Natural gasoline is the most expensive natural gas liquid (NGL), accounting for more than 25% of the price-weighted NGL barrel (versus 10%-12% of the barrel by volume). It is also notoriously difficult to track, with similar products having different names and unclear demand segments. In fact, the difficulty tracking portions of demand, combined with an ongoing imbalance in crude oil supply/demand, led the Energy Information Administration (EIA) to change the way it accounted for natural gasoline demand, which made more than 200 Mb/d of production “disappear” in 2022. In today’s RBN blog, we look at natural gasoline’s primary uses and what was behind the EIA’s decision.
diluent
Friday, 4/11/2025
It’s the most expensive NGL, accounting for more than 25% of the value of a weighted average barrel. It is the only NGL that does not require storage or transportation under pressure. And it’s the most misunderstood of the NGLs, going by different names depending on the market and geography, with a chameleon-like characteristic that allows it to be transformed into various products. And to further complicate matters, other petroleum liquids are similar to natural gasoline, but not identical. In today’s RBN blog, we’ll delve into the mysteries of natural gasoline and explore what makes it such a crucial component of the hydrocarbon landscape.
Here, There and Everywhere - Despite Trade Frictions, Enbridge Forges Ahead with Pipeline Expansions
Wednesday, 3/26/2025
It might seem crazy to talk about expanding crude oil and diluent pipeline systems between Canada and the U.S. amid what could escalate into an all-out trade war between the two nations. However, Enbridge, one of the largest pipeline operators in the world, is doing just that — actively planning and investing in pipeline expansions for its Mainline, Express-Platte and Southern Lights systems that would help move an ever-rising tide of Canada’s oil sands crude to market in the years ahead. We examine Enbridge’s plans in today’s RBN blog.
Tuesday, 12/31/2024
As 2023 wrapped up one year ago, it seemed there were a lot of moving parts out there in energy markets. Capacity constraints were back on the radar screen, and while prices appeared stable, they were overshadowed by the looming threat of escalating conflicts in Ukraine and the Middle East. Opportunities abounded for energy projects, including natural gas storage, export terminals, and just about any pipeline that moved supply to the Gulf Coast. However, challenges kept popping up, from project delays like those faced by Canada’s Trans Mountain Expansion Project (TMX) to concerns about excessive nitrogen in Permian natural gas and what eventually evolved into the Biden administration's LNG “pause.”
Friday, 12/29/2023
Think energy markets are getting back to normal? After all, prices have been relatively stable, production is growing at a healthy rate, and infrastructure bottlenecks are front and center again. Just like the good ol’ days, right? Absolutely not. It’s a whole new energy world out there, with unexpected twists and turns around every corner — everything from regional hostilities, renewables subsidies, disruptions at shipping pinch points, pipeline capacity shortfalls and all sorts of other quirky variables. There’s just no way to predict what is going to happen next, right? Nah. All we need to do is stick our collective RBN necks out one more time, peer into our crystal ball, and see what 2024 has in store for us.
Not What I Had in Mind - Are Canadian E&Ps Struggling to Meet the Rising Need for Oil Sands Diluent?
Sunday, 12/11/2022
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.
Tuesday, 1/11/2022
With Alberta’s bitumen production rising to record levels of late, finding more ways to export this molasses-like heavy oil has become more important than ever. In early 2020, Gibson Energy and US Development Group embarked on the construction of a diluent recovery unit in Hardisty, AB, to greatly reduce the need for diluent and retain more of it for reuse. With the unit’s commercial start-up at the end of 2021, another unique pathway for transporting Canadian bitumen to the U.S. Gulf Coast — and, possibly, overseas markets — has become a reality. In today’s RBN blog, we provide an update on this venture and discuss where it might lead next.
Wednesday, 12/16/2020
As bitumen production in Alberta’s oil sands has grown over the past decade, so has demand for diluent, which is blended with molasses-like bitumen to help it flow through pipelines or be transported by rail. With bitumen output expected to continue rising through the first half of the 2020s, we have estimated that Alberta demand for field condensate, natural gasoline and other diluent will increase by more than 40% — to almost 1 MMb/d — by 2025. The catch is, diluent production in Western Canada isn’t growing fast enough to keep pace, and there are limits to how much diluent can be imported on the two existing pipelines from the U.S. What if there were a way to slash how much diluent is needed to put bitumen in rail tank cars — and make rail transport safer in the process? Today, we discuss Gibson Energy and US Development Group’s new diluent recovery unit in Hardisty, AB.
Sunday, 9/27/2020
Canadian gas production in 2019 turned lower for the first time in half a dozen years as very weak benchmark Canadian gas prices led to a sharp reduction in drilling and wellhead shut-ins. This year, higher prices, more drilling, and greater pipeline egress capacity were supposed to set the stage for a return of supply growth. Instead, production volumes have slipped further due to reduced drilling activity and, more recently, a spate of maintenance work. And even if there is some improvement in the next few months, annual average production looks to be on track for a second consecutive decline in 2020. But what about next year? Today, we take a closer look at the recent supply trends and whether there are any signs pointing to a production rebound in 2021.
Tuesday, 7/07/2020
So far, 2020 has been another bad year for bitumen producers in Alberta’s oil sands. For the second year in a row, they have been forced to endure production curtailments, this time in response to COVID impacts on demand and the resulting record-low heavy oil prices. Still, there are at least glimmers of hope that the bitumen market will soon enter at least a modest recovery mode, and that further gains will be possible in 2021 and beyond. Moving all of that bitumen to market in pipelines and in rail cars is going to require even more diluent than the record amounts already consumed in late 2019 and early 2020. Today, we consider the outlook for bitumen production, what that outlook means for future diluent demand, and if that demand can — or cannot — be met by the various sources of diluent supply.
Tuesday, 6/30/2020
Producers in Alberta’s oil sands have been through good times and bad times the past few years. Sure, there’s been a lot of growth in output since 2010. But they’ve also seen wildfires that forced one-third of production offline. And pipeline takeaway constraints that sent prices tumbling and spurred government-imposed production cutbacks. And lately, they’ve been struggling through a global pandemic that slashed crude-oil demand and led to further curtailments. Despite it all, producers and the province of Alberta are hopeful about an oil sands rebound, and shippers are optimistic that they can source an increasing share of the diluent they would need to transport bitumen from Western Canada. There’s good news on that front: there appears to be plenty of diluent pipeline capacity already in place between Alberta’s diluent hubs and its oil sands production areas. Today, we continue our series by exploring the major pipeline systems that distribute diluent supply to the oil sands.
Tuesday, 6/23/2020
The folks who transport bitumen from the Alberta oil sands to faraway markets depend on light hydrocarbons collectively known as diluent to help make highly viscous bitumen flowable enough to be run through pipelines or loaded into rail tank cars. The catch is — or was, we should say — that Western Canada wasn’t producing nearly enough condensate and other diluent to keep pace with fast-rising demand, so a few years ago, two pipelines from Alberta to the U.S. Midwest were repurposed to allow diluent to be piped north. More recently, though, Western Canadian production of diluent has been soaring and new pipeline capacity has been built within Alberta to deliver it to the oil sands. That has the potential to reduce the need for imports from the U.S. and may soon lead to at least one of the import pipes being repurposed yet again. Today, we continue our series on diluent with a review of the pipeline systems that collect locally produced light hydrocarbons that are eventually employed in the oil sands.
Wednesday, 6/10/2020
Bitumen, the heavy, viscous form of crude oil associated with Alberta’s oil sands, has been the workhorse behind Canada’s ascent to near the top of oil-producing nations. However, it is impossible to get raw, near-solid bitumen to refiners by pipeline without either upgrading it to a flowable crude oil or blending it with lighter hydrocarbon liquids, a.k.a. diluents, to form the more diluted version of the product, referred to as “dilbit.” As for moving bitumen by rail, there are two main options: using heated tank cars or blending it with diluent to form “railbit.” The rapid rise in bitumen production in the past decade — interrupted only by wildfires and the recent price crash — has generated a large parallel market for diluents, whose fortunes are closely tied to the oil sands. U.S.-sourced diluent currently meets a substantial portion of the demand. But with Alberta oil sands development poised for renewed growth and in-province condensate production rising, the Canadian diluent market could be in for some big shifts. Today, we start a blog series considering the unique role that this special form of hydrocarbon plays in the oil sands.
Thursday, 6/06/2019
Keyera Corp. and SemCAMS Midstream, two major midstream players in Western Canada, in mid-May announced they are proceeding with the construction of their joint-venture project — a new NGL and condensate pipeline system out of the liquids-rich Montney and Duvernay plays of Alberta. The planned Key Access Pipeline System would provide the first direct competition for the transportation of NGLs and condensate out of these producing regions, currently dominated by Pembina Pipeline Co. Any and all transportation options for the movement of condensate and other NGLs out of the Montney and surrounding plays will likely be welcomed by Western Canadian natural gas producers, who are looking to capitalize on oil-sands producers’ growing demand for homegrown sources of condensate for use as diluent in bitumen transportation. Today, we provide key details about the project and how it fits into the region’s existing condensate/NGLs market.
Thursday, 3/21/2019
Enbridge is taking a serious look at converting its Southern Lights pipeline, which currently transports diluent northwest from Illinois to Alberta, to a 150-Mb/d crude oil pipe that would flow southeast. The potential reversal of Southern Lights is made possible by the facts that Western Canadian production of natural gasoline and condensate — two leading diluents — has been rising fast, and that demand for piped-in diluent from the Lower 48 is on the wane. Alberta producers could sure use more crude pipeline capacity out of the region — and getting crude down to the U.S. Midwest would give them good access to a variety of markets. With Western Canadian diluent production increasing fast, maybe Kinder Morgan’s Cochin Pipeline, another diluent carrier, could also be flipped to crude service later on. Today, we consider how Southern Lights’ conversion/reversal might help.