Commercial
Choosing an LPG Storage Partner
Capacity, location and delivery record matter more than headline tonnage. A checklist for operators and distributors evaluating storage providers.
Motunrayo AdeogunWhen a distributor needs storage capacity, the decision usually comes down to a small number of questions. How much can you hold? How close is it to where I sell? And can you prove you have built and run this before?
Capacity is the starting point but not the deciding one. A large tank that is far from your customers is expensive to serve, because you still pay for road transport on every delivery. Storage sited between production and demand reduces the distance gas travels on a truck, which is where most of the delivered cost sits.
Delivery record is where due diligence earns its keep. Ask for completed terminal projects, get references from operators who are using the facility now, and confirm what happens to your supply if the terminal has an unplanned outage. Bulk storage is valuable precisely because it is a buffer, and it stops being a buffer if the operator cannot manage continuity.
Finally, confirm the commercial terms against delivered cost rather than storage rate. Storage rate is the visible number, but access, handling, minimum lift and distance charges often decide the total. Model the delivered cost per tonne to your customer before signing.
Questions on this topic
Quick answers to the follow-up questions clients raise most.
How do I calculate delivered LPG cost?
Delivered cost is the storage or wholesale rate plus all charges between the terminal and your customer: haulage, distance and access fees, handling, and any minimum lift requirements. Divide the total by tonnes delivered to get a cost per tonne, then compare that figure across providers rather than comparing headline storage rates.
How much storage capacity does a distributor typically need?
It depends on consumption volume, delivery frequency and how much interruption risk you want to carry. Larger distributors with daily lift volumes need capacity measured in thousands of tonnes to hold a meaningful buffer, while smaller retailers typically draw from distributors rather than holding bulk inventory themselves.
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