VLI Valero Lp

Valero L.P. (NYSE:VLI) announced today that the U.S. Federal Trade Commission (FTC) approved a consent decree for the proposed merger of Valero L.P. and Kaneb Services LLC (NYSE:KSL) and Kaneb Pipe Line Partners, L.P. (NYSE:KPP). The merger is expected to close on July 1, 2005. "We are pleased to receive FTC clearance and are excited about combining these two great organizations," said Curt Anastasio, president and chief executive officer of Valero L.P. "With our combined operations, we see outstanding opportunities to increase unitholder value through a wider array of growth opportunities than either partnership had independently. What's more, we expect that the merger will be accretive to cash flow and will position the partnership for further distribution increases. In fact, after closing on the transaction, management intends to recommend to our board of directors an increase in the annual distribution rate from $3.20 per unit to $3.42 per unit," he said. As previously announced, the FTC's consent decree requires Valero L.P. to divest certain Kaneb assets in the Philadelphia area, Colorado and the San Francisco Bay area. Valero L.P. officials said the response from potential third-party purchasers of these assets to date has been very strong and they are confident that these assets can be divested quickly at a favorable price. About Valero L.P. A master limited partnership, Valero L.P. owns and operates crude oil and refined product pipelines, refined product terminals and crude oil storage facilities located predominantly in Texas, New Mexico, Colorado, Oklahoma, California, New Jersey and Mexico. The partnership's crude oil pipelines and storage facilities supply nine of Valero Energy Corp.'s key refineries with domestic and foreign crude oil and other feedstocks. Its refined product pipelines and terminals primarily supply gasoline and distillates to established and growing markets in the Mid-Continent, Southwest and Texas-Mexico border region of the United States. Valero L.P.'s primary customer is Valero Energy Corporation, which has a limited partnership interest and 2 percent general partnership interest in Valero L.P. For more information, visit Valero L.P.'s web site at www.valerolp.com. 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 second 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). For more information, visit www.kaneb.com. Cautionary Statement Regarding Forward-Looking Statements This press release includes forward-looking statements within the meaning of the Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of Valero L.P. All forward-looking statements are based on the partnership's beliefs as well as assumptions made by and information currently available to the partnership. These statements reflect the partnership's current views with respect to future events and are subject to various risks, uncertainties and assumptions. These risks, uncertainties and assumptions are discussed in Valero L.P.'s 2004 annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission.