In a separate transaction, Kaneb Pipe Line Operating Partnership, L.P. signed a definitive agreement to acquire an approximately 2,000 mile anhydrous ammonia pipeline system from Koch Pipeline Company, L.P. 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 will announce next week the time for a conference call to discuss these acquisitions.

"The acquisitions of the terminals in Australia and New Zealand and the pipeline assets in the Midwestern United States both demonstrate the Partnership's growth strategy and will increase the value of the Partnership and the value of Kaneb Services LLC. We expect that each acquisition will be accretive to cash flow." said John R. Barnes, Chairman and Chief Executive Officer of Kaneb Services LLC.

The acquisition price of the terminals of Burns Philp in Australia and New Zealand, is about Australian $80 million or approximately U.S. $44 million, subject to adjustment based on a closing date balance sheet, for a total anticipated purchase price of approximately Australian $83 million. These port-side bulk liquid storage terminals provide storage and handling services to the chemicals, plastics and food ingredient industries in the two countries. They are the largest independent liquids terminaling providers in each of their countries.

The approximately 2,000 mile anhydrous ammonia pipeline system runs from the Louisiana Gulf Coast to the upper Midwest states. It is the largest fertilizer pipeline in the country. The system has connections with three third party owned deep-water import terminals, eleven third party production and fertilizer upgrade facilities and twenty-three third party delivery terminals and has an interconnect in the Midwest with another fertilizer pipeline. The pipeline system has a current delivery capacity of approximately 2.2 million tons of product annually and includes a 1,500 ton underground storage and terminal facility in Missouri.

Edward D. Doherty, Chairman and CEO of Kaneb Pipe Line Company LLC, the Partnership's General Partner, said, "Both of these acquisitions are the largest in their countries in their respective industries. Like our 1999 United Kingdom acquisition, the Australian and New Zealand terminals give us the critical mass to support a foreign operation. These first-class facilities are both supported by teams of experienced people. We look forward to the continued growth that these acquisitions will bring to our operations."

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 70 facilities in 26 states, the District of Columbia, Canada, the Netherlands Antilles and the United Kingdom. Its publicly traded entities are Kaneb Services LLC (NYSE:KSL) and Kaneb Pipe Line Partners, L.P. (NYSE:KPP) ("the Partnership").

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

Kaneb Pipe Line Partners, L.P., a master limited partnership, was formed in 1989 to own a 2,075 mile common carrier pipeline system from Kansas to North Dakota that has been managed by Kaneb Pipe Line Company LLC since 1953. Pipeline acquisitions in 1995 and 1998 added 725 miles of pipeline in Colorado, Iowa, South Dakota and Wyoming. 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.

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