In a chiller with a two-stage centrifugal compressor, the discharge from the first stage impeller and the inlet to the second stage impeller are at a pressure level approximately half way between the cooler pressure and condenser pressure. With this arrangement, an economizer may be used. This is a shell within which refrigerant liquid from the condenser drops down to the interstage pressure, flashing off some of the refrigerant which is drawn directly into the second stage impeller. This reduces the amount of refrigerant which has to be compressed by the first stage impeller, improving the refrigeration cycle efficiency.