Energy Minister Phil Heatley says expansion of the Marsden Point oil refinery will make New Zealand less dependent on fuel imports and reduce carbon emissions.
Refining New Zealand Ltd shareholders on Friday voted to borrow $365 million to replace a 1960s processing unit with a more efficient plant that will boost capacity by three million barrels per year.
Chief executive Ken Rivers says the new plant will allow the refinery to process light Taranaki crude oil that is now processed overseas.
Mr Heatley says Marsden Point will supply about 65% of New Zealand's petrol and oil needs after the expansion, up from 55% at present.
Refining New Zealand says the four-year project will generate 600 jobs and help tide many engineering firms in Whangarei over the recession.