Tank to Vessel FOB Procedure for Fuel Delivery Step by Step
- Jose Pagan
- 6 days ago
- 11 min read
Tank to vessel fuel delivery can move fast once the documents are in order, but one missing endorsement or unverifiable bank message can stop the transaction at the terminal gate. In FOB delivery, the seller makes the product available at the loading point, while the buyer controls the vessel, logistics, inspection team, and onward freight.
This guide explains the tank to vessel FOB procedure in a practical step-by-step format, from ICPO submission to dip test, injection, final payment, intermediary payment, and long-term supply contract signing.
The process below is written for general commercial understanding only. Fuel trading, banking instruments, and international shipping involve legal, financial, sanctions, and compliance risk. Each party should use qualified legal counsel, bank officers, licensed inspectors, and verified logistics providers before committing funds or vessel capacity.
What FOB tank to vessel delivery means
FOB means Free on Board. In a fuel transaction, this usually means the seller delivers the product to the designated loading point, and the buyer takes responsibility once the product passes the agreed transfer point, often during or after injection into the buyer’s nominated vessel.
Tank to vessel delivery is different from tank to tank delivery. In tank to tank, product moves from one storage tank to another. In tank to vessel, product moves from a shore tank, refinery tank, or terminal storage facility into the buyer’s vessel.
The structure matters because it affects:
Who hires and pays for the vessel
Who arranges inspection
Who coordinates terminal access
When title transfers
When payment becomes due
Which documents prove product availability and ownership
A clean transaction needs clear timing. The buyer should not send payment before the agreed verification and inspection steps. The seller should not inject product without vessel readiness, terminal clearance, and documentary control.
Key parties in the procedure
A standard FOB tank to vessel transaction may involve several parties. Each one has a defined role.
Party | Main role |
Buyer | Issues ICPO, signs documents, arranges logistics, provides bank comfort, pays for product |
Seller | Processes ICPO, issues CI, coordinates refinery documents, releases authorization and POP |
Refinery or allocation holder | Confirms product availability and supports supply documents |
Buyer logistics company | Endorses the tank to vessel injection arrangement and coordinates vessel operations |
Vessel owner or charterer | Provides vessel details, often through Q88 |
Inspection company | Conducts dip test and quality or quantity checks |
Bank | Issues or verifies MT199, BCL, or other agreed payment-related messages |
Intermediaries | Receive commission after seller receives full payment, subject to NCNDA/IMFPA or agreed commission documents |
The exact names and document titles can vary by jurisdiction, refinery, terminal, and banking practice. The safest approach is to define every document in the contract before any party starts acting on the procedure.
Step 1. Buyer issues the ICPO
The transaction begins when the buyer issues an Irrevocable Corporate Purchase Order, known as an ICPO. This document states the buyer’s intent to purchase the fuel under defined terms.
A useful ICPO should include:
Product name and grade
Quantity required
Delivery term, such as FOB
Loading port or terminal preference, if known
Target lifting schedule
Price formula or fixed price reference
Buyer company information
Buyer representative contact details
Banking coordinates, if required
Confirmation that the buyer can perform financially and logistically
The ICPO should be signed by an authorized signatory. The buyer should avoid vague wording because the seller and refinery need enough information to decide whether the request is workable.
Step 2. Seller processes the ICPO and releases the commercial invoice
After receiving the ICPO, the seller reviews the buyer’s request. This review may include product availability, compliance screening, buyer profile, requested quantity, shipping readiness, and whether the procedure matches the seller’s approved process.
If the ICPO is accepted, the seller or seller refinery releases the Commercial Invoice, often called the CI, within 48 hours.
The CI usually confirms:
Product description
Quantity
Unit price
Total contract value
Delivery term
Loading point
Payment method
Validity period
Seller bank details, where appropriate
Required signatures and company seals
The 48-hour timing is often used as a commercial benchmark, but the actual timing depends on compliance review, refinery approval, weekends, holidays, and document readiness.
Step 3. Buyer signs the CI and returns it with verifiable CPA
The buyer signs the commercial invoice and returns it to the seller. At this stage, the buyer may also provide a verifiable CPA, commonly understood in this context as a Charter Party Agreement or related vessel charter proof.
The purpose of the CPA is to show that the buyer has real shipping capacity. Since FOB delivery depends on the buyer’s vessel, the seller needs confidence that the buyer can bring a suitable vessel to the loading point.
A verifiable CPA should align with the transaction details:
Vessel availability should match the expected loading window
Vessel capacity should match the cargo quantity
Loading port terms should not conflict with the seller’s terminal
Charterer details should match the buyer or buyer’s appointed logistics company
Contact and verification channels should be real and traceable
A seller should verify the CPA through legitimate channels, not through email addresses that cannot be connected to the vessel owner, broker, or chartering party.
Step 4. Seller issues the TTVIA for endorsement
Next, the seller issues the Tank to Vessel Injection Agreement, often shortened to TTVIA. This document sets the basis for moving fuel from the seller’s tank or refinery storage into the buyer’s nominated vessel.
The TTVIA should be endorsed by:
The buyer’s logistics company
The seller
Any other party required by the terminal or refinery procedure
The endorsement matters because it confirms that both commercial and operational sides understand the injection plan. It should identify the product, quantity, tank or terminal reference, buyer vessel details when available, and the party responsible for logistics coordination.
A strong TTVIA also addresses practical points such as inspection access, terminal rules, safety requirements, and communication channels during injection.
Step 5. Seller refinery issues PPOP documents
After the TTVIA is properly endorsed, the seller refinery issues the Preliminary Proof of Product, known as PPOP. PPOP does not replace final proof after injection, but it gives the buyer early documentary support that the product exists and can be supplied under the agreed procedure.
The PPOP package commonly includes four documents.
PPOP document | What it supports |
Product quality passport | Shows product quality information based on available refinery or terminal records |
Certificate of origin | Identifies the country or source origin of the product |
Commitment to supply | Confirms the seller or refinery commitment to supply under the agreed terms |
Statement of product availability | States that product is available for the transaction, subject to procedure and verification |
The buyer should review these documents carefully. Names, dates, product grade, quantity, and issuing authority should match the commercial invoice and TTVIA. Any mismatch should be corrected before moving to banking verification.
Step 6. Buyer provides MT199 or BCL with authorization to verify
The buyer then provides either an MT199 or a Bank Comfort Letter, commonly called a BCL, along with an Authorization to Verify, known as ATV.
An MT199 is a structured SWIFT message used by banks for free-format communication. A BCL is a bank letter that indicates the buyer has financial capacity or banking support for the transaction. Neither should be treated casually. The seller must verify the message through proper bank-to-bank channels.
The ATV is important because it gives the seller permission to verify the buyer’s bank message or comfort letter. Without authorization, a bank may refuse to confirm details.
At this point, both parties should watch for red flags:
Bank messages sent only as editable PDFs
Refusal to allow bank-to-bank verification
Pressure to skip inspection
Vessel documents that cannot be traced
Unusual requests for upfront fees outside the signed procedure
Different company names across ICPO, CI, CPA, and bank documents
Verification protects both sides. It helps the seller avoid non-performing buyers and helps the buyer avoid paper-only sellers.
Step 7. Seller issues authorization to conduct dip test
Once the buyer’s bank comfort or MT199 has been verified, the seller issues the Authorization to Conduct Dip Test. This authorization allows the buyer or buyer’s approved representatives to inspect the product at the designated tank, terminal, or refinery storage location.
The authorization should be specific. It should state who can attend, where the inspection will take place, what product and tank are involved, and the inspection window.
The buyer should not send an inspection team without written authorization. Terminals operate under strict safety and access rules, and unauthorized visitors will usually be denied entry.
Step 8. Buyer conducts dip test with hired SGS team
After receiving dip test authorization, the buyer or buyer’s representatives attend the terminal with the buyer-hired inspection team. SGS is often named, but other internationally recognized inspection companies may also be used if accepted by both parties.
The cost of the dip test is borne by the buyer under this procedure.
A dip test normally checks quantity and may support quality confirmation through sampling and laboratory analysis. The specific scope depends on the inspection order and terminal rules.
The buyer should arrange:
Inspector appointment
Terminal access documents
Safety requirements
Sampling containers
Chain of custody records
Written inspection report
Coordination with seller or terminal representative
The best practice is to define the inspection scope before the team arrives. If the buyer expects both quality and quantity confirmation, the inspection request should say so clearly.
Step 9. Seller refinery issues Notice of Readiness and requests Q88
After a successful dip test, the seller refinery issues a Notice of Readiness, known as NOR. The NOR tells the buyer that the product and loading arrangement are ready to proceed under the agreed procedure.
At this stage, the seller asks the buyer’s shipping company for the Q88. Q88 is a vessel questionnaire widely used in tanker shipping. It provides technical and operating details about the vessel.
The Q88 may include information such as:
Vessel name and IMO number
Flag and classification society
Deadweight and cargo capacity
Tank coating and cargo tank details
Manifold information
Pumping and loading rates
Previous cargo information
Certificates and compliance details
The seller, refinery, and terminal need vessel details because not every vessel can load every product at every terminal. The vessel must be suitable, compliant, and available within the lifting window.
Step 10. Product is injected into the buyer’s vessel
Once the vessel is accepted and terminal clearance is complete, injection can begin. This is the operational stage where the fuel moves from tank to vessel.
Before injection, the parties should confirm:
Vessel is berthed or approved for loading
Terminal clearance is granted
Safety meeting or required terminal briefing is complete
Hoses, loading arms, manifolds, and seals are checked
Product line and tank reference are confirmed
Inspection attendance is arranged, if required
Loading sequence and communication signals are understood
During injection, quantity records, meter readings, samples, and loading logs should be maintained. Any stoppage, discrepancy, or safety issue should be recorded immediately.
This stage requires close coordination. A commercial mistake can be expensive, but an operational mistake can create safety, environmental, and legal consequences.
Step 11. Seller issues final POP documents after successful injection
After successful injection, the seller issues the final Proof of Product, known as POP. This confirms that the product was transferred according to the agreed process and supports payment and title documentation.
Under the stated procedure, the seller issues:
POP document | Purpose |
Allocation license | Supports the allocation or right to supply the cargo |
Title ownership transfer affidavit | Supports the transfer of title from seller to buyer |
Tax registration certificate | Supports seller or transaction tax registration status where applicable |
Depending on the terminal, product, and jurisdiction, additional documents may also be involved, such as a bill of lading, cargo manifest, certificate of quantity, certificate of quality, ullage report, or customs-related documents. These should be listed in the contract if required.
The title transfer document is especially important. It should match the payment condition, cargo description, quantity, and parties in the commercial invoice.
Step 12. Buyer pays 100 percent by MT103 or TT within 72 working hours
Once the final POP is issued under the agreed terms, the buyer makes 100 percent payment for the fuel to the seller. The procedure states that payment is made by MT103/TT within 72 working hours.
MT103 is the SWIFT message type commonly used for customer credit transfers. TT means telegraphic transfer or wire transfer. The buyer’s bank should follow the payment instructions stated in the signed commercial invoice or contract.
The 72-working-hour payment window should be treated as a binding commercial deadline if accepted in the signed documents. Late payment can create disputes over title, demurrage, vessel delay, and contract default.
Both parties should confirm:
Correct beneficiary name
Correct bank account
Payment currency
Invoice number
Cargo reference
Any bank charges
Proof of payment format
Confirmation route after funds are sent
No party should rely on screenshots alone as final proof of payment. Bank confirmation should come through proper banking channels.
Step 13. Seller pays intermediaries after receiving full payment
After the seller receives 100 percent payment, all intermediaries are paid by the seller according to the agreed commission structure. This is usually controlled by an NCNDA, IMFPA, commission agreement, or other signed paymaster arrangement.
The commission payment terms should be clear before the transaction starts. Intermediaries should not rely on verbal promises. The agreement should state commission amount, payment timing, paymaster details, beneficiary details, and whether commissions apply only to the first lift or also to future deliveries.
Commission documents should not interfere with cargo operations. The buyer and seller’s main obligations are product delivery, accepted documents, and payment.
Step 14. Seller and buyer sign a one-year delivery contract
Once the spot transaction is completed and both parties perform successfully, the seller and buyer can sign a one-year delivery contract. This longer contract may cover monthly shipments, rolling liftings, or another agreed delivery schedule.
A one-year contract should define:
Monthly quantity
Product specifications
Delivery port or FOB terminal
Pricing formula
Payment terms
Inspection process
Vessel nomination process
Laycan and loading schedule
Documents for each shipment
Force majeure terms
Default and dispute resolution
Commission terms for repeat deliveries
A trial lift is often used to prove that the seller can supply, the buyer can pay, and the logistics chain works. A one-year contract should not be rushed until the first delivery confirms performance on both sides.
Practical checklist before starting
Before any buyer or seller enters this process, the transaction file should be organized and consistent. A clean file reduces delays and helps the bank, terminal, shipping company, and inspection team do their work.
Use this checklist before moving beyond the ICPO stage:
Company registration documents are current
Signatories are authorized
ICPO, CI, and TTVIA match
CPA or vessel charter proof is verifiable
PPOP documents match product and quantity
MT199 or BCL can be verified bank to bank
ATV is signed correctly
Dip test authorization names the correct tank and attendees
Inspection company is accepted by both parties
Q88 is available for the nominated vessel
POP document list is agreed in writing
Payment deadline and method are clear
Intermediary commission terms are signed
The main goal is simple: every document should support the same transaction. If the product name, quantity, loading point, buyer name, or seller name changes from one document to another, pause and correct it.
Common mistakes to avoid
Many FOB fuel deals fail because the parties move too quickly through the early steps. The procedure is not just paperwork. Each document unlocks the next action.
Common mistakes include accepting an ICPO without checking buyer authority, issuing a CI with unclear validity, treating PPOP as final proof, sending inspectors before terminal authorization, nominating a vessel without Q88, or arguing about commission after payment.
The most serious mistake is skipping verification. Bank comfort, product availability, vessel readiness, and ownership claims must be checked through reliable channels. A professional transaction does not depend on pressure, urgency, or informal assurances.
The main takeaway
A successful tank to vessel FOB delivery follows a clear order: ICPO, commercial invoice, signed CI with verifiable CPA, TTVIA endorsement, PPOP, bank comfort with ATV, dip test authorization, buyer-paid inspection, NOR and Q88, injection, final POP, full MT103/TT payment, intermediary payment, and then the one-year delivery contract.
When each step is documented, verified, and matched to the same cargo, the process becomes easier to manage. The buyer gains inspection confidence before payment, the seller gains proof of buyer capacity before releasing operational access, and both sides reduce the risk of delays at the terminal.
Buy Fuel Through a Secure Tank-to-Vessel FOB Transaction
Nationwide Brokerage Group Inc. connects qualified buyers with verified refinery suppliers offering Tank-to-Vessel (TTV) FOB fuel transactions at major international storage terminals. Our network supports the procurement of refined petroleum products through established commercial procedures, independent inspection services, and professional transaction management.
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