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


                                    FORM 8-K

                                 CURRENT REPORT


     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported): January 3, 2001



                              KANEB SERVICES, INC.
               (Exact name of registrant as specified in charter)



      Delaware                        001-05083                  74-1191271
(State of Organization)          (Commission File No.)        (I.R.S. Employer
                                                             Identification No.)



            2435 North Central Expressway
                  Richardson, Texas                             75080
      (Address of Principal Executive Offices)               (Zip Code)


       Registrant's telephone number, including area code: (972) 699-4000





<PAGE>

Item 2.   Acquisition or Disposition of Assets.

         On  January  3,  2001,  the   Registrant,   through  its   wholly-owned
subsidiary,  Kaneb Pipe Line  Company,  as general  partner for and on behalf of
Kaneb Pipe Line  Partners,  L.P.  ("KPP"),  completed the  acquisition  of Shore
Terminals LLC. Shore Terminals owns seven terminals,  four in California  (three
in the San  Francisco  Bay area and one in Los  Angeles) and one each in Tacoma,
Washington,  Portland, Oregon and Reno, Nevada, with a total tankage capacity of
7.8 million barrels.  All of the terminals  handle petroleum  products and, with
the exception of the Nevada terminal, have deep water access. The purchase price
was   approximately   $107,000,000  in  cash  and  1,975,000  units  of  limited
partnership interest of KPP. The acquisition, which will become a part of the ST
Services terminaling operations of KPP, will significantly increase ST Services'
presence on the West Coast.

         Financing for the cash portion of the purchase price was supplied under
KPP's new  $275,000,000  unsecured  revolving credit with a bank group headed by
SunTrust  Bank.  Prior to  closing  the  Shore  transaction,  proceeds  from the
facility were used to repay all of KPP's existing domestic bank debt and private
placement  notes,  resulting in the release of all  security  interests in KPP's
property.


Item 7.   Financial Statements and Exhibits.

         (c)      Exhibits.

         10.1     Securities Purchase Agreement Among Shore Terminals LLC, Kaneb
                  Pipe Line Partners,  L.P. and The Sellers Named Therein, dated
                  as of  September  22,  2000,  filed  as  Exhibit  10.1  to the
                  Exhibits  of KPP's  Current  Report on Form 8-K ("Form  8-K"),
                  which exhibit is hereby incorporated by reference.

         10.2     Amendment No. 1 To Securities Purchase Agreement,  dated as of
                  November  28,  2000,  filed as  Exhibit  10.2 to the Form 8-K,
                  which exhibit is hereby incorporated by reference.

         10.3     Registration  Rights  Agreement,  dated as of January 3, 2001,
                  filed as Exhibit 10.3 to the Form 8-K, which exhibit is hereby
                  incorporated by reference.



                                   SIGNATURES

                                            KANEB SERVICES, INC.



Date:  January _____, 2001                 By:  Michael R. Bakke, Controller
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{"company-data": {"conformed-name": "KANEB SERVICES INC", "cik": "0000054441", "assigned-sic": "1700", "irs-number": "751191271", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-05083", "film-number": "1510775"}, "business-address": {"street1": "2435 N. CENTRAL EXPRESSWAY", "street2": "SUITE 700", "city": "RICHARDSON", "state": "TX", "zip": "75080", "phone": "9726994000"}, "mail-address": {"street1": "P O BOX 650283", "city": "DALLAS", "state": "TX", "zip": "75265-0283"}, "former-company": {"former-conformed-name": "KANEB PIPE LINE CO", "date-changed": "19710610"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

        Date of Report (Date of earliest event reported): January 3, 2001

                              KANEB SERVICES, INC.
               (Exact name of registrant as specified in charter)

      Delaware                        001-05083                  74-1191271
(State of Organization)          (Commission File No.)        (I.R.S. Employer
                                                             Identification No.)

            2435 North Central Expressway
                  Richardson, Texas                             75080
      (Address of Principal Executive Offices)               (Zip Code)

       Registrant's telephone number, including area code: (972) 699-4000
Item 2.   Acquisition or Disposition of Assets.

         On  January  3,  2001,  the   Registrant,   through  its   wholly-owned
subsidiary,  Kaneb Pipe Line  Company,  as general  partner for and on behalf of
Kaneb Pipe Line  Partners,  L.P.  ("KPP"),  completed the  acquisition  of Shore
Terminals LLC. Shore Terminals owns seven terminals,  four in California  (three
in the San  Francisco  Bay area and one in Los  Angeles) and one each in Tacoma,
Washington,  Portland, Oregon and Reno, Nevada, with a total tankage capacity of
7.8 million barrels.  All of the terminals  handle petroleum  products and, with
the exception of the Nevada terminal, have deep water access. The purchase price
was   approximately   $107,000,000  in  cash  and  1,975,000  units  of  limited
partnership interest of KPP. The acquisition, which will become a part of the ST
Services terminaling operations of KPP, will significantly increase ST Services'
presence on the West Coast.

         Financing for the cash portion of the purchase price was supplied under
KPP's new  $275,000,000  unsecured  revolving credit with a bank group headed by
SunTrust  Bank.  Prior to  closing  the  Shore  transaction,  proceeds  from the
facility were used to repay all of KPP's existing domestic bank debt and private
placement  notes,  resulting in the release of all  security  interests in KPP's
property.

Item 7.   Financial Statements and Exhibits.

         (c)      Exhibits.

         10.1     Securities Purchase Agreement Among Shore Terminals LLC, Kaneb
                  Pipe Line Partners,  L.P. and The Sellers Named Therein, dated
                  as of  September  22,  2000,  filed  as  Exhibit  10.1  to the
                  Exhibits  of KPP's  Current  Report on Form 8-K ("Form  8-K"),
                  which exhibit is hereby incorporated by reference.

         10.2     Amendment No. 1 To Securities Purchase Agreement,  dated as of
                  November  28,  2000,  filed as  Exhibit  10.2 to the Form 8-K,
                  which exhibit is hereby incorporated by reference.

         10.3     Registration  Rights  Agreement,  dated as of January 3, 2001,
                  filed as Exhibit 10.3 to the Form 8-K, which exhibit is hereby
                  incorporated by reference.

                                   SIGNATURES

                                            KANEB SERVICES, INC.

Date:  January _____, 2001                 By:  Michael R. Bakke, Controller