EXHIBIT 99.1

                              KANEB SERVICES, INC.
                   ADOPTS REPLACEMENT STOCKHOLDER RIGHTS PLAN

         DALLAS,  TEXAS  April  9,  1998 -- Kaneb  Services,  Inc.  (NYSE:  KAB)
announced  today that its Board of Directors  has adopted a  Stockholder  Rights
Plan in which  rights  to  purchase  shares of junior  preferred  stock  will be
distributed as a dividend at the rate of one Right for each common share held as
of the close of business  on April 19,  1998.  The Rights Plan is  substantially
similar to and replaces  Kaneb's  existing  plan,  which expires by its terms on
that date.

         The  Rights  Plan is  designed  to deter  coercive  or unfair  takeover
tactics  and to prevent  an  acquiror  from  gaining  control  of Kaneb  without
offering a fair price to all of Kaneb's stockholders.

         In a letter to stockholders  announcing  adoption of the Plan, Mr. John
R. Barnes, Chairman and Chief Executive Officer of Kaneb, said, "We believe that
this Plan protects your interests in the event that you and Kaneb are confronted
with coercive or unfair takeover  tactics ... including offers that do not treat
all  stockholders  equally,  the  acquisition  in  the  open  market  of  shares
constituting  control without  offering fair value to all stockholders and other
coercive or unfair  tactics that could  impair the Board's  ability to represent
your interests fully."

         Mr. Barnes stressed, however, that "The Plan is not intended to prevent
an  acquisition  of the  Company  on terms  that are  favorable  and fair to all
stockholders,  and will not do so.  The Plan is  designed  to deal with the very
serious problem of unilateral  actions by hostile  acquirors that are calculated
to deprive a company's board and its  stockholders of their ability to determine
the destiny of the Company."

         Each Right will entitle  holders of the  Company's  common stock to buy
one one-hundredth of a share of Kaneb's Series B Participating  Junior Preferred
Stock  of the  Company  at an  exercise  price of  $15.00.  The  Rights  will be
exercisable  only if a person or group acquires  beneficial  ownership of 15% or
more of Kaneb  common  shares or  announces  a tender  or  exchange  offer  upon
consummation of which such person or group would beneficially own 20% or more of
the common shares.

         If any  person  becomes  the  beneficial  owner of 20% or more of Kaneb
common  shares,  each  Right not owned by such  person or related  parties  will
enable its holder to  purchase,  at the  Right's  then-current  exercise  price,
shares  of  common  stock  of the  Company  (or,  in  certain  circumstances  as
determined by the Board, a combination of cash, property, common shares or other
securities) having a value of twice the Right's exercise price. In addition,  if
the Company is involved in a merger or other  business  combination  transaction
with  another  person in which its common  shares are changed or  converted,  or
sells 50% or more of its  assets to  another  person,  each  Right  that has not
previously  been exercised  will entitle its holder to purchase,  at the Right's
then-current  exercise price,  common shares of such other person having a value
of twice the Right's exercise price.

         The Company will generally be entitled to redeem the Rights at $.01 per
Right at any time until the 15th day following  public  announcement  that a 15%
position has been acquired.

         Details of the Stockholder Rights Plan are outlined in a letter,  which
is being mailed to all stockholders.

         Kaneb  Services,   Inc.  provides   specialized   industrial  services,
including  under-pressure  leak sealing,  on-site  machining,  safety and relief
valve  testing  and repair,  passive  fire  protection  and  fugitive  emissions
inspections,  to  process  plants  worldwide  through  its  Furmanite  group  of
companies.  Kaneb provides pipeline  engineering services in eastern Germany and
manages and operates all of the pipelines and terminals owned by Kaneb Pipe Line
Partners,  L.P.  (NYSE:  KPP and KPU).  The  Partnership's  pipelines  transport
refined petroleum  products to destinations in nine midwestern states, and it is
the third  largest  independent  liquids  terminaling  operation  in the  United
States.