Nuvista Energy Ltd T.NVA

Condensate

[Sugaree]

HoneyPot,

 

Question regarding condensate. Nuvista produces a tonne of it and we know it is in high demand as a diluent for the heavy oil in pipelines. In fact, western Canada doesn't even come close to producing enough required and thus a lot has to be imported from US. Condensate sells at a premium 

to WTI, I believe by a few bucks, whereas WCS sells at a significant discount.

 

So, when the TMX expansion comes online in late Q1, all the talk is how the WCS differential will narrow quite a bit and should not see spikes in the past due to egress. That is great, but I have heard nothing about the need for a heck of a lot more condensate. I would think there is a need for a lot more condensate and the price should find a higher premium. Where is all this condensate going to come from, or am i missing something?

 

Thoughts on this topic?

[MyHoneyPot]

Your 100% right, and with WCS differential narrowing, the requirement for condensate will increase and it will create big demand. The Transmountain represent 590,000 boe/day of increased transportation capacity. There should be a demand for heavy and not at WTI prices, they will get Brent based Pricing on the west coast.  in 2023 we should see a increase in condensate prices, which may