The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has joined the growing conversation surrounding the functionality of the old Port Harcourt Refinery, addressing widespread skepticism about its operations.

The refinery, which has a capacity of 60,000 barrels per day (bpd), is under scrutiny following claims that it is operational, though lacking a critical reformer unit required for independent petrol production. It has been argued that the facility’s erratic functionality and reliance on blending instead of refining raise concerns about the government’s transparency, with some describing the refinery as a potential sham.

Speaking on Arise Television, PENGASSAN President Festus Osifo confirmed that the refinery is producing some petroleum products, albeit with significant limitations. He disclosed that while the refinery’s Crude Distillation Unit (CDU) is operational, it lacks a Catalytic Reforming Unit (CRU), which is vital for producing petrol directly from naphtha.

“Nigerians have every reason to doubt the government. We have every reason to question assertions from governments because over the years, they have actually let us down,” Osifo stated. He continued, “Really, from our checks, the Port Harcourt refinery is actually working. But let me explain this. In petroleum products production, you take the crude and pass it into what they call the CDU. That unit today, as we speak, is working.”

Osifo explained that the CDU is responsible for producing kerosene (DPK), diesel (AGO), and naphtha, which is an intermediary product. However, the absence of a functioning reformer unit means the refinery cannot refine naphtha into petrol independently. Instead, naphtha is blended with Crack-C5 sourced from external suppliers, such as Indorama Petrochemicals, to produce Premium Motor Spirit (PMS).

“What is now happening at the moment is that you are going to take that naphtha and merge it with Crack-C5. It will now be blended with naphtha, and some other processes take place, and now it gives us PMS,” Osifo said.

Energy analyst Kelvin Emmanuel, who has been critical of NNPC Limited, said PENGASSAN has proved his assertion that the refinery is more like a blending facility. He highlighted the absence of a Vacuum Distillation Unit (VDU), a critical component for refining heavier fractions of crude oil into high-value products.

“The truth is coming out gradually. Area V is not a refinery; it’s a blending plant. The SRG [Straight Run Gasoline] that’s used as the main chemical component for curing with C5 is not produced there but imported into Okirika Jetty,” Emmanuel said.

He added that PENGASSAN has “Confirmed that they basically relocated the Malta blending business to Port Harcourt.”

Emmanuel’s assertions align with concerns that the refinery’s limited capabilities undermine its utility and raise questions about the government’s honesty in representing its operational status.

A History of Inconsistent Operations

The Port Harcourt Refinery, like others in Nigeria, has struggled with operational inconsistencies for years. Despite government assurances that the facility has been revamped, it has failed to deliver consistent outputs since it was relaunched.

Observers have criticized the facility as a “white elephant project,” citing over $2 billion invested in its rehabilitation over the years.

PENGASSAN’s Osifo acknowledged this history, emphasizing that Nigerians’ skepticism is justified given past disappointments.

“What Nigerians should be interested in today is, is the Port Harcourt refinery producing AGO? The answer is yes. Is the old Port Harcourt refinery producing kerosene? The answer is yes. Is it producing PMS today? The answer is yes. But Nigerians have every reason to doubt and question government pronouncements, considering that they had been betrayed several times,” he said.

Installing a Catalytic Reforming Unit, essential for refining naphtha into petrol, can be prohibitively expensive. According to industry leaders, the cost of a CRU can rival or exceed the combined cost of installing multiple refinery trains. This steep expense may explain the government’s focus on partial functionality rather than comprehensive upgrades.

“There is no refinery in the world that has a CDU that produces PMS in a single tranche,” Osifo explained. “Even Dangote Refinery’s CDU doesn’t just produce PMS. But there is a product that comes out that is close to PMS. You have to produce it to spec, or it damages vehicles.”

Osifo assured Nigerians that PENGASSAN would address the refinery’s issues at its upcoming National Executive Council meeting. He emphasized the importance of focusing on the refinery’s outputs rather than its processes. “In all honesty, the refinery is working, and these products are all there and coming out,” he stated.

Tenstorrent, a rising player in the artificial intelligence (AI) hardware and software space, has secured $693 million in a Series D funding round.

The round, which values the company at approximately $2.6 billion, attracted prominent investors such as Jeff Bezos, Samsung Securities, LG Electronics, and Hyundai Motor Group, among others.

The funding highlights growing interest in alternatives to Nvidia’s dominant position in the AI chip market.

The investment round was co-led by Samsung Securities and AFW Partners, a Seoul-based venture capital firm. Tenstorrent’s Chief Operating Officer Keith Witek expressed enthusiasm about the diverse group of investors backing the company.

“They respect our team, our technology, and our vision,” Witek said in a statement, noting the ~$150 million in deals closed as a sign of commercial viability and market opportunity.

Aiming to Disrupt Nvidia’s Grip on AI Hardware

Tenstorrent, founded in 2016 by Ljubisa Bajic, Ivan Hamer, and Milos Trajkovic, builds AI hardware, provides open-source software for chipmakers, and licenses its technology to clients aiming to design their own silicon. Under the leadership of CEO Jim Keller—a renowned microprocessor engineer who joined the company as CTO in 2020—Tenstorrent has grown into a potential challenger for Nvidia, leveraging its focus on open-source technology.

Central to Tenstorrent’s strategy is its use of RISC-V, an open standard instruction set architecture developed at the University of California, Berkeley. RISC-V enables software to control computer CPUs through royalty-free open-source licenses, offering increased flexibility and cost savings for customers.

In contrast, Nvidia’s proprietary approach requires a significant commitment from its customers, often locking them into the company’s ecosystem of chips and data center layouts. This exclusivity can lead to substantial switching costs, a factor that Tenstorrent aims to exploit by providing interoperable and open-source alternatives.

“In the past, I worked with proprietary tech, and it was really tough,” Keller said in an interview with Bloomberg. “Open source helps you build a bigger platform. It attracts engineers. And yes, it’s a little bit of a passion project.”

Investment from Tech Giants and Visionaries

The backing of investors like Jeff Bezos and leading South Korean conglomerates is seen as Tenstorrent’s potential to shake up the AI chip industry. Samsung, LG, and Hyundai bring strategic value, given their leadership in consumer electronics, automotive technology, and semiconductors. Bezos’ involvement, through Bezos Expeditions, is also perceived as confidence in the company’s vision to carve out a niche in a market long dominated by Nvidia.

Despite the promising funding round, Tenstorrent remains a fraction of Nvidia’s size. Nvidia, the undisputed leader in AI chips, boasts vast resources, a well-established ecosystem, and an entrenched market position. Tech analysts note that transitioning customers from Nvidia’s ecosystem to an open-source alternative will require not only technological excellence but also strategic partnerships and long-term investment.

However, it is believed that the growing demand for flexible and cost-effective solutions could work in Tenstorrent’s favor. The company’s focus on interoperability and its commitment to open standards resonate with an industry increasingly seeking alternatives to monopolistic practices.

In a fresh escalation of the ongoing trade and technology tensions between the U.S. and China, Beijing announced on Tuesday a sweeping ban on the export of critical high-tech materials such as gallium, germanium, and antimony, with potential military applications.

This move is seen as a direct response to the U.S.’s expansion of export controls on Chinese companies involved in semiconductor manufacturing, which have become a key focal point in the broader geopolitical rivalry.

The announcement by China’s Ministry of Commerce follows the U.S. government’s decision to add 140 companies to a so-called “entity list,” effectively placing them under strict export restrictions. These include controls on the export of essential semiconductor-related equipment and software, as well as high-bandwidth memory chips crucial for advanced technological applications.

The U.S. justifies these actions on national security grounds, citing concerns over the potential military use of technologies that could be diverted to Chinese military applications.

The Materials at the Center of the Dispute

Gallium and germanium, which are produced almost exclusively in China, are vital components in the production of advanced semiconductors, solar panels, and military technologies, including GPS systems and missiles. These metals are also crucial in the development of mobile phones, electric vehicles, and other high-tech consumer goods.

As the largest global supplier of both materials, China’s decision to restrict its export to the U.S. is expected to have significant implications for the American tech industry, which relies heavily on these imports for its own manufacturing processes.

In addition to gallium and germanium, the export ban also includes antimony, a versatile material used in a range of industries from batteries to weapons production. The restrictions on graphite and super-hard materials, such as synthetic diamonds, further complicate the situation. These super-hard materials are used in manufacturing cutting tools, disc brakes, and protective coatings in various industrial sectors.

Washington’s actions are driven by concerns over national security, particularly around China’s military capabilities and the rapid advancements in its AI and semiconductor sectors. However, these measures have been widely criticized by Chinese industry leaders who argue that the U.S. is using national security as a pretext to gain an unfair economic advantage.

The China Semiconductor Industry Association and the China Association of Automobile Manufacturers have both issued statements condemning the U.S. restrictions, calling them an abuse of export control mechanisms and a violation of free-market principles. The statements also highlight the negative impact on global supply chains, arguing that these measures are inflating costs and disrupting business for American companies that rely on Chinese supply chains for materials like gallium and germanium.

“Such behavior seriously violates the laws of the market economy and the principle of fair competition, undermines the international economic and trade order, disrupts the stability of the global industrial chain, and ultimately harms the interests of all countries,” it said in a statement.

The U.S. Geological Survey indicates that nearly half of the U.S. supply of gallium and germanium comes from China. In 2022, China exported approximately 23 metric tons of gallium and produced around 600 metric tons of germanium. These figures underscore China’s dominant role in the global supply of these critical materials and its ability to leverage this position in the ongoing trade conflict.

While the U.S. is already experiencing disruptions due to these export restrictions, experts have warned that the long-term consequences could be far-reaching. American tech companies are now facing significant challenges in securing supplies of essential materials for semiconductor manufacturing, which could result in delays and higher costs for new technologies.

The semiconductor sector, already under pressure from U.S. sanctions on Chinese firms, is likely to experience additional strain as China tightens access to these vital raw materials.

In response, China’s government has signaled that these measures are not just retaliatory but are also aimed at protecting its own “rights and interests” in the global trade arena. As the U.S. seeks to limit China’s access to cutting-edge technology, China is asserting its control over the materials crucial for the manufacturing of those same technologies.

This means the trade war over high-tech materials is going to intensify as both nations continue to ramp up tariffs and restrictions.

Analysts believe that beyond the semiconductor and high-tech industries, the growing tensions over trade restrictions could have significant geopolitical ramifications. As the U.S. continues to press its allies to limit their economic ties with China, particularly in the tech sector, they note that Beijing may look to strengthen its alliances with other global players, including Russia and parts of Europe, to mitigate the impact of Western sanctions.