An Unconditional Dip Test Authorization (UDTA) letter is a critical document in oil trading, granting a buyer or their representative (e.g., an inspection agency like SGS) permission to conduct a dip test to verify the quality and quantity of oil in a seller’s storage tank without preconditions such as payment or additional approvals. Below are the key instructions and elements that should be included in a UDTA letter, based on standard practices in the oil and gas industry:
Instructions to Include in a UDTA Letter
- Letterhead:
- The UDTA should be on the seller’s or tank leaseholder’s official letterhead, including the company’s name, logo, address, and contact details.
- Tank Leaseholder Details:
- Clearly state the name and details of the tank leaseholder or titleholder of the product, confirming their authority over the tanks and the product.
- Recipient Information:
- Address the letter to the buyer or their designated representative (e.g., SGS or another inspection agency). Include the buyer’s corporate details, such as company name and address.
- Subject Line:
- Include a clear subject line, such as “Unconditional Dip Test Authorization Letter” or “Authorization for Dip Test on Storage Tanks.”
- Tank and Product Details:
- Specify the tank reference code numbers, location (e.g., Rotterdam, Houston), and product details (e.g., type of oil, such as EN590 or JP54).
- Include relevant documentation references, such as tank storage receipts (TSR) or product passport details, if applicable.
- Authorization Statement:
- Explicitly state that the tank leaseholder grants unconditional permission to the buyer or their representative to conduct a dip test on the specified tanks. The term “unconditional” should be emphasized to indicate no preconditions (e.g., payment or additional approvals) are required for the test.
- Example: “We, [Tank Leaseholder], the official leaseholder of the tanks with reference code number(s) [Tank Numbers], hereby grant unconditional permission to [Buyer’s Name] and/or their respective assigns or inspectors to conduct a dip test on each tank.”
- Scope of the Dip Test:
- Outline the purpose of the dip test, which is to verify the quality and quantity (Q&Q) of the product in the tanks.
- Mention that the test will be conducted by a reputable inspection agency (e.g., SGS) using standardized methods (e.g., manual dipping or automated sampling).
- Tank Farm Cooperation:
- Request that the tank farm control tower or terminal operator cooperate fully with the buyer’s representatives to ensure prompt completion of the dip test.
- Example: “The Tank Farm Control Tower is hereby requested to extend full cooperation to [Buyer’s Name or Inspection Agency] to complete the test in a prompt manner.”
- Effective Date and Duration:
- Specify the effective date of the authorization and its validity period (e.g., “This permission is effective immediately and lasts until [Date].”).
- Ensure the duration aligns with the agreed timeline for the dip test.
- Supporting Documents:
- Note that a copy of the UDTA has been provided to the tank farm control tower or terminal operator for reference.
- Optionally, mention accompanying documents, such as a fresh SGS report, tank storage receipt (TSR), or authorization to verify (ATV), if applicable.
- Signatures and Notarization:
- The letter should be signed by an authorized representative of the tank leaseholder or seller.
- Include the signatory’s name, title, and contact information.
- Depending on the transaction requirements, the letter may need to be notarized to confirm its authenticity.
- Additional Notes (Optional):
- Clarify that the dip test is at the buyer’s expense, if applicable.
- Mention compliance with terminal or port regulations (e.g., Rotterdam’s post-2018 rules requiring a Tank Storage Agreement in some cases).
- Quotation from appointed Inspection agecy
Buyer must collect a quotation letter from the inspection agency which will conduct the DIP test.
SAMPLE OF UDTA LETTER
[Seller/Tank Leaseholder Letterhead] [Date]
To: [Buyer’s Company Name] [Buyer’s Address]
Subject: Unconditional Dip Test Authorization Letter
Dear [Buyer’s Name or Inspection Agency],
We, [Tank Leaseholder/Seller Name], the official leaseholder of the tanks and titleholder of the product with the following reference code number(s): [Tank Numbers], located at [Tank Farm Location, e.g., Vopak Horyzon Terminal/] Fujairah, hereby grant unconditional permission to [Buyer’s Name] and/or their designated representatives, including [Inspection Agency, e.g., SGS], to conduct a dip test to verify the quality and quantity of [Product Type, e.g., EN590 Diesel] in the specified tanks.
This authorization is effective immediately and remains valid until [Specific Date, e.g., DD/MM/YYYY]. The dip test shall be conducted at the buyer’s expense using standardized methods to ensure compliance with the Sales Purchase Agreement (SPA) dated [SPA Date].
A copy of this authorization has been provided to the Tank Farm Control Tower at [Tank Farm Name]. We request their full cooperation to facilitate prompt completion of the dip test.
For reference, the following details are provided:
-
- Location of Tank: TBA
- Tank Numbers: TBA
- Port location: Fujairah, UAE
- Product: TBA
- Tank Storage Receipt (TSR) Reference: TBA
- Coordinates: TBA
- Pipeline Code: TBA
- Fuel Transmission Code: NL18852105
- Port Terminal Access Code: TBA
- HUB No: TBA
- IAC Code: TBA
- SGSIN GISIS Code: SGSI-0031
- Tank Reservation ID: TBA
- Tank Location Number: TBA
(A) Contact for Tank Farm:
Email: TBA
Phone: TBA
represented by TBA /Tel: TBA, website: TBA
(B) Tank Leaseholder Company Name: TBA
Address: TBA
Authorized Signatory: TBA
Should you require further information, please contact [Seller’s Contact Name, Title, Phone, Email].
Sincerely, [Authorized Signatory’s Full Name] [Title] [Seller/Tank Leaseholder Company Name] [Contact Information]
[Notary Seal, if required]
