                                                                    Exhibit 99.1

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

                       KANEB Reports Third Quarter Results

                                   Highlights

|X| KPP earnings per unit $0.69 for 3Q04, compared with $0.63 for 3Q03
|X| KSL earnings per share $0.57 for 3Q04, compared with $0.49 for 3Q03

DALLAS,  TX  (November 1, 2004) - KANEB today  reported  results for the quarter
ended September 30, 2004. 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.

"KANEB had an  excellent  third  quarter.  The  Partnership  achieved 10 percent
bottom line growth and KSL  experienced  a 16 percent  increase in income," said
John R. Barnes,  chairman and CEO of KANEB.  "The KANEB companies are performing
very well and delivering substantial value to our unitholders and shareholders."

Pursuant to the  announcement  earlier today by Valero L.P. (NYSE:  VLI) and the
KANEB companies  (NYSE:  KPP and NYSE:  KSL) that they have executed  definitive
agreements  to merge Valero L.P. and Kaneb Pipe Line  Partners,  L.P.,  and that
Valero L.P. will purchase all of Kaneb Services'  shares for cash, there will be
a joint  conference  call this morning at 10:00 a.m. EST. This call will discuss
the  agreement,  and the  respective  earnings  of  Valero  L.P.  and the  KANEB
companies,  and will replace the KANEB conference call previously  scheduled for
Wednesday,  November 3, 2004, at 10:00 a.m. EST. Anyone  interested in listening
to  the  presentation  may  call  (800)  901-5218,  passcode  VALERO,  or  visit
www.valerolp.com.  Further  information  about the  transaction is provided in a
management  presentation posted to the Valero L. P. website,  and a link to this
presentation is available on the KANEB website at www.kaneb.com.


3Q 2004 RESULTS FOR KANEB SERVICES LLC

For the quarter ended  September 30, 2004,  Kaneb Services  LLC's  distributions
received from KPP, net of general and administrative expenses and parent company
interest expense (see Supplemental  Information in the attached table) increased
to $6.4 million,  compared  with $5.6 million for the third  quarter  2003.  KSL
reported net income was $6.8 million for the third quarter  2004,  compared with
$5.9 million for the third quarter 2003.  Diluted  earnings per share were $0.57
for the third quarter, compared with $0.49 for the same period last year.

For the nine months ended September 30, 2004, Kaneb Services LLC's distributions
received  from KPP, net of general  administrative  expenses and parent  company
interest expense (see Supplemental  Information in the attached table) increased
to $18.8  million,  compared  with $16.4  million  for the same  period in 2003.
Revenues for the nine months were $759.6  million,  compared with $651.7 million
last year. For the nine month period in 2004,  income before gain on issuance of
units by KPP and  cumulative  effect  of  change in  accounting  principle  (see
Supplemental Information in the attached table) was $20.2 million, compared with
$17.3  million for the nine month  period in 2003.  Reported  net income for the
nine months was $20.2  million,  compared  with $27.9  million in the prior year
period.

KSL 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.  Its 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.

3Q 2004 RESULTS FOR KANEB PIPE LINE PARTNERS, L.P.

Kaneb Pipe Line Partners, L.P. reported revenues of $167.7 million for the third
quarter 2004,  compared with $140.4 million for the third quarter last year. Net
income for the third quarter was $22.1 million,  compared with $20.1 million for
the third  quarter  last year.  Net income per unit for the  quarter  was $0.69,
compared  with  $0.63 for the same  period  last  year.  EBITDA  increased  (see
Supplemental  Information in the attached  table) to $48.2 million for the third
quarter 2004, compared with $45.2 million for the third quarter 2003.

For the nine months ended  September 30, 2004, KPP revenues were $468.0 million,
compared with $428.1 million last year.  Reported net income for the nine months
was $67.1 million, compared with $64.5 million in the prior year period. For the
nine month  period in 2004,  net income  per unit was $2.11  after a  cumulative
increase  of 3 percent  in the  weighted  average  number of  Partnership  units
outstanding,  compared  with  $2.13 for the nine  month  period in 2003.  EBITDA
increased (see Supplemental Information in the attached table) to $144.0 million
for the nine month period in 2004,  compared  with $138.5  million for the prior
year period.

"The Partnership  continues to acquire  strategic assets,  and in September,  we
closed  two  terminal  acquisitions  that add a  combined  capacity  of  770,000
barrels.  The first,  a Linden,  New Jersey  terminal  acquired from  ExxonMobil
Corporation, has very high historical throughput volume and allows us to realize
significant  synergies with our existing  terminal in New York Harbor,  which is
interconnected  with this new  terminal.  The second,  the  acquisition  of Ross
Chemical  and Storage  Company  Ltd.,  added a chemical  and  petroleum  storage
terminal at Grangemouth in Scotland that strengthens our position as the leading
terminal  operator in that country and  complements  our  existing  terminals in
Leith and  Clydebank,"  said Edward D.  Doherty,  chairman and CEO of Kaneb Pipe
Line Company LLC, the Partnership's General Partner.

Michael L.  Rose,  chief  operating  officer  of Kaneb  Pipe Line  Company  LLC,
commented on KPP's third quarter  performance:  "The  Partnership  significantly
increased  revenues this quarter,  which largely reflects a $21 million increase
from product sales as well as a $7.2 million  increase in terminaling.  Pipeline
revenues were down by $860,000  compared with the third quarter last year due to
weather,  with the  planting  season  being  later  this year than  last,  which
resulted in decreases in volumes  shipped and the price per ton on the anhydrous
ammonia  pipeline.  These  decreases were  partially  offset by increases on the
petroleum  pipeline side.  Pipeline  operating  income was affected by unusually
high maintenance and repair expenses  relating to this year's planned  integrity
management  program,  as well as increases in power and fuel costs.  Terminaling
delivered a strong $3.4 million increase in operating income,  and product sales
increased operating income by $2.0 million over the third quarter last year."

Pipeline  revenues for the third quarter 2004 (see  Supplemental  Information in
the attached  table) were $30.6  million,  compared  with $31.4  million for the
third quarter last year.  Pipeline operating income was $11.6 million,  compared
with $14.8  million last year.  Petroleum  pipeline  barrel miles shipped in the
third  quarter were 5.9 billion,  compared with 5.4 billion in the third quarter
last year.

Terminaling revenues for the third quarter 2004 (see Supplemental Information in
the attached  table) were $65.3  million,  compared  with $58.1  million for the
third  quarter  last  year.  Terminaling  operating  income  increased  to $19.2
million,  compared  with $15.7  million last year.  Terminaling  average  annual
barrels of tankage  utilized  were 48.7 million in the third  quarter,  compared
with 45.9 million last year, and the average  annualized  revenues per barrel of
tankage  utilized for the second  quarter were $5.33 compared with $5.02 for the
third quarter last year.

Product sales revenues for the third quarter 2004 (see Supplemental  Information
in the attached  table) were $71.8 million,  compared with $50.9 million for the
third  quarter  last year.  Product  sales  operating  income was $3.4  million,
compared with $1.4 million last year.

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,  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"). For more information, visit www.kaneb.com.

Kaneb Services LLC was formed as a limited liability company in 2001 from 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,  Kaneb Pipe Line Company  LLC,  that manages and operates the
pipeline  and  terminaling  assets  of KPP.  KSL 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.

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  Company's  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
Company's  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 PIPE LINE PARTNERS, L.P.
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per unit amounts)
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                          Three Months              Nine Months
                                                                       Ended September 30,       Ended September 30,
                                                                     ----------------------    ----------------------
                                                                        2004         2003         2004         2003
                                                                     ---------    ---------    ---------    ---------
<S>                                                                  <C>          <C>          <C>          <C>
Revenues:
        Services                                                     $  95,898    $  89,539    $ 280,654    $ 265,694
        Products                                                        71,770       50,865      187,385      162,415
                                                                     ---------    ---------    ---------    ---------
                Total revenues                                         167,668      140,404      468,039      428,109
                                                                     ---------    ---------    ---------    ---------
Costs and expenses:
        Cost of products sold                                           65,996       46,835      172,202      146,035
        Operating costs                                                 46,407       42,366      132,722      125,564
        Depreciation and amortization                                   14,050       13,188       41,677       39,814
        General and administrative                                       7,069        5,999       19,080       18,041
                                                                     ---------    ---------    ---------    ---------
                Total costs and expenses                               133,522      108,388      365,681      329,454
                                                                     ---------    ---------    ---------    ---------
Operating income                                                        34,146       32,016      102,358       98,655

Interest and other income                                                  125           43          165          132

Interest expense                                                       (10,719)     (10,660)     (31,667)     (28,178)
                                                                     ---------    ---------    ---------    ---------
Income before minority interest, income taxes and cumulative
        effect of change in accounting principle                        23,552       21,399       70,856       70,609

Minority interest in net income                                           (223)        (203)        (678)        (668)

Income tax expense                                                      (1,261)      (1,076)      (3,055)      (3,815)
                                                                     ---------    ---------    ---------    ---------
Income before cumulative effect of change in accounting principle       22,068       20,120       67,123       66,126

Cumulative effect of change in accounting principle - adoption of
        new accounting standard for asset retirement obligations          --           --           --         (1,577)
                                                                     ---------    ---------    ---------    ---------
Net income                                                              22,068       20,120       67,123       64,549

General partner's interest in net income                                (2,468)      (2,275)      (7,240)      (6,174)
                                                                     ---------    ---------    ---------    ---------
Limited partners' interest in net income                             $  19,600    $  17,845    $  59,883    $  58,375
                                                                     =========    =========    =========    =========
Allocation of net income per unit:
        Before cumulative effect of change in accounting principle   $    0.69    $    0.63    $    2.11    $    2.19
        Cumulative effect of change in accounting principle               --           --           --          (0.06)
                                                                     ---------    ---------    ---------    ---------
                                                                     $    0.69    $    0.63    $    2.11    $    2.13
                                                                     =========    =========    =========    =========
Weighted average number of Partnership units outstanding                28,325       28,318       28,320       27,403
                                                                     =========    =========    =========    =========
</TABLE>
<PAGE>
                         KANEB PIPE LINE PARTNERS, L.P.
                            SUPPLEMENTAL INFORMATION
                                  (Unaudited)

<TABLE>
<CAPTION>

                                                            Three Months              Nine Months
                                                         Ended September 30,       Ended September 30,
                                                       ----------------------    ----------------------
                                                          2004         2003         2004         2003
                                                       ---------    ---------    ---------    ---------
<S>                                                    <C>          <C>          <C>          <C>
Revenues (in 000s):
        Pipeline                                       $  30,589    $  31,449    $  89,102    $  88,807
        Terminaling                                       65,309       58,090      191,552      176,887
        Product sales                                     71,770       50,865      187,385      162,415
                                                       ---------    ---------    ---------    ---------
                                                       $ 167,668    $ 140,404    $ 468,039    $ 428,109
                                                       =========    =========    =========    =========
Operating income (in 000s):
        Pipeline                                       $  11,569    $  14,839    $  34,803    $  39,036
        Terminaling                                       19,181       15,732       58,541       51,567
        Product sales                                      3,396        1,445        9,014        8,052
                                                       ---------    ---------    ---------    ---------
                                                       $  34,146    $  32,016    $ 102,358    $  98,655
                                                       =========    =========    =========    =========
Depreciation and amortization (in 000s):
        Pipeline                                       $   3,649    $   3,540    $  10,872    $  10,548
        Terminaling                                       10,182        9,433       30,162       28,533
        Product sales                                        219          215          643          733
                                                       ---------    ---------    ---------    ---------
                                                       $  14,050    $  13,188    $  41,677    $  39,814
                                                       =========    =========    =========    =========
Capital expenditures (in 000s):
        Maintenance and environmental                  $   5,812    $   1,456    $  17,439    $  13,545
        Expansion                                          2,602        8,085        8,315       18,508
                                                       ---------    ---------    ---------    ---------
                                                       $   8,414    $   9,541    $  25,754    $  32,053
                                                       =========    =========    =========    =========
EBITDA (in 000s):
        Income before cumulative effect of change in
                accounting principle                   $  22,068    $  20,120    $  67,123    $  66,126
        Interest expense                                  10,719       10,660       31,667       28,178
        Income tax expense                                 1,261        1,076        3,055        3,815
        Depreciation and amortization                     14,050       13,188       41,677       39,814
        Interest and other income                           (125)         (43)        (165)        (132)
        Minority interest in net income                      223          203          678          668
                                                       ---------    ---------    ---------    ---------
                                                       $  48,196    $  45,204    $ 144,035    $ 138,469
                                                       =========    =========    =========    =========
Pipeline operating statistics:
        Barrel miles shipped on petroleum
                pipelines (in billions)                      5.9          5.4         16.7         15.8
                                                       =========    =========    =========    =========
        Volumes shipped on anhydrous ammonia
                pipeline (in thousands of tons)              246          288          822          876
                                                       =========    =========    =========    =========
Terminaling operating statistics:
        Average barrels of tankage
             utilized (in millions)                         48.7         45.9         48.2         47.1
                                                       =========    =========    =========    =========
        Average annualized revenues per barrel
             of tankage utilized                       $    5.33    $    5.02    $    5.31    $    5.02
                                                       =========    =========    =========    =========
</TABLE>


<PAGE>

                               KANEB SERVICES LLC
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)
                                  (Unaudited)


<TABLE>
<CAPTION>
                                                                                  Three Months              Nine Months
                                                                               Ended September 30,       Ended September 30,
                                                                             ----------------------    ----------------------
                                                                                2004         2003         2004         2003
                                                                             ---------    ---------    ---------    ---------

<S>                                                                          <C>          <C>          <C>          <C>
Consolidated revenues:
        Services                                                             $  95,898    $  89,539    $ 280,654    $ 265,694
        Products                                                               176,344      125,053      478,969      386,021
                                                                             ---------    ---------    ---------    ---------
                Total consolidated revenues                                    272,242      214,592      759,623      651,715
                                                                             ---------    ---------    ---------    ---------
Consolidated costs and expenses:
        Cost of products sold                                                  168,458      119,767      458,253      366,531
        Operating costs                                                         46,648       42,577      133,443      126,190
        Depreciation and amortization                                           14,056       13,198       41,701       39,845
        General and administrative                                               8,153        6,799       21,850       20,469
                                                                             ---------    ---------    ---------    ---------
                Total consolidated costs and expenses                          237,315      182,341      655,247      553,035
                                                                             ---------    ---------    ---------    ---------
Consolidated operating income                                                   34,927       32,251      104,376       98,680

Consolidated interest and other income                                             148           69          241          208

Consolidated interest expense                                                  (10,930)     (10,855)     (32,279)     (28,816)
                                                                             ---------    ---------    ---------    ---------
Consolidated income before gain on issuance of units by KPP,
        income taxes, interest of outside non-controlling partners
        in KPP's net income and cumulative effect of change in
        accounting principle                                                    24,145       21,465       72,338       70,072

Gain on issuance of units by KPP                                                  --           --           --         10,898

Income tax expense                                                              (1,259)        (969)      (3,028)      (3,597)

Interest of outside non-controlling partners in KPP's net income               (16,075)     (14,634)     (49,109)     (49,151)
                                                                             ---------    ---------    ---------    ---------
Income before cumulative effect of change in accounting principle                6,811        5,862       20,201       28,222

Cumulative effect of change in accounting principle - adoption of
        new accounting standard for asset retirement obligations                  --           --           --           (313)
                                                                             ---------    ---------    ---------    ---------
Net income                                                                   $   6,811    $   5,862    $  20,201    $  27,909
                                                                             =========    =========    =========    =========
Earnings per share:
        Basic:
                Before cumulative effect of change in accounting principle   $    0.58    $    0.50    $    1.72    $    2.45
                Cumulative effect of change in accounting principle               --           --           --          (0.03)
                                                                             ---------    ---------    ---------    ---------
                                                                             $    0.58    $    0.50    $    1.72    $    2.42
                                                                             =========    =========    =========    =========
        Diluted:
                Before cumulative effect of change in accounting principle   $    0.57    $    0.49    $    1.70    $    2.41
                Cumulative effect of change in accounting principle               --           --           --          (0.03)
                                                                             ---------    ---------    ---------    ---------
                                                                             $    0.57    $    0.49    $    1.70    $    2.38
                                                                             =========    =========    =========    =========
</TABLE>
<PAGE>

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


<TABLE>
<CAPTION>
                                                                           Three Months               Nine Months
                                                                        Ended September 30,       Ended September 30,
                                                                      ----------------------    ----------------------
                                                                         2004         2003         2004         2003
                                                                      ---------    ---------    ---------    ---------

<S>                                                                   <C>          <C>          <C>          <C>
Income before cumulative effect of change in accounting principle     $   6,811    $   5,862    $  20,201    $  28,222
Gain on issuance of units by KPP                                           --           --           --        (10,898)
                                                                      ---------    ---------    ---------    ---------

Income before gain on issuance of units by KPP and cumulative
        effect of change in accounting principle                      $   6,811    $   5,862    $  20,201    $  17,324
                                                                      =========    =========    =========    =========
Diluted earnings per share before gain on issuance of units by
        KPP and cumulative effect of change in accounting principle   $    0.57    $    0.49    $    1.70    $    1.47
                                                                      =========    =========    =========    =========
Weighted average diluted shares outstanding                              11,968       11,889       11,902       11,751
                                                                      =========    =========    =========    =========
Consolidated revenues (including KPP):
        Pipeline                                                      $  30,589    $  31,449    $  89,102    $  88,807
        Terminaling                                                      65,309       58,090      191,552      176,887
        Product Marketing                                               176,344      125,053      478,969      386,021
                                                                      ---------    ---------    ---------    ---------
                                                                      $ 272,242    $ 214,592    $ 759,623    $ 651,715
                                                                      =========    =========    =========    =========
Consolidated operating income (including KPP):
        Pipeline                                                      $  11,569    $  14,839    $  34,803    $  39,036
        Terminaling                                                      19,181       15,732       58,541       51,567
        Product Marketing                                                 4,877        2,219       12,787        9,634
        General and administrative expenses                                (700)        (539)      (1,755)      (1,557)
                                                                      ---------    ---------    ---------    ---------
                                                                      $  34,927    $  32,251    $ 104,376    $  98,680
                                                                      =========    =========    =========    =========
Supplemental cash flow information:
        Distributions received from KPP                               $   7,095    $   6,320    $  20,770    $  18,401
        General and administrative expenses                                (524)        (539)      (1,579)      (1,557)
        Parent Company interest expense                                    (143)        (147)        (417)        (474)
                                                                      ---------    ---------    ---------    ---------
                                                                      $   6,428    $   5,634    $  18,774    $  16,370
                                                                      =========    =========    =========    =========
</TABLE>

