Quote:
Originally Posted by RichieRich
Diluent is used to make the heavy oil more mobile within the pipelines, so it flows easier and has lower pressure losses. Without it the stuff would either not flow or require ridiculous pumps and many of them. The diluent has an extremely high recovery rate too. Thus, without at-source processing, the diluent is required to enable the heavy oils to reach downstream processing.
Also the big heavy-oil-specific plants down stateside are designed specifically for heavy oil. Since much of the Mexican and Venezuelan production has dried up, they still want to run at or near capacity. Therefore there is increased demand for Canadian oils.
Building these big pipelines is rarely a case of "build and they will come". The big economic analysis are very extensive, however they require a minimum commitment level prior to it even being feasible to start. So they get their contracts aligned a few years ahead based on this, and then look to incrementally fill the remainder of the pipeline with higher netback production. You can look online yourself for statements to this effect for KXL, TMX, and KAPS.
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No one wants to handle the condensate, it's a necessary evil but neither the producers nor the refiners want it. There's a ton to gain by reducing the requirements both economically and environmentally. We push a 1mbdp+ of condensate around across North America simply to move our barrels. There is a massive incentive to remove as much of it as possible.