What are Salt Caverns?

The world’s oil storage tanks are overflowing at the moment, with companies vying to extract as much crude as possible. However according to the experts, there is still plenty of space to store crude in the form of salt caverns. But what exactly does the term ‘salt cavern’ refer to and why is it becoming so popular? Read on as we take a closer look at the concept, and why they’re so in demand.

Salt caverns explained

Salt caverns are hollowed out grottos leached out of the deep, dense layers of rock salt. To create the caverns water is injected into the rock to dissolve the salt. This is then extracted in the form of brine. When the caverns have been hollowed out crude oil can then be pumped into them and stored. As the caverns are impermeable and non-porous, these caverns are remarkably waterproof.

Cashing in on the crude excess

According to Rob Nijst, chief executive officer of VTTI, the collapse in the price of crude has hit oil companies hard. That said, the demand for oil storage is still booming which means both producers and traders are fighting it out to rent space. Meanwhile investors are snapping up real estate as fast as they can in a bid to capitalise on the market conditions.

"There is a lot of capacity but there is also a lot of demand," he explains. Given that VTTI is co-owned by Vitol, the world's largest oil trader, Nijst’s opinions are highly valid. "Everyone wants more storage volumes at the moment," he adds.

In the wake of instable oil prices trading houses such as Vitol, Trafigura, Mercuria, Royal Dutch Shell and BP are capitalising on opportunities to make extra cash via salt cavern storage ventures. Singapore, South Africa’s Saldanha Bay and northwest Europe are key storage hubs, with salt cavern locations rapidly filling up over the past 12 months.

Interested in knowing more about where the world’s oil is stored. In the article ‘Optimising Level Measurement Performance in Underground Tank Installations’ readers are introduced to the benefits of underground storage tanks, such as insulation from low ambient temperatures. However this goes hand in hand with a myriad of problems, including condensation, ice formation and low viscosity. Ingemar Serneby, Senior Application Specialist at Emerson Process Management is on hand to explain how the correct selection and installation of radar devices can minimise these issues and ensure the most accurate measurements.