribution
     Agreement")  with KSL whereby,  KSL is obligated to pay the Company amounts
     equal to certain  expenses and tax  liabilities  incurred by the Company in
     connection with the Distribution.  The Distribution Agreement also requires
     KSL to pay the  Company  an  amount  calculated  based  on any  income  tax
     liability of the Company that, in the sole judgement of the Company, (i) is
     attributable  to  increases  in income tax from past years  arising  out of
     adjustments  required by federal and state tax  authorities,  to the extent
     that such increases are properly  allocable to the  businesses  that became
     part of KSL, or (ii) is  attributable  to the  distribution of KSL's common
     shares and the  operations of KSL's  businesses  prior to the  Distribution
     date. In the event of an examination of the Company by federal or state tax
     authorities, the Company will have unfettered control over the examination,
     administrative  appeal,  settlement  or  litigation  that may be  involved,
     notwithstanding that KSL has agreed to pay any additional tax. At September
     30,  2004,   $6.5  million  was  recorded  as  receivable  from  businesses
     distributed  to  common  stockholders  pursuant  to the  provisions  of the
     Distribution Agreement.

     In December of 2002,  the Financial  Accounting  Standards  Board  ("FASB")
     issued  Statement  of  Financial  Accounting  Standards  ("SFAS")  No. 148,
     "Accounting for Stock-Based  Compensation-Transition  and Disclosure." SFAS
     No. 148,  which amends SFAS No. 123,  provides for  alternative  methods of
     transition  for a  voluntary  change  to the fair  value  based  method  of
     accounting for stock-based  employee  compensation and requires  additional
     disclosures in annual and interim financial statements regarding the method
     of accounting for stock-based  employee  compensation and the effect of the
     method used on financial results. In accordance with the provisions of SFAS
     No. 123, the Company applies APB Opinion 25 and related  interpretations in
     accounting for its stock option plans and, accordingly,  does not recognize
     compensation  cost  based on the fair value of the  options  granted at the
     grant date as  prescribed  by SFAS 123. The  Black-Scholes  option  pricing
     model has been used to estimate the value of stock options issued.

     The  following  illustrates  the effect on net income and basic and diluted
     earnings per share if the fair value based method had been applied:

<TABLE>
<CAPTION>
                                                            Three Months Ended               Nine Months Ended
                                                               September 30,                    September 30,
                                                     -----------------------------    -----------------------------
                                                         2004            2003             2004            2003
                                                     -------------   -------------    -------------  --------------
                                                                (in thousands - except per share amounts)

<S>                                                  <C>             <C>              <C>            <C>
     Reported net income                             $         205   $         367    $       1,184  $          930

     Stock-based employee compensation
         expense determined under the fair
         value based method, net of income
         taxes                                                (108)            (47)            (144)           (106)
                                                     -------------   -------------    -------------  --------------

     Pro forma net income                            $          97   $         320    $       1,040  $          824
                                                     =============   =============    =============  ==============

     Earnings per share:
        As reported - basic and diluted              $         .01   $         .01    $         .04  $          .03
                                                     =============   =============    =============  ==============
        Pro forma - basic and diluted                $         -     $         .01    $         .03  $          .03
                                                     =============   =============    =============  ==============


</TABLE>
2.   COMPREHENSIVE INCOME

     Comprehensive income for the three and nine months ended September 30, 2004
     and 2003 is as follows:

<TABLE>
<CAPTION>

                                                            Three Months Ended               Nine Months Ended
                                                               September 30,                    September 30,
                                                     -----------------------------    -----------------------------
                                                         2004            2003             2004            2003
                                                     -------------   -------------    -------------  --------------
                                                                             (in thousands)
<S>                                                  <C>             <C>              <C>            <C>
     Net income                                      $         205   $         367    $       1,184  $          930
     Foreign currency translation
        adjustment                                              34             230             (461)          1,193
                                                     -------------   -------------    -------------  --------------
     Comprehensive income                            $         239   $         597    $         723  $        2,123
                                                     =============   =============    =============  ==============
</TABLE>

     At  September   30,  2004  and  December   31,  2003,   accumulated   other
     comprehensive  income  consisted of cumulative  gains from foreign currency
     translation adjustments of $1.1 million and $1.5 million, respectively, and
     cumulative   losses  from  minimum   pension   liability   adjustments  for
     subsidiaries of $5.0 million and $5.0 million, respectively.


3.   EARNINGS PER SHARE

     The following is a  reconciliation  of basic and diluted earnings per share
     (in thousands, except for per share amounts):
<TABLE>
<CAPTION>

                                                                                    Weighted
                                                                                     Average
                                                                                     Common            Per-Share
                                                                Net Income           Shares              Amount
                                                             ---------------     ----------------   ----------------

<S>                                                          <C>                          <C>      <C>
     Three Months Ended September 30, 2004
     -------------------------------------
         Basic earnings per share -
           Net income                                        $           205              32,039   $            .01
                                                                                                   ================
         Effect of dilutive securities                                  -                  1,054
                                                             ---------------     ---------------
         Diluted earnings per share -
           Net income                                        $           205              33,093   $            .01
                                                             ===============     ===============   ================

     Three Months Ended September 30, 2003
     -------------------------------------
         Basic earnings per share -
              Net income                                     $           367              31,992   $           .01
                                                                                                   ===============
         Effect of dilutive securities                                   -                 1,027
                                                             ---------------     ---------------
         Diluted earnings per share -
              Net income                                     $           367              33,019   $           .01
                                                             ===============     ===============   ===============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                                                    Weighted
                                                                                     Average
                                                                                     Common            Per-Share
                                                                Net Income           Shares              Amount
                                                             ---------------     ----------------   ----------------

<S>                                                          <C>                          <C>      <C>
     Nine Months Ended September 30, 2004
     ------------------------------------
         Basic earnings per share -
           Net income                                        $         1,184              32,033   $            .04
                                                                                                   ================
         Effect of dilutive securities                                  -                  1,089
                                                             ---------------     ---------------
         Diluted earnings per share -
           Net income                                        $         1,184              33,122   $            .04
                                                             ===============     ===============   ================

     Nine Months Ended September 30, 2003
     ------------------------------------
         Basic earnings per share -
              Net income                                     $           930              31,990   $            .03
                                                                                                   ================
         Effect of dilutive securities                                   -                   843
                                                             ---------------     ---------------
         Diluted earnings per share -
              Net income                                     $           930              32,833   $           .03
                                                             ===============     ===============   ===============
</TABLE>

     The Company's 8.75% convertible  subordinated debentures were excluded from
     the computation of diluted  earnings per share for the three and nine month
     periods ended  September 30, 2004 and 2003,  because the effects of assumed
     conversion would be anti-dilutive.  Options to purchase 955,542 and 172,736
     shares of  common  stock at  weighted  average  prices of $2.49 and  $2.69,
     respectively,  were  outstanding for the three and nine month periods ended
     September 30, 2004, respectively,  but were not included in the computation
     of diluted  earnings per share  because the options'  exercise  prices were
     greater  than the average  market  prices of the common  stock.  Options to
     purchase  619,000 and 1,406,751  shares of common stock at weighted average
     prices of $2.66 and $2.45, respectively, were outstanding for the three and
     nine month periods ended  September  30, 2003,  respectively,  but were not
     included  in the  computation  of diluted  earnings  per share  because the
     options' exercise prices were greater than the average market prices of the
     common stock.


<PAGE>
4.   CONTINGENCIES

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


5.   BUSINESS SEGMENT DATA

     The Company provides  technical  services to an  international  client base
     that includes refineries, chemical plants, pipelines, offshore drilling and
     production  platforms,  steel mills, food and drink processing  facilities,
     power generation and other process industries.  Additionally, the Company's
     information  technology  services  segment  provides  consulting  services,
     hardware  sales and other related  information  management  and  processing
     services to healthcare, governmental, insurance and financial institutions.
     General corporate  includes  compensation and benefits paid to officers and
     employees of the Company,  insurance  premiums,  general and administrative
     costs,  tax and  financial  reporting  costs,  and legal and audit fees not
     reasonably  allocable  to specific  business  segments.  General  corporate
     assets  include  cash,  deferred  taxes and other assets not related to the
     Company's segments.

     The Company measures segment profit as operating  income.  Total assets are
     those  assets,  including  excess  of cost  over  fair  value  of  acquired
     businesses, controlled by each reportable segment. Business segment data is
     as follows:

<TABLE>
<CAPTION>

                                                         Three Months Ended                Nine Months Ended
                                                            September 30,                    September 30,
                                                     -----------------------------    -----------------------------
                                                          2004           2003              2004           2003
                                                     -------------   -------------    -------------  --------------
                                                                             (in thousands)
<S>                                                  <C>             <C>              <C>            <C>
     Business segment revenues:
        Technical services                           $      29,781   $      25,763    $      86,521  $       73,882
        Information technology                               5,983          11,979           17,063          29,317
                                                     -------------   -------------    -------------  --------------
                                                     $      35,764   $      37,742    $     103,584  $      103,199
                                                     =============   =============    =============  ==============
     Technical services segment revenues:
        Underpressure services                       $      13,068   $      10,204    $      35,818  $       31,482
        Turnaround services                                 13,707          13,366           42,055          35,586
        Other services                                       3,006           2,193            8,648           6,814
                                                     -------------   -------------    -------------  --------------
                                                     $      29,781   $      25,763    $      86,521  $       73,882
                                                     =============   =============    =============  ==============
     Business segment profit:
        Technical services                           $       2,584   $       1,835    $       5,839  $        5,133
        Information technology services                       (590)           (719)            (294)         (1,478)
        General corporate                                     (733)           (878)          (2,277)         (2,502)
                                                     -------------   -------------    -------------  --------------
           Operating income                                  1,261             238            3,268           1,153
        Interest and other income, net                          32              58               97             188
        Interest expense                                      (266)           (263)            (743)         (1,013)
                                                     -------------   -------------    -------------  --------------
        Income before income taxes                   $       1,027   $          33    $       2,622  $          328
                                                     =============   =============    =============  ==============

</TABLE>
<TABLE>
<CAPTION>

                                                                                 September 30,       December 31,
                                                                                     2004                2003
                                                                                ---------------    ----------------
                                                                                             (in thousands)
<S>                                                                             <C>                <C>
     Total assets:
        Technical services                                                      $        66,584    $         66,117
        Information technology services                                                  13,346              14,902
        General corporate                                                                25,293              23,771
                                                                                ---------------    ----------------
                                                                                $       105,223    $        104,790
                                                                                ===============    ================
</TABLE>


6.   RECENT ACCOUNTING PRONOUNCEMENTS

     In December of 2003, SFAS No. 132 (revised),  "Employers' Disclosures about
     Pensions  and Other  Postretirement  Benefits",  was  issued.  SFAS No. 132
     (revised) prescribes  employers'  disclosures about pension plans and other
     postretirement  benefit  plans,  but does not  change  the  measurement  or
     recognition of those plans.  SFAS No. 132 (revised) retains and revises the
     disclosure requirements contained in the original SFAS No. 132 and requires
     additional disclosures about the assets,  obligations,  cash flows, and net
     periodic   benefit  cost  of  defined   benefit  pension  plans  and  other
     postretirement  benefit plans.  SFAS No. 132 (revised),  which applies to a
     defined benefits pension plan of a foreign subsidiary of the Company,  must
     be adopted by the Company in the fiscal year ending December 31, 2004.

     In December 2003, the FASB issued  Interpretation  No. 46 (revised December
     2003), "Consolidation of Variable Interest Entities" ("FIN 46R"), primarily
     to clarify the  required  accounting  for  interests  in variable  interest
     entities  ("VIEs").  This  standard  replaces FASB  Interpretation  No. 46,
     "Consolidation of Variable Interest  Entities," which was issued in January
     2003 to address certain situations in which a company should include in its
     financial  statements  the assets,  liabilities  and  activities of another
     entity.  For the Company,  application of FIN 46R is required for interests
     in certain VIEs that are commonly referred to as special-purpose  entities,
     or SPEs,  as of December 31, 2003,  and for interests in all other types of
     VIEs as of March  31,  2004.  The  application  of FIN 46R did not have any
     impact on the consolidated financial statements of the Company.




<PAGE>
XANSER CORPORATION AND SUBSIDIARIES

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

     This  discussion   should  be  read  in  conjunction   with  the  condensed
     consolidated financial statements of Xanser Corporation (the "Company") and
     notes thereto included elsewhere in this report.

     Overview

     The Company,  formed in 1953,  conducts  its  principal  businesses  in two
     industry segments, technical services and information technology services.

     The Company's  technical services business,  which is conducted through its
     Furmanite group of subsidiaries,  offers specialized  technical services to
     an international  base of clients located in the United States,  Europe and
     Asia-Pacific  regions.  The technical  services  business  provides on-line
     repairs of leaks in valves,  pipes and other  components of piping  systems
     and related  equipment,  typically in the  flow-process  industries.  Other
     services provided include on-site machining,  bolting and valve testing and
     repair on such systems and equipment.  In addition,  the division  provides
     hot  tapping,  fugitive  emissions  monitoring,  passive  fire  protection,
     concrete repair and heat exchanger repair.

     The Company's  information  technology services business,  Xtria,  provides
     services and related products to the healthcare industry, the financial and
     insurance  industries,  and various  governmental  agencies.  The segment's
     primary business is information technology services,  including application
     software, hardware, web hosted data processing,  networking, consulting and
     support services.

     Consolidated Results of Operations
<TABLE>
<CAPTION>

                                                       Three Months Ended                  Nine Months Ended
                                                          September 30,                      September 30,
                                                 -------------------------------    -------------------------------
                                                     2004              2003             2004              2003
                                                 -------------    --------------    -------------   ---------------
                                                             (in thousands - except per share amounts)
<S>                                              <C>              <C>               <C>             <C>
     Revenues                                    $      35,764    $       37,742    $     103,584   $       103,199
                                                 =============    ==============    =============   ===============
     Operating income                            $       1,261    $          238    $       3,268   $         1,153
                                                 =============    ==============    =============   ===============
     Net income                                  $         205    $          367    $       1,184   $           930
                                                 =============    ==============    =============   ===============
     Earnings per common share
        - basic and diluted                      $        0.01    $         0.01    $        0.04   $          0.03
                                                 =============    ==============    =============   ===============
     Capital expenditures                        $       1,067    $          538    $       3,166   $         2,770
                                                 =============    ==============    =============   ===============
</TABLE>

     For the three  months  ended  September  30,  2004,  consolidated  revenues
     decreased by $2.0  million,  or 5%, when  compared to the same 2003 period,
     due to a $6.0 million decrease in revenues from the information  technology
     services  business,  primarily related to equipment sales in non-performing
     operations  closed  in late  2003 (see  "Information  Technology  Services"
     below),  partially  offset by a $4.0 million  increase in revenues from the
     technical services business (see "Technical Services" below).  Consolidated
     operating income for the three months ended September 30, 2004 increased by
     $1.0 million, or 430%, when compared to the same 2003 period, due primarily
     to a $0.7 million increase in operating income from the technical  services
     business  and a $0.1  million  increase  from  the  information  technology
     business.  Net  income  for the  three  months  ended  September  30,  2004
     decreased by $0.2  million,  or 44%, when compared to the same 2003 period,
     as increases  in  operating  income were more than offset by a reduction in
     income tax benefits recognized (see "Income Taxes" below).

     For the  nine  months  ended  September  30,  2004,  consolidated  revenues
     increased by $0.4 million,  when compared to the same 2003 period, due to a
     $12.6 million  increase in revenues from the  technical  services  business
     (see "Technical  Services"  below),  offset by a $12.3 million  decrease in
     revenues  from the  information  technology  services  business,  primarily
     related to equipment sales in non-performing operations closed in late 2003
     (see  "Information  Technology  Services"  below).  Consolidated  operating
     income for the nine  months  ended  September  30, 2004  increased  by $2.1
     million,  or 183%,  when  compared to the same 2003  period,  due to a $0.7
     million increase in operating income from the technical  services  business
     and a  $1.2  million  decrease  in  operating  loss  from  the  information
     technology services business. Overall, net income for the nine months ended
     September 30, 2004 increased by $0.3 million,  or 27%, as higher  operating
     income and lower interest expense (see "Interest  Expense" below) more than
     offset a reduction in income tax benefits  recognized  (see "Income  Taxes"
     below).

     Technical Services
<TABLE>
<CAPTION>
                                                        Three Months Ended                Nine Months Ended
                                                          September 30,                      September 30,
                                                   ---------------------------      ------------------------------
                                                      2004             2003             2004            2003
                                                   -----------     -----------      -------------   --------------
                                                                          (in thousands)
<S>                                                <C>             <C>              <C>             <C>
     Revenues:
         United States                             $     6,200     $     5,275      $      20,352   $       17,229
         Europe                                         19,627          16,375             53,818           45,870
         Asia-Pacific                                    3,954           4,113             12,351           10,783
                                                   -----------     -----------      -------------   --------------
              Total Revenues                       $    29,781     $    25,763      $      86,521   $       73,882
                                                   ===========     ===========      =============   ==============
     Operating income:
         United States                             $      (249)    $      (569)     $        (263)  $         (952)
         Europe                                          3,031           2,297              6,129            6,024
         Asia-Pacific                                      376             780              1,589            1,617
         Headquarters                                     (574)           (673)            (1,616)          (1,556)
                                                   -----------     -----------      -------------   --------------
              Total operating income               $     2,584     $     1,835      $       5,839   $        5,133
                                                   ===========     ===========      =============   ==============
     Capital expenditures                          $       518     $       440      $       2,055   $        1,599
                                                   ===========     ===========      =============   ==============
</TABLE>

     For the three months ended  September 30, 2004,  revenues for the technical
     services business  increased by $4.0 million,  or 16%, when compared to the
     same 2003  period.  In the  United  States,  third  quarter  2004  revenues
     increased by $0.9  million,  or 18%,  when compared to the third quarter of
     2003, due to increases in underpressure, turnaround and other process plant
     services. In Europe, third quarter 2004 revenues increased by $3.3 million,
     or 20%,  when  compared  to the  same  2003  period,  due to  increases  in
     underpressure  services and favorable  foreign currency  exchange rates. In
     Asia-Pacific, third quarter 2004 revenues decreased by $0.2 million, or 4%,
     when  compared  to the  corresponding  2003  period,  due to  decreases  in
     turnaround  services,   partially  offset  by  increases  in  underpressure
     services and favorable foreign currency exchange rates.

     For the three months ended September 30, 2004, technical services operating
     income  increased by $0.7  million,  or 41%, when compared to the same 2003
     period.  In the United States,  third quarter 2004 operating loss decreased
     by $0.3 million,  or 56%, when compared to the same period in 2003,  due to
     the higher revenue levels. In Europe, operating income for the three months
     ended  September 30, 2004 increased by $0.7 million,  or 32%, when compared
     to the same 2003 period, due to the higher revenue levels, partially offset
     by an increase in general and administrative costs. In Asia-Pacific,  third
     quarter 2004  operating  income  decreased by $0.4  million,  or 52%,  when
     compared to the third quarter of 2003, due to the lower  revenues  combined
     with an increase in general and administrative costs.

     For the nine months ended  September  30, 2004,  revenues for the technical
     services business increased by $12.6 million,  or 17%, when compared to the
     same 2003 period. In the United States,  revenues for the nine months ended
     September 30, 2004 increased by $3.1 million,  or 18%, when compared to the
     corresponding  2003 period,  due to increases in underpressure,  turnaround
     and other process plant services.  In Europe,  revenues for the nine months
     ended September 30, 2004,  increased by $7.9 million, or 17%, when compared
     to the nine month period  ended  September  30,  2003,  due to increases in
     turnaround,  other process plant and  underpressure  services and favorable
     foreign currency  exchange rates,  partially offset by decreases in product
     sales.  In  Asia-Pacific,  revenues for the nine months ended September 30,
     2004  increased by $1.6  million,  or 15%,  when  compared to 2003,  due to
     increases in underpressure and other process plant services,  product sales
     and  favorable  foreign  currency  exchange  rates,   partially  offset  by
     decreases in turnaround services.

     For the nine months ended September 30, 2004,  technical services operating
     income  increased by $0.7  million,  or 14%, when compared to the same 2003
     period. In the United States,  the operating loss for the nine months ended
     September 30, 2004 decreased by $0.7 million,  or 72%, when compared to the
     same 2003 period,  due primarily to the higher revenue  levels.  In Europe,
     operating income for the nine months ended September 30, 2004, increased by
     $0.1 million,  or 2%, when compared to the nine months ended  September 30,
     2003,  due to the  higher  revenue  levels,  partially  offset  by a  lower
     operating margin service mix and higher general and  administrative  costs.
     In  Asia-Pacific,  operating income for the nine months ended September 30,
     2004 was flat compared to the same 2003 period,  as higher  revenue  levels
     were offset by higher general and administrative costs.

     Information Technology Services

<TABLE>
<CAPTION>
                                                       Three Months Ended                  Nine Months Ended
                                                          September 30,                      September 30,
                                                   ---------------------------      ------------------------------
                                                      2004             2003             2004            2003
                                                   -----------     -----------      -------------   --------------
                                                                          (in thousands)
<S>                                                <C>             <C>              <C>             <C>
     Revenues                                      $     5,983     $    11,979      $      17,063   $       29,317
                                                   ===========     ===========      =============   ==============
     Operating income (loss)                       $      (590)    $      (719)     $        (294)  $       (1,478)
                                                   ===========     ===========      =============   ==============
     Capital expenditures                          $       549     $        98      $       1,111   $        1,171
                                                   ===========     ===========      =============   ==============
</TABLE>


     For the three and nine month periods ended September 30, 2004,  information
     technology  revenues decreased by $6.0 million,  or 50%, and $12.3 million,
     or 42%, respectively, when compared to the same 2003 periods, due primarily
     to the Company's strategic decision to close  non-performing  operations in
     the   fourth   quarter   of   2003.   The   businesses    closed   included
     communications-related  installation  services  operations  and low  margin
     government equipment sales and operations.

     For the three and nine month periods ended September 30, 2004,  information
     technology  services operating loss decreased by $0.1 million,  or 18%, and
     $1.2 million, or 80%, respectively, when compared to the same 2003 periods,
     primarily due to lower general and administrative  costs, combined with the
     effects of closing the non-performing operations in late 2003.

     Interest Expense

     Interest  expense  decreased by $0.3  million  during the nine months ended
     September  30,  2004,  when  compared  to  the  same  2003  period,  due to
     reductions  in  both  Parent  Company  and  technical  services  debt  (see
     "Liquidity  and Capital  Resources")  and lower  interest rates on variable
     borrowings.

     Income Taxes

     Prior to December 31, 2003, the Company recognized a full federal and state
     income  tax  expense  or  benefit  for  income or losses  generated  by its
     domestic operations.  Federal and state benefits recorded for the three and
     nine month periods ended  September  30, 2003  aggregated  $0.9 million and
     $2.1 million, respectively. During the fourth quarter of 2003, the Company,
     pursuant to an evaluation  performed in accordance  with the  provisions of
     Statement of Financial  Accounting  Standards  ("SFAS") No. 109 "Accounting
     for Income  Taxes",  recorded a full  valuation  allowance for deferred tax
     assets   arising  from  prior  years'  tax  losses  (net   operating   loss
     carryforwards)  that are available to offset future  taxable  income.  As a
     result,  all domestic  federal and state income taxes recorded in the first
     nine  months  of 2004 are  fully  offset by a  corresponding  reduction  in
     valuation allowance.

     Liquidity and Capital Resources

     Cash provided by operating activities was $2.3 million and $2.9 million for
     the nine month periods ended September 30, 2004 and 2003, respectively. The
     2004 decrease,  when compared to the same 2003 period, was due primarily to
     normal changes in working capital  components  resulting from the timing of
     cash receipts and  disbursements,  partially offset by the overall increase
     in net  income.  During the nine  months  ended  September  30,  2004,  the
     Company's   working  capital   requirements   for  operations  and  capital
     expenditures were funded through the use of internally generated funds.

     Capital  expenditures were $3.2 million and $2.8 million for the nine month
     periods  ended  September  30,  2004 and 2003,  respectively.  Consolidated
     capital expenditures for the year 2004 have been estimated at $4 million to
     $5 million,  depending  on the  economic  environment  and the needs of the
     business. Future capital expenditures, however, will depend on many factors
     beyond  the  Company's  control,  including  demand  for  services  in  the
     technical  services and information  technology  services  businesses,  and
     local, state and federal government regulations.  No assurance can be given
     that required  capital  expenditures  will not exceed  anticipated  amounts
     during 2004 or thereafter.  Capital expenditures  (excluding  acquisitions)
     during  the  year  are  expected  to  be  funded  from  existing  cash  and
     anticipated cash flows from operations.

     At September 30, 2004,  $12.0 million was  outstanding  under a $25 million
     bank  loan  agreement  that  provides  working  capital  for the  technical
     services segment and is without recourse to the Parent Company.  Borrowings
     under the loan  agreement  bear  interest at the option of the  borrower at
     variable  rates (2.98% at September  30,  2004),  based on either the LIBOR
     rate or prime  rate,  have a  commitment  fee on the unused  portion of the
     facility and contain  certain  financial  and  operational  covenants  with
     respect to the technical services group,  including  percentage of tangible
     assets and revenues related to certain  geographical  areas, ratios of debt
     to cash  flow,  as defined  in the loan  agreement,  and cash flow to fixed
     charges and capital expenditures. At September 30, 2004, the Company was in
     compliance with all covenants.  The loan agreement  matures in January 2009
     and is secured by substantially all of the tangible assets of the technical
     services group.

     The  Parent   Company's  8.75%   subordinated   debentures   ($5.0  million
     outstanding  at  September  30,  2004) are  convertible  into shares of the
     Company's  common stock at the conversion price of $5.26 per share. On June
     30, 2003, the Company purchased $4.9 million of subordinated  debentures at
     par value, plus accrued interest.


     The following schedule sets forth, by period, the Company's debt repayment
     obligations and material contractual commitments at December 31, 2003.
<TABLE>
<CAPTION>

                                                         Less than                                        After
                                           Total          1 year       1 -3 years    4 -5 years          5 years
                                         ----------    ----------      ----------    -----------     --------------
                                                                    (in thousands)
<S>                                      <C>           <C>             <C>           <C>             <C>
     Debt:
        Technical services credit
           facility                      $   14,296    $       12      $      -      $       -       $       14,284
        Parent company convertible
           subordinated debentures            5,000           -               -             5,000             -
        Other                                   301           100              201           -                -
                                         ----------    ----------      -----------   ------------    --------------
                                             19,597           112              201          5,000            14,284
        Capital leases                        1,598           626              722            250             -
                                         ----------    ----------      -----------   ------------    --------------
           Debt subtotal                     21,195           738              923          5,250            14,284
                                         ----------    ----------      -----------   ------------    --------------
     Other contractual commitments:
        Operating leases                     10,477         3,326            4,311          1,367             1,473
                                         ----------    ----------      -----------   ------------    --------------
           Total                         $   31,672    $    4,064      $     5,234   $      6,617    $       15,757
                                         ==========    ==========      ===========   ============    ==============
</TABLE>

     The technical services business,  at its option,  lowered its borrowings by
     $2.3 million  during the nine months ended  September  30, 2004.  Otherwise
     there were no material changes to the Company's  schedule of the other debt
     repayment  obligations and material  contractual  commitments from December
     31, 2003 to September 30, 2004.

     A foreign subsidiary of the Company has certain future funding requirements
     regarding a defined  benefits  pension  plan, as set forth in Note 3 to the
     Company's  Consolidated  Financial  Statements  included  in the  Company's
     Annual Report on Form 10-K for the year ended December 31, 2003.

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


     Off-Balance Sheet Transactions

     The  Company  was not a party  to any  off-balance  sheet  transactions  at
     September 30, 2004.

     Critical Accounting Policies and Estimates

     The  preparation of the Company's  financial  statements in conformity with
     accounting  principles  generally  accepted in the United States of America
     requires  management  to make  estimates  and  assumptions  that affect the
     reported  amounts of assets and  liabilities  and disclosures of contingent
     assets and  liabilities  at the date of the  financial  statements  and the
     reported  amounts of revenues and  expenses  during the  reporting  period.
     Actual results could differ from those estimates.  Significant policies are
     presented  in the Notes to the  Consolidated  Financial  Statements  of the
     Company's Annual Report on Form 10-K for the year ended December 31, 2003.

     Critical  accounting  policies  are those  that are most  important  to the
     portrayal of the Company's  financial  position and results of  operations.
     These policies require  management's most difficult,  subjective or complex
     judgments, often employing the use of estimates about the effect of matters
     that are  inherently  uncertain.  The Company's  most  critical  accounting
     policies pertain to revenue  recognition,  the impairment of excess of cost
     over fair value of net assets of acquired businesses and income taxes.

     The Company's  information  technology  services  segment  includes revenue
     recognized  under  arrangements  with its customers that require the use of
     significant judgments and estimates by management.  The accounting policies
     for revenue  recognition in the  information  technology  services  segment
     comply  with  AICPA  Statement  of  Position  No.  97-2  "Software  Revenue
     Recognition".  SOP No. 97-2 requires  revenue to be  recognized  only after
     software  is  delivered,  all  significant  obligations  of the Company are
     fulfilled, and all significant  uncertainties regarding customer acceptance
     have  expired.  SOP No.  97-2 also  requires  the  unbundling  of  multiple
     elements and the  allocation  of pricing to each element  based upon vendor
     specific  objective  evidence of fair value.  In addition,  the information
     technology  services  segment's  revenues under long-term service contracts
     are  accounted  for  using  a  proportional  performance  method  or  on  a
     straight-line   basis  in  accordance  with  the  Securities  and  Exchange
     Commission's Staff Accounting Bulletin ("SAB") No. 101 "Revenue Recognition
     in Financial Statements", as amended by SAB No. 104.

     The Company  follows the  provisions  of SFAS No. 142  "Goodwill  and Other
     Intangible  Assets," which eliminates the amortization for goodwill (excess
     of cost over fair value of net  assets of  acquired  businesses)  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 September 30, 2004,
     the Company 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 assets  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 implied 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  and other  intangible  assets is  measured  as the  excess of its
     carrying  value  over its  implied  fair  value.  Based on  valuations  and
     analysis  performed  by the Company at  December  31, 2003 (the last annual
     evaluation date), no impairment charge was required.  Future evaluations of
     the fair value of goodwill  and other  intangible  assets are  dependent on
     many factors, several of which are out of the Company's control,  including
     the demand  for  services  provided.  To the  extent  that such  factors or
     conditions  change,  it is possible  that future  impairments  could occur,
     which  could have a material  effect on the  results of  operations  of the
     Company.

     At September 30, 2004, the Company had a significant amount of net deferred
     tax  assets,   which   consisted   principally   of  net   operating   loss
     carryforwards,  alternative minimum tax credit  carryforwards and temporary
     differences resulting from differences in the tax and book basis of certain
     assets and liabilities.  The net operating loss carryforwards  available as
     of December 31, 2003 expire, if unused,  as follows:  $1.2 million in 2006;
     $3.0 million in 2007;  $13.4 million in 2022; and $9.6 million in 2023. The
     alternative minimum tax credit carryforwards have no expiration date. Based
     on  evaluations  performed  by the Company  pursuant to SFAS No. 109 in the
     fourth quarter of 2003, a full, non-cash,  valuation allowance was provided
     with respect to the Company's  domestic  federal and state net deferred tax
     assets.  The  utilization  of net  operating  loss  carryforwards  could be
     subject to limitation in the event of a change in ownership,  as defined in
     the tax laws.




<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


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

Item 3. Quantitative and Qualitative Disclosure About Market Risk

The principal market risks pursuant to this Item (i.e., the risk of loss arising
from the  adverse  changes in market  rates and  prices) to which the Company is
exposed are interest rates on the Company's  debt and investment  portfolios and
fluctuations in foreign currency.

The Company  centrally manages its debt and investment  portfolios,  considering
investment  opportunities  and risks,  tax  consequences  and overall  financing
strategies.  The Company's  investment  portfolio  consists of cash equivalents;
accordingly,   the  carrying  amounts  approximate  fair  value.  The  Company's
investments  are not material to the financial  position or  performance  of the
Company.  Assuming  variable rate debt of $12.2 million at September 30, 2004, a
one percent increase in interest rates would increase annual interest expense by
approximately $0.1 million.

A  significant  portion  of  the  technical  services  business  is  exposed  to
fluctuations in foreign currency  exchange rates. See  "Management's  Discussion
and  Analysis  of  Financial  Condition  and Results of  Operations  - Technical
Services."


Item 4. Controls and Procedures

The Company's principal executive officer and principal financial officer, after
evaluating,  as of  September  30,  2004,  the  effectiveness  of the  Company's
disclosure  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities  Exchange Act of 1934),  have concluded that, as of such date,
the Company's  disclosure  controls and procedures are adequate and effective to
ensure that material  information  relating to the Company and its  consolidated
subsidiaries would be made known to them by others within those entities.

During the quarter ended  September 30, 2004,  there have been no changes in the
Company's  internal  controls  over  financial  reporting  that have  materially
affected, or are reasonably likely to materially affect, those internal controls
subsequent to the date of the  evaluation.  As a result,  no corrective  actions
were required or undertaken.


<PAGE>
XANSER CORPORATION AND SUBSIDIARIES


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

                           Part II - Other Information

Item 6. Exhibits

     3.1  Restated  Certificate  of  Incorporation  of  the  Registrant,   dated
          September  26,  1979,  filed as  Exhibit  3.1 of the  exhibits  to the
          Registrant's  Registration  Statement on Form S-16,  which  exhibit is
          hereby incorporated by reference.

     3.2  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the Registrant,  dated April 30, 1981,  filed as Exhibit 3.2 of the
          exhibits to the Registrant's  Annual Report on Form 10-K ("Form 10-K")
          for the  year  ended  December  31,  1981,  which  exhibit  is  hereby
          incorporated by reference.

     3.3  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the  Registrant,  dated May 28,  1985,  filed as Exhibit 4.1 of the
          exhibits  to the  Registrant's  Quarterly  Report on Form 10-Q  ("Form
          10-Q") for the quarter  ended June 30, 1985,  which  exhibit is hereby
          incorporated by reference.

     3.4  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the Registrant,  dated September 17, 1985,  filed as Exhibit 4.1 of
          the  exhibits  to the  Registrant's  Form 10-Q for the  quarter  ended
          September 30, 1985, which exhibit is hereby incorporated by reference.

     3.5  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the  Registrant,  dated July 10, 1990,  filed as Exhibit 3.5 of the
          exhibits to the Registrant's Form 10-K for the year ended December 31,
          1990, which exhibit is hereby incorporated by reference.

     3.6  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the Registrant,  dated September 21, 1990,  filed as Exhibit 3.5 of
          the  exhibits  to the  Registrant's  Form 10-Q for the  quarter  ended
          September 30, 1990, which exhibit is hereby incorporated by reference.

     3.7  Certificate of Amendment to the Restated  Certificate of Incorporation
          of the Registrant,  dated August 8, 2001,  filed as Exhibit 3.1 to the
          Registrant's  Current  Report on Form 8-K filed on  August  22,  2001,
          which exhibit is hereby incorporated by reference.

     3.8  By-laws of the Registrant,  filed as exhibit 3.7 to Registrant's  Form
          10-K for the year ended  December  31, 1998,  which  exhibit is hereby
          incorporated by reference.

     4.1  Certificate of Designation related to the Registrant's Adjustable Rate
          Cumulative Class A Preferred Stock, filed as Exhibit 4 of the exhibits
          to the  Registrant's  Form 10-Q for the quarter  ended  September  30,
          1983, which exhibit is hereby incorporated by reference.

     4.2  Certificate  of  Designation,  Preferences  and Rights  related to the
          Registrant's Series B Junior  Participating  Preferred Stock, filed as
          Exhibit 4.2 to the  Registrant's  10-K for the year ended December 31,
          1998, which exhibit is incorporated herein by reference.

     4.3  Certificate of Designation related to the Registrant's Adjustable Rate
          Cumulative  Class A Preferred  Stock,  Series C, dated April 23, 1991,
          filed as Exhibit 4.4 of the exhibits to Registrant's Form 10-K for the
          year ended December 31, 1991, which exhibit is hereby  incorporated by
          reference.

     4.4  Certificate of Designation related to the Registrant's Adjustable Rate
          Cumulative  Class A Preferred  Stock,  Series F, dated June 12,  1997,
          filed as Exhibit 4.4 of the Exhibits to Registrant's Form 10-K for the
          year ended December 31, 1997, which exhibit is hereby  incorporated by
          reference.

     4.5  Indenture between Moran Energy Inc.  ("Moran") and First City National
          Bank of Houston  ("First City"),  dated January 15, 1984,  under which
          Moran issued the 8 3/4% Convertible  Subordinated Debentures due 2008,
          filed as Exhibit  4.1 to Moran's  Registration  Statement  on Form S-3
          (SEC  File No.  2-81227),  which  exhibit  is hereby  incorporated  by
          reference.

     4.6  First  Supplemental  Indenture  between the Registrant and First City,
          dated as of  March  20,  1984,  under  which  the  Registrant  assumed
          obligations under the Indenture listed as Exhibit 4.5 above,  filed as
          Exhibit 4.7 of the Registrant's  Form 10-K for the year ended December
          31, 1983, which exhibit is hereby incorporated by reference.

     31.1 Certification of Chief Executive  Officer,  Pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002, dated November 8, 2004.

     31.2 Certification of Chief Financial  Officer,  Pursuant to Section 302 of
          the Sarbanes-Oxley Act of 2002, dated November 8, 2004.

     32.1 Certification of Chief Executive  Officer,  Pursuant to Section 906(a)
          of the Sarbanes-Oxley Act of 2002, dated November 8, 2004.

     32.2 Certification of Chief Financial  Officer,  Pursuant to Section 906(a)
          of the Sarbanes-Oxley Act of 2002, dated November 8, 2004.


                                    Signature


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



                                        XANSER CORPORATION
                                        (Registrant)


Date:  November 8, 2004                   //s// MICHAEL R. BAKKE
                                        ----------------------------------------
                                        Michael R. Bakke
                                        Controller and Chief Accounting Officer
                                        (Duly Authorized Officer)


<PAGE>

                                                                    Exhibit 31.1

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



I, John R. Barnes, Chief Executive Officer of Xanser Corporation certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Xanser Corporation;

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

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

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

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

     b)   [intentionally omitted pursuant to SEC Release No. 34-47986];

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

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

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

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

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



Date: November 8, 2004



                                        //s//  JOHN R. BARNES
                                    --------------------------------------------
                                    John R. Barnes
                                    President and Chief Executive Officer


<PAGE>
                                                                    Exhibit 31.2


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



I, Howard C. Wadsworth,  Chief Financial Officer of Xanser  Corporation  certify
that:

1.   I have reviewed this quarterly report on Form 10-Q of Xanser Corporation;

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

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

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

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

     b)   [intentionally omitted pursuant to SEC Release No. 34-47986];

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

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

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

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

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


Date: November 8, 2004


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



<PAGE>
                                                                    Exhibit 32.1



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



     The undersigned,  being the Chief Executive  Officer of Xanser  Corporation
(the "Company") hereby certifies that, to his knowledge, the Company's Quarterly
Report on Form 10-Q for the quarterly  period ended  September  30, 2004,  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 Company.

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

Date: November 8, 2004



                                        //s//  JOHN R. BARNES
                                    --------------------------------------------
                                    John R. Barnes
                                    President and Chief Executive Officer



<PAGE>
                                                                    Exhibit 32.2



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



     The undersigned,  being the Chief Financial  Officer of Xanser  Corporation
(the "Company") hereby certifies that, to his knowledge, the Company's Quarterly
Report on Form 10-Q for the quarterly  period ended  September  30, 2004,  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 Company.

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

Date: November 8, 2004


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