Deep Basin

Shipping Alberta’s fast-rising bitumen production to market through pipelines or on insulated rail cars depends on sufficient supplies of diluent, a variety of light hydrocarbons that, when blended with molasses-like bitumen, reduce the viscosity of the resulting mix. The problem is, in-region production of diluent — an economically favorable alternative to pipeline imports from the U.S. — has been growing more slowly than it was a few years ago, and increased demand for imported condensate could result in those pipelines being maxed out. In today’s RBN blog, we delve into what may be behind the slowing pace of Western Canadian diluent production and what the implications might be.

Corporate mergers and asset acquisitions are the normal course of business in almost any industry, but the pace of this kind of activity has recently picked up among Canada’s natural gas producers. Battered by several years of low prices, market share loss, and declining production, the position for many already-struggling gas producers only got worse when COVID hit last year. As you might expect, better placed and stronger gas producers are looking at struggling companies that have attractive assets to see if they might make accretive asset purchases or outright corporate takeovers. Today, we examine some of the most prominent natural-gas-related transactions and the motivations behind them.