Diluent is just a median to reduce viscosity of the "tar" sand bitumen so it can be handled, pumped transported delivered to a buyer! It is like if you have a product to sell and need a container to ship it in. You buy a box and hopefully mark up the cost of the box in your price! There has to be a cost associated with separating the two again! I wasn't aware of it being used in the steam condensate/bitumen separation as 2 Crude has stated. He is in the business and I trust his knowledge. As far as transporting the bitumen, it reduces viscosity so it can be shipped easily!