Tank-to-Tank (TTT) FOB Procedure

Co-payment by buyer and seller of buyer’s tanks. FOB transaction procedure for petroleum products, tank-to-tank within the port.

This procedure arose for two reasons. First. When suppliers bring their resource, for example, to Rotterdam, they discharge it into a common port pipeline system, from which it is pumped to a specific onshore tank. To save time and money, suppliers do not rent tanks at the port, but want to pump oil directly into the buyer’s tanks. Accordingly, they are ready to take over the first 2-3 days of the lease of the customer’s tank while the injection is in progress.

The second reason for this procedure is that due to the proliferation of fake sellers, suppliers in order to prove to the buyer that they are real resource holders, are willing to assume part of the cost of the client to rent tanks.

Risks: Since the supplier bears part of the cost of tank rental, the supplier checks the storage facilities offered by the buyer and chooses the one he likes and is willing to pay for. Very often suppliers impose their trusted storage tanks on their customers, with which the buyers have no previous experience.

Fraud: We have witnessed several times when a supplier imposed his tank farm on a customer, made the first payment to the tank farm, and then the customer paid his part of the tank farm rent. After that the tank farm turned out to be non-existent, and the payments about the alleged first payment to the supplier turned out to be fake. Be careful with oil depots, check the real availability of tanks. There are a lot of fraudsters who charge for the lease of non-existent oil storage tanks in the port.

FOB tank-to-tank (TTT) PROCEDURE:

1. Buyer issues ICPO and Company Registration Certificate or any I.D. With TSA & POF for seller’s approval.
2. Seller issue Draft Commercial Invoice, Buyer signs and returns to Seller.
3. Seller present product SGS Report to Buyer & Buyer’s Tank farm only to verify and confirm product specification, upon confirmation of SGS report by Buyer tank farm storage company, Seller lease and pays the buyer’s tank for 3 days and Buyer do pay his Tank Farm Company for 3 days after his Tank Farm Company has received the payment from Seller Company.
4. Seller provides buyer with PARTIAL POP Documents:
   A. Authority to Sell & Collect (ATSC)
   B. Letter of Commitment to Supply
   C. Product Authentication Certificate
   D. ATV – Authorization For Physical Verification. ATV (Authorization For Physical
   Verification) is to be signed by buyer’s tank farm and Endorsed.
5. Seller provides buyer with COMPLETE FULL POP Documents:
   A. Fresh SGS Report less than 48 hours
   B. Dip Test Authorization-Unconditional
   C. Injection Report
   D. Tank Storage Receipt with GPS Coordinates
   E. Tank Farm Bar-code Information.
   F. Registration Certificate & Export License Copy
   G. Endorsed Injection Schedule by the buyer & buyer Tank Farm
   H. Irrevocable Commitment to Supply for Spot and 12 months Contract Injection Schedule signed by buyer & buyer’s tank farm
6. Buyer conducts Dip-Test in seller’s tank, via SGS on buyer’s cost seller inject the fuel I to buyer’s tank and Buyer makes payment based on Q&Q by MT103 wire transfer / TT according to the final Commercial Invoice.
7. Seller transfers the title of ownership as per Buyer’s instruction. Buyer lifts the product.
8. Seller pays all intermediaries involved in the transaction and subsequently monthly contract shipment continues as per terms and conditions of the sales and purchase agreement contract between buyer and seller.