Abstract A large fraction of the physical model tests of the VAPEX process reported in the literature have been conducted without any connate water in the system. The absence of connate water was rationalized by suggesting that it has little or no influence on relative permeability of oil and since the vapourized solvent does not dissolve in water, there is no effect of water on the mass transfer process. However, this ignores the possible contribution of oil spreading at the gas-water interface to the mass transfer and the contribution of film drainage to oil relative permeability at low oil saturation. We have evaluated the effect of connate water on VAPEX performance using physical model experiments carried out in a visual model with different connate water saturations. Butane was used as the solvent and Ottawa sand was used for packing the model to obtain permeability and capillary pressure values comparable to field conditions. In addition to the visual observations of the size and shape of the vapour chamber, the rates of oil and gas production were monitored during the experiments. The results show that connate water has a measurable effect on the process, both in terms of the shape of the vapour chamber and the drainage rate of the diluted oil. The presence of connate water causes faster spreading of the vapour chamber in the lateral direction and tends to increase the thickness of the mixing zone. This increase in the mixing zone thickness appears to result from capillarity driven fingering phenomenon. The mixing zone had a distinct uneven appearance that was similar to patterns generated by frontal instabilities in miscible displacements. The effect of connate water on the drainage rate was an increase in the initial rate, but a reduction in the rate, subsequently. The presence of mobile water speeds up the communication between the two wells and leads to even faster spreading of the vapour chamber. Introduction Although several successful SAGD and CSS field projects have been reported, the high cost of steam generation, considerable energy loss, need for water and water treatment(1) are some of the problems which necessitate finding a more effective and environmentally friendly recovery method. Meanwhile, solvent-based processes, like VAPEX, have drawn more attention due to their potential advantages. In this process, vapourized light hydrocarbons, like propane and butane or a mixture of these with carrier gases, are used. VAPEX is a solvent analogue of the SAGD process and uses essentially the same well configuration(1). Solvent dissolves into the bitumen and reduces its viscosity through dilution, swelling and de-asphalting mechanisms(2). It has been noted that vapourized rather than liquid solvents produce a higher driving force for gravity drainage due to a higher density difference between bitumen and solvent(3). The optimum pressure for solvent injection is near its dew point pressure where the solvent solubility in the oil is high. The role of carrier gas is to keep the injected solvent in the vapour phase at the operating pressure.