Commodity Storage - Grains, Crude Oil, Natural Gas

Commodities are stored in different manners. This will mostly depend on the type of commodity, but can also be influenced the transportation method. The commodity itself will however be the primary factor for selecting the most suitable storage method, as there are commodities which need to be protected against weather conditions, deterioration or physical damage.
The different commodities and their storage methods will be discussed separately in the following sections. The manner in which the commodities are loaded on the different transport methods will also be discussed in these sections.


After the harvest, the loose grain is usually stored in large concrete silos, these silos can be linked together using conveyor belts, once linked it is called a grain elevator. The use of concrete makes a silo moisture-resistant and airtight, which better protects the grain. The grain is dumped on the bottom of a silo, this will be done by bucket elevator which transports the grain from a pit to the top of the silo. At this point the grain will be dropped and deposited at the bottom of the silo. Because it is stored in bulk the grain can easily and quickly be loaded onto trucks or trains or in containers. The grain stored in the silos can easily be loaded through spouts at the bottom of the silo. A carrier can be placed under the spout and once it opens, gravity pushes the grain down, due to the weight of all the grain in a silo. Due to the number of separated silos in a grain elevator, it is possible to store different types of grain.

Crude oil

The commodity storage and transportation of crude oil consist of a number of different carriers. Once the oil is drilled it will need to be transported to refineries because crude oil must be refined for it to be useful to consumers. It will either be transported directly to the refineries but may also be stored first in tanks. These tanks are usually large cylinder shaped constructions, capable of containing a huge quantity of liquids. Crude oil is commonly stored in tanks with a floating roof. This roofs float on the surface of the of the oil inside the tank and thus changes along with the content level of the tank. The use of a floating roof ensures there is limited vapor space. Because there is limited vapor space the loss due to evaporation is significantly limited, also the risk for internal explosions is limited. Once the content level reaches a certain low the so-called foots of the roof will hit the floor and the roof will no longer drop and thus vapor space will develop.

Oil companies may also store the crude oil at sea. In such a scenario the crude oil will be stored in very large crude carriers, which are enormous ships capable of carrying up to two million barrels of crude oil. These shipped loaded with the oil are kept off the coast in the vessels to be able to take advantage of more favorable prices in the future.

The oil is usually transported from a field gathering system through pipelines to these storage tanks. From here on out the pipelines will either transport it further along to refineries or tanker loading stations. Pipelines are capable of transporting different types of crude oil, but must be carefully managed to ensure the correct oil is delivered at the correct location. The storage facilities are located alongside the pipelines, to increase the efficiency at which the oil is transported from one location to the other.

Natural gas

The commodity storage of natural gas is very important, due to the seasonal demand of this commodity. The production however cannot be adjusted to meet these different levels of demand. Therefore the gas will be stored during the low-demand months, in order to be able to meet the demand during peak-months. Natural gas is most commonly transported by use of pipelines from gathering fields to distributions centers. Therefore storage facilities will usually be constructed near existing pipelines to reduce construction costs and increase the efficiency. There are a number of methods for storing natural gas.

The most common method for storing natural gas is in depleted oil or gas fields. This is a favorable method for gas storing due to a number of factors. First off all the facilities used to extract the natural gas are all still in place and with modifications can be re-used to now store the natural gas in the depleted gas fields. Furthermore the information gathered during the extraction, regarding the geographical characteristics, are already available, which makes it even more favorable to use depleted gas fields. Finally, other reservoirs require an amount of gas to be used as a cushion. A portion of this gas will eventually be unrecoverable and thus lost. The use of a depleted field eliminates this loss because the natural formation of the field makes the use of cushion gas redundant.

A different storage method is by using aquifers. These are underground water reservoirs. Which may be used as a gas storage facility. This kind of gas storage is more expensive because the research and installation of all the required facilities must be created from scratch, in comparison to depleted fields where the facilities can be re-used with some modifications. This type of storage also requires a significant amount of gas to be used as a cushion, which consequently generates a risk of losing a portion of this cushion.

Another method of storing natural gas are salt caverns. The salt caverns are useful as they have strong walls which are very capable of detaining the gas inside the cavern. Salt caverns are usually the smallest type of gas storage, but have an advantage as the withdrawal and replenishment rate is higher than the other storage types. Similar to aquifers, the initial costs of setting up a salt cavern storage facility is more expensive than using depleted fields.