The $365 million expansion project at the Marsden Point refinery in Northland will see the creation of around 300 new jobs.

Marsden Point's New Zealand Refining Company operated at near full capacity for November and December, with a throughput of 7.2 million barrels, but margins dropped to the lowest point in at least five years.

The gross refining margin was $US1.18 a barrel, compared with $US9.00 for the same period in 2008 and a 2009 high of $US8.88 a barrel for the January/February period.

Refining margins have been cut drastically or in some cases completely, as demand for oil products reduced during the recession, along with a global over-supply.

New Zealand Refining Company expects a slashed full year net profit compared to 2008, in the range of $10 million to $20 million.

In February, the company reported an 11% rise in net profit for 2008 to $124.9 million, after processing almost 40 million barrels of crude oil for the year.