TTT and Tank Farm Procedures
Our refinery prefers to transact on TTT (Tank to Tank) procedures, where the refinery is using their own capital to split the costs of the Tank Storage/TSA with the buyer. The refinery has found that this is best way to transact because it shows the financial ability of the buyer to transact, and the commitment of the refinery to deliver, as the refinery will invest their own capital to facilitate the transaction.
Buyer Secures TSA with Tank Farm
A TSA costs $0 to set up, and payment is only supplied when the buyer and seller decide to use the tank for the transaction. TSA’s usually have a one-year period/window where the buyer can use the tank farms tank storage to facilitate a transaction (e.g., April 2025-April 2026).
Seller and Buyer Share The Cost
In the procedure, the Seller pays the first two days of the tank storage costs (48 hours) and the Buyer pays the last three (3) days of the Tank storage costs. Typical costs to rent a tank storage are between $50,000-$70,000 per day depending on the Tank Storage Farm the buyer decides to work with. Between the payment collection from both parties, SGS report, injection process and transfer of the title of ownership, etc.. the Tank Storage process typically takes 5 days.
Tank Farm Confirms Payment and Receives TSR
Once both parties have paid their Tanks Storage costs, and the Tank farm confirms payment has been made, the buyer will receive a TSR (tank storage receipt).
Provided payment from both parties is complete, then our seller will have representation at the port in Rotterdam for the buyer to meet to conduct Dip test and buyers SGS report. This SGS report will be generated in no less than 48hrs and the process of transferring the fuel to the buyer begins, once satisfied with the SGS report.
Typically, in Tank Storage Agreements, most tank farms will provide a full refund if a transaction is canceled, however, some may enforce small penalty charges for cancelled transactions.
Summary of TTT
To summarize, the TTT procedure is the safest for both the buyer and the seller, as it equally splits the financial risk of transacting between the seller and the buyer. The seller showcases their seriousness about delivering by paying the first two days of the tank farm (which can amount to $140,000+), and the buyer showcases their financial ability to transact by paying for the last 3 days of the tank storage process.
TTT-TANK TO TANK FOB TRANSACTION PROCEDURE
1. Buyer issues ICPO and Company Registration Certificate or any I.D. With TSA for Seller’s Verification.
2. Seller issue Draft Commercial Invoice, Buyer signs and returns to Seller with his Tank Storage Agreement.
3. Seller pays the Buyer’s tank for 2 days for the Injection Process; Buyer pays 3 days and POP will be provided only after Buyer’s Tank Farm Company has received the payment from both the Seller and the Buyer Company. Seller issue NCNDA (Non-Circumvention Non-Disclosure Agreement)/IMFPA (Irrevocable Master Fee Protection Agreement) to the intermediary to sign.
4. Seller provides Buyer with Full POP Documents:
A. Fresh SGS Report less than 48 hours
B. Product certificate of origin.
C. Dip Test Authorization-Unconditional
D. Injection Report
E. Tank Storage Receipt with GPS Coordinates
F. Tank Farm Bar-code Information
G. Letter of Commitment to Supply
H. Registration Certificate &Export License Copy
I. Authority to Sell & Collect (ATSC)
J. Endorsed Injection Schedule by the buyer and buyer Tank Farm
K. ATV – For Physical Verification.
L. Irrevocable Commitment
All new orders to their refinery are allocated to specific customers, our refinery does not want to risk producing EN590, ship it to a port to find out the Buyer is not able to transact. Another consideration was that the Exit for the Buyer might already have tank farms available in the area to accommodate the transaction.