Trading Process

International Petroleum Trading Procedures

TSJ Holdings: Trading Process Overview

At TSJ Holdings ("TSJ"), we believe successful trade is built on clarity, transparency, and a shared commitment to real commercial standards. To help our prospective partners understand how we operate, we provide an overview of the procedures that guide petroleum transactions conducted directly between buyers and TSJ.

Our processes reflect the standard practices followed by major trading houses and refiners, including the banking requirements, inspection protocols, and shipment standards that govern refined fuel contracts under FOB and CIF terms. This includes how and when Proof of Product (POP) is issued, how Documentary Letters of Credit (DLC) or Standby Letters of Credit (SBLC) are used, and when performance documentation becomes available.

Framework Purpose

This framework is designed to establish mutual understanding and realistic expectations between TSJ Holdings and our counterparties, ensuring all parties operate under recognized international trade standards.

Quick Navigation

Contact Trading Desk

trading@tsj-holdings.com

info@tsj-holdings.com

Key Principles of Our Trading Framework

Direct buyer-seller relationship

Direct Buyer-Seller Relationship

All transactions are conducted directly between the buyer and TSJ Holdings. We do not work through extended chains of intermediaries or unverified mandates.

Real commercial standards

Real Commercial Standards

Our procedures follow industry-standard practices used by major international trading houses, refiners, and financial institutions in the global petroleum trade.

Transparency and clarity

Transparency & Clarity

We provide clear documentation of all procedures, requirements, and timelines to ensure mutual understanding and realistic expectations from the outset.

Banking compliance

Banking Compliance

All payment instruments must comply with international banking standards and are subject to verification by top-tier financial institutions.

Proof of Product (POP) Issuance

Understanding POP Documentation

Proof of Product (POP) is a critical component of international petroleum transactions. At TSJ Holdings, we follow standard industry practices for POP issuance to ensure legitimate, verifiable transactions.

Important Notice

POP is NOT issued upfront before contracts are signed. In the legitimate petroleum trading industry, comprehensive proof of product availability comes after contractual commitment and financial verification.

Standard POP Issuance Timeline

1

Initial Engagement

Before Contract

TSJ provides product specifications, general availability information, and trading terms. This establishes basic capability but is not full POP.

2

Contract Execution

Contract Phase

After mutual due diligence (KYC/KYB), parties sign a Sales Purchase Agreement (SPA) outlining terms, quantities, delivery schedules, and payment structures.

3

Financial Instrument

Banking Verification

The buyer establishes a Documentary Letter of Credit (DLC) or Standby Letter of Credit (SBLC). This instrument is verified by the seller's bank.

4

POP Provision

Full Documentation

Once payment security is confirmed, TSJ provides comprehensive proof of product including tank tickets, allocation letters, injection reports, or vessel nomination details.

Types of POP Documentation

Tank Storage Tickets

Tank Storage Tickets (TST)

For FOB transactions, TSTs provide evidence that refined products are in storage at the loading terminal, showing volumes, specifications, and availability for loading.

Allocation Letters

Allocation Letters

Official documents from refineries or terminal operators confirming that specific product volumes have been allocated for the buyer's contract.

Vessel Nomination Documents

Vessel Nomination Documents

For CIF transactions, documentation showing vessel chartering, estimated arrival times, and cargo manifests for international shipment.

Injection Reports

Injection Reports

Records of product movement into designated storage tanks at loading terminals, confirming physical readiness for loading operations.

Trading Process in Action

Visual overview of key trading operations and procedures

Storage terminal facilities

Storage & Terminal Operations

TSJ Holdings maintains access to strategic petroleum storage facilities at major terminals worldwide. Tank Storage Tickets (TST) document product volumes, specifications, and availability, providing verified proof of product for FOB transactions.

Banking and financial instruments

Banking Instruments & Finance

All transactions are secured through Documentary Letters of Credit (DLC) or Standby Letters of Credit (SBLC) issued by top-tier international banks. Financial instruments are verified by TSJ's banking partners before product delivery commences.

FOB loading operations

FOB Loading Operations

Under FOB terms, buyers arrange vessel transportation and TSJ coordinates loading operations at designated terminals. Product quality is verified through independent inspections, with full documentation provided including Bills of Lading and quality certificates.

CIF maritime shipping

CIF International Shipping

For CIF transactions, TSJ arranges ocean freight and marine insurance, delivering refined petroleum products to the buyer's designated discharge port. Vessel nomination, cargo manifests, and shipping documentation are provided throughout the voyage.

Quality inspection and testing

Quality Inspection & Testing

Independent inspection agencies conduct comprehensive quality testing at loading terminals. Laboratory analysis verifies product specifications meet contracted standards, with Certificates of Quality and Quantity provided for all shipments.

Documentation and compliance

Documentation & Compliance

Complete documentation packages include commercial invoices, packing lists, insurance certificates, inspection reports, and all required export/import permits. TSJ ensures full compliance with international trade regulations and banking requirements.

Banking Instruments & Payment Security

Documentary Letter of Credit (DLC)

The Documentary Letter of Credit is the primary payment instrument used in international petroleum transactions. It provides security for both buyer and seller by ensuring payment is released only upon proper delivery of goods and documentation.

DLC Key Features

  • Irrevocable: Cannot be modified or cancelled without agreement from all parties
  • Bank-Guaranteed: Issued by a reputable international bank acceptable to TSJ
  • Document-Based: Payment triggered by presentation of compliant shipping and quality documents
  • Confirmed by Seller's Bank: TSJ's banking institution verifies and confirms the DLC
  • Specific Terms: Includes detailed product specifications, quantities, delivery terms, and documentation requirements

Standby Letter of Credit (SBLC)

In certain transactions, a Standby Letter of Credit may be used as a performance guarantee or payment security instrument. Unlike a DLC, an SBLC is typically drawn upon only if the seller fails to perform according to contract terms.

SBLC Applications

  • Performance Guarantee: Ensures buyer's commitment to fulfilling contractual obligations
  • Payment Assurance: Provides alternative payment security mechanism
  • Conditional Draw: Activated only under specific circumstances outlined in the contract
  • Bank Verification: Must be issued by a top-tier international bank and verified by TSJ's bank

Banking Requirements

All DLCs and SBLCs must be issued by internationally recognized banks with appropriate credit ratings. TSJ's banking partners will verify the authenticity and terms of all financial instruments before proceeding with product delivery.

Payment Flow Process

1

Contract Agreement

Buyer and TSJ sign SPA with agreed payment terms

2

DLC/SBLC Issuance

Buyer's bank issues financial instrument

3

Bank Verification

TSJ's bank confirms and verifies instrument

4

Product Delivery

TSJ arranges loading and shipment

5

Document Presentation

TSJ presents compliant documents to bank

6

Payment Release

Bank releases payment upon document verification

FOB (Free On Board) Transaction Procedures

FOB Terms Overview

Under FOB (Free On Board) terms, TSJ Holdings delivers refined petroleum products to a specified loading port or terminal. The buyer is responsible for arranging and paying for ocean freight, marine insurance, and all costs beyond the loading port.

Responsibility Distribution

Responsibility TSJ (Seller) Buyer
Product procurement and storage
Loading port charges
Loading operations
Vessel chartering
Ocean freight
Marine insurance
Discharge port costs
FOB Loading Operations
FOB Loading Operations: Under FOB terms, TSJ Holdings coordinates product loading at Korean terminals (INCHEON, ULSAN, or PYEONGTAEK). The buyer arranges vessel chartering, ocean freight, and marine insurance, while TSJ ensures quality product delivery at the loading port with full inspection documentation.

FOB Transaction Flow

1

Contract & KYC/KYB

  • Buyer and TSJ complete mutual due diligence
  • Sales Purchase Agreement (SPA) signed with FOB terms
  • Loading port specified (INCHEON, ULSAN, or PYEONGTAEK)
  • Product specifications, quantities, and delivery schedule agreed
2

Financial Instrument Establishment

  • Buyer's bank issues DLC in favor of TSJ Holdings
  • TSJ's bank verifies and confirms the DLC
  • Payment terms and documentary requirements finalized
  • Financial security confirmed before loading preparation
3

Product Allocation & POP

  • TSJ allocates product from inventory or procurement sources
  • Tank Storage Tickets (TST) issued showing availability
  • Allocation letters provided from terminal operators
  • Product specifications confirmed through laboratory analysis
4

Vessel Nomination & Approval

  • Buyer nominates vessel for loading (name, IMO, ETA)
  • TSJ and terminal operator review and approve vessel
  • Vessel must meet terminal specifications (LOA, draft, age)
  • Loading slot/laycan confirmed
5

Pre-Loading Inspection

  • Independent inspector (SGS, Intertek, Bureau Veritas) engaged
  • Pre-loading samples taken from storage tanks
  • Quantity measurement and quality analysis conducted
  • Inspection certificate issued before loading commences
6

Loading Operations

  • Product loaded onto buyer's nominated vessel
  • Loading supervised by terminal and inspector
  • Bill of Lading (B/L) issued upon completion
  • Risk and title transfer to buyer at ship's rail
7

Documentation & Payment

  • TSJ presents full document set to DLC issuing bank
  • Documents include: B/L, invoice, quality/quantity certificates
  • Bank verifies document compliance with DLC terms
  • Payment released to TSJ upon document acceptance

FOB Loading Terminals

TSJ Holdings operates FOB loading from three Korean terminals:

  • INCHEON: 1,000-2,000 tons capacity, LOA 110m, Draft 7m
  • ULSAN: 10,000-60,000 tons capacity, LOA 250m, Draft 14m
  • PYEONGTAEK: 4,000-12,000 tons capacity, LOA 240m, Draft 10.8m

CIF (Cost, Insurance, and Freight) Transaction Procedures

CIF Terms Overview

Under CIF (Cost, Insurance, and Freight) terms, TSJ Holdings is responsible for delivering refined petroleum products to the buyer's designated discharge port. TSJ arranges and pays for ocean freight and marine insurance, providing a comprehensive delivery solution.

Responsibility Distribution

Responsibility TSJ (Seller) Buyer
Product procurement and storage
Loading port charges
Loading operations
Vessel chartering
Ocean freight
Marine insurance
Discharge port costs
CIF International Shipping
CIF International Shipping: Under CIF terms, TSJ Holdings manages the complete logistics chain including vessel chartering, ocean freight, and marine insurance. Products are delivered to the buyer's designated discharge port with comprehensive documentation including Bills of Lading, quality certificates, and insurance policies.

CIF Transaction Flow

1

Contract & KYC/KYB

  • Buyer and TSJ complete mutual due diligence
  • Sales Purchase Agreement (SPA) signed with CIF terms
  • Discharge port(s) specified by buyer
  • Product specifications, quantities, delivery schedule agreed
2

Financial Instrument Establishment

  • Buyer's bank issues DLC in favor of TSJ Holdings
  • DLC includes CIF price (product + freight + insurance)
  • TSJ's bank verifies and confirms the DLC
  • Financial security confirmed before procurement
3

Product Procurement & Vessel Chartering

  • TSJ allocates or procures product from suppliers
  • TSJ charters appropriate vessel for international voyage
  • Vessel selection based on cargo size and port requirements
  • Marine insurance policy arranged by TSJ
4

Loading Port Operations

  • Product moved to loading terminal (INCHEON, ULSAN, PYEONGTAEK)
  • Independent inspector conducts pre-loading inspection
  • Quality and quantity certificates issued
  • Product loaded onto TSJ-chartered vessel
5

Voyage & Shipment

  • Vessel departs loading port bound for discharge port
  • Bill of Lading (B/L) issued and sent to buyer
  • TSJ provides voyage updates and ETA
  • Risk transfers to buyer upon loading
6

Documentation & Payment

  • TSJ presents full document set to DLC issuing bank
  • Documents include: B/L, invoice, quality/quantity certificates
  • Bank verifies document compliance with DLC terms
  • Payment released to TSJ upon document acceptance
7

Discharge Port Operations

  • Vessel arrives at buyer's discharge port
  • Buyer arranges discharge operations and port charges
  • Buyer may request discharge inspection (optional)
  • Product title transfers to buyer upon payment completion

CIF Advantages

CIF terms provide buyers with a simplified procurement process where TSJ handles logistics complexities including vessel chartering, marine insurance, and international freight. This is particularly advantageous for buyers without extensive shipping experience or established freight relationships.

Inspection Protocols & Quality Standards

Independent Third-Party Inspection

TSJ Holdings adheres to international best practices by engaging independent, internationally recognized inspection companies for all product quality and quantity verification. This ensures impartial, credible documentation that protects both buyer and seller interests.

SGS Inspection Services

SGS

Global leader in inspection, verification, testing, and certification services with extensive experience in petroleum product quality and quantity verification worldwide.

Intertek Inspection Services

Intertek

Leading quality assurance provider with extensive petroleum inspection capabilities, offering comprehensive testing and certification services for the energy industry.

Bureau Veritas Inspection Services

Bureau Veritas

Internationally recognized testing, inspection, and certification organization specializing in petroleum cargo inspection and quality control services.

Inspection Scope & Procedures

Quality Inspection

Purpose: Verify product specifications meet contract requirements
  • Samples drawn from storage tanks or vessel cargo tanks
  • Laboratory analysis for key parameters (density, sulfur content, flash point, viscosity, etc.)
  • Comparison against contract specifications
  • Quality Certificate issued confirming compliance

Quantity Inspection

Purpose: Measure precise volume or weight of product delivered
  • Tank gauging before and after loading/discharge
  • Temperature and density measurements for volume correction
  • Calculation of net standard volume or weight
  • Quantity Certificate issued with final figures

Loading/Discharge Supervision

Purpose: Monitor operations and ensure procedural compliance
  • Inspector present during entire loading or discharge operation
  • Verification of product transfer procedures
  • Documentation of loading/discharge times
  • Supervision Report issued summarizing operations

Seal & Security Verification

Purpose: Confirm product integrity and prevent contamination
  • Inspection of tank and valve seals before sampling
  • Verification of product segregation in storage
  • Confirmation of clean tank conditions before loading
  • Security documentation for chain of custody

Standard Test Parameters

Depending on the product type, inspection laboratories conduct comprehensive analysis of relevant parameters:

Refined Products

Gasoline, Diesel, Jet Fuel

  • Density @ 15°C (kg/m³)
  • Sulfur Content (ppm or % mass)
  • Flash Point (°C)
  • Distillation Characteristics (IBP, T10, T50, T90, FBP)
  • Viscosity (cSt)
  • Cetane Index/Number (diesel)
  • Octane Rating (gasoline - RON, MON)
  • Freezing Point (jet fuel)
  • Water Content (ppm)
  • Sediment & Contamination

Heavy Fuel Oil

Marine Fuels & Bunker Oils

  • Density @ 15°C (kg/m³)
  • Kinematic Viscosity @ 50°C (cSt)
  • Sulfur Content (% mass)
  • Flash Point (°C)
  • Pour Point (°C)
  • Water Content (% vol)
  • Ash Content (% mass)
  • Carbon Residue (% mass)
  • Vanadium & Aluminum (mg/kg)

LPG

Propane & Butane

  • Composition Analysis (C3, C4, C5+ fractions)
  • Vapor Pressure (kPa)
  • Density @ 15°C (kg/m³)
  • Sulfur Content (ppm)
  • Residue (mg/kg)
  • Water Content (visual)
  • Corrosion Test (Copper Strip)

Specification Compliance

All products must meet or exceed the specifications outlined in the Sales Purchase Agreement. If any parameter fails to meet contract requirements, TSJ will work with the buyer to determine appropriate remedies, which may include product replacement, price adjustment, or mutual agreement on acceptance with deviation.

Required Documentation & Compliance

Standard Document Package

Upon completion of loading and quality/quantity inspection, TSJ Holdings provides a comprehensive document package to facilitate customs clearance, payment processing, and regulatory compliance.

Commercial Invoice

Detailed invoice showing product description, quantity, unit price, total value, and payment terms. Must match DLC requirements exactly.

Bill of Lading (B/L)

Transport document issued by carrier confirming receipt of cargo for shipment. Serves as title document and receipt.

Packing List

Detailed list of cargo contents including product name, quantity, packaging type, gross/net weight, and vessel details.

Quality Certificate

Issued by independent inspector confirming product specifications meet contract requirements through laboratory analysis.

Quantity Certificate

Issued by independent inspector confirming precise volume or weight of product loaded, including temperature corrections.

Certificate of Origin

Official document certifying the country where the product was produced or refined. Required for customs clearance.

Insurance Policy (CIF)

For CIF transactions, TSJ provides marine insurance policy or certificate covering cargo value during ocean transit.

Statement of Conformity

TSJ's declaration that the product conforms to all contractual specifications and applicable international standards.

Export License

For products subject to export control, TSJ obtains necessary licenses from Korean authorities before shipment.

Customs Declaration

Complete and accurate customs export declaration filed with Korean customs authorities for all shipments.

Sanctions Compliance

TSJ confirms that neither the product, buyer, nor destination is subject to US, EU, or UN sanctions.

KYC/KYB Documentation

Comprehensive Know-Your-Customer and Know-Your-Business records maintained for audit trail and compliance.

Loading Completion

Physical loading of product onto vessel completed; Bill of Lading issued by carrier.

Within 2-3 Days

TSJ compiles full document package with inspection certificates and commercial documents.

Within 5-7 Days

Documents presented to buyer's bank (DLC issuing bank) for verification and payment processing.

Upon Bank Acceptance

Payment released to TSJ; original documents forwarded to buyer for customs clearance at destination.

Document Accuracy Guarantee

TSJ Holdings takes full responsibility for the accuracy and completeness of all documentation. We ensure that all documents comply with DLC requirements, international standards, and destination country regulations. Any discrepancies are resolved promptly to avoid payment delays.

Ready to Start Trading with TSJ Holdings?

Contact our trading desk to discuss your petroleum procurement needs and begin the partnership process.

Contact Trading Desk View Compliance Framework