A contract to increase methanol production in Taranaki is being touted as bringing billions of extra revenue into the country over the next decade.
Methanex is entering into a 10-year agreement with Todd Corporation Group to restart a second methanol manufacturing train at its Motunui facility, north of New Plymouth.
That would mean a doubling of production for Methanex, further development of Todd's Mangahewa gasfield, and the creation of 500 construction jobs.
According to Todd chief executive Jon Young, the projects and their combined capital expenditure of up to $860 million will result in a major boost to GDP.
An assessment carried out for Todd put the value of the agreement at up to $1.2 billion in government revenue from royalties and taxes, said economic development minister Steven Joyce.
David Robinson, chief executive of the Petroleum Exploration and Production Association, welcomed the news, saying oil and gas was the fourth largest export earner for New Zealand.
“In any language, $860 million of cash injected into the local economy will make a real difference.”