Is the juice worth the squeeze?
Nicholas Lupick, CFA 403-539-8592
What’s the Goal?
Ultimately the goal of building diluent recovery units (DRU) in Alberta is fourfold: 1) improve bitumen producer economics (by reducing the requirement of diluent for heavy oil transport); 2) improve the safety of transported product (as ‘Neat-Bit’ should not be considered a dangerous good by the rail network operators); 3) improve broader transportation egress out of the basin (as a reduced level of diluent in solution means more production being transported) and; 4) provide a more valuable product for downstream heavy oil refiners.
The Benefits of ‘Neat-Bit’ CBR versus Dilbit CBR
There are multiple economic and social justifications for building a DRU, with the following being the most pertinent:
The Punch Line
The conclusion of our economic analysis of implementing a diluent recovery unit is threefold:
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