In the paper an approach to simulation of air bubbles behavior in dense slurry flowing in a pipeline is explored. It is based on establishing a relationship between the flow dissipation energy rate and the collisional dynamics of solid particles. This problem is important in hydrotransport technology of bitumen extraction from the oil sands. The dynamics of air bubbles distributed in slurry is investigated based on two models: a model of turbulence and a model describing particles collisional motion. The rate of air bubbles break-up as well as that of coalescence are estimated. The main parameters governing the bubbles break-up and coalescence are discussed. (C) 2003 Elsevier B.V. All rights reserved.