Shareholders in New Zealand Refining are to vote on a $365 million expansion of the Marsden Point oil refinery on Friday.
At least half of the listed company's shareholders must vote in favour of upgrading the ageing petrol plant in Northland, for it to go ahead.
If it does, the company expects to boost production by 2 million barrels per year and lift its market share from 50 to 65%.
Craigs Investment Partners equity analyst James Schofield says it's a significant investment for the firm, and while it will affect dividends for a few years, it should lead to significant energy efficiency.
But Mr Schofield says it's not a game changer. He says NZR predicts it would increase the refining margin by around $1.10.
But Mr Schofield says it's important to stress that this would not fix the problem because the major problems relate to a glut of refining capacity globally.
He says New Zealand refining is at the whim of global refining productivity and profitability and their margins are very much derived from Singapore which has been under significant pressure.
Mr Schofield says the global downturn in refining profitability over the last few years will be at the forefront of the decision making process.
He says this project is somewhat at odds with the global situation, but detailed forecasts provided by NZR indicate it would be a profitable project.
The New Zealand Shareholders Association says it will support the upgrade plans, and thinks retail shareholders will accept some short term reduction in returns in order to gain significant long term benefits.