Following BLM Approval, Cadiz Advances $403.3M Northern Pipeline

Following federal approval of the right-of-way (ROW) grant for the Northern Pipeline, Los Angeles-headquartered Cadiz, Inc. has announced that its affiliate Fenner Gap Mutual Water Company has executed the principal construction contracts for the Northern Pipeline conversion project.

The agreements utilize a Construction Manager at Risk (CMAR) delivery model that establishes guaranteed maximum prices for the Northern Pipeline’s principal construction components, including pump stations and pipeline replacement. These contracts, together with contractual pricing for owner-procured equipment and materials, as well as purchase options and supplier quotations for other necessary components, establish the estimated capital expenditures required to place the Northern Pipeline into service at approximately $403.3 million.

The CMAR delivery structure provides Fenner Gap with contractually established guaranteed maximum prices for the project’s principal construction packages while allowing the company to directly procure major long-lead equipment and materials. This approach is intended to reduce construction cost uncertainty, preserve flexibility to competitively procure major equipment and materials and establish a defined construction capital budget that can be used in connection with the company’s project financing activities for the Mojave Groundwater Bank.

As previously announced on July 10, 2026, the U.S. Bureau of Land Management (BLM) approved a ROW grant authorizing construction, conversion and operation of the Northern Pipeline for water conveyance across BLM-managed lands under Title V of the Federal Land Policy and Management Act (FLPMA). Following issuance of the ROW grant to Fenner Gap, Cadiz completed the customary submittals required by the BLM, including payment of a reclamation bond, construction notifications and other documentation required under the grant.

Earlier this year, San Bernardino County and Fenner Gap formed the San Bernardino Water and Power Authority, a Joint Powers Authority, to support the planning and development of water and energy infrastructure projects in San Bernardino County. The Authority is expected to play a key role in supporting the project financing through the issuance of municipal bonds and other debt instruments.

Cadiz continues to advance efforts to secure equity capital, municipal debt and federal infrastructure financing. The CMAR contracts are expected to support these financing activities, including the company’s previously announced application for up to $194 million in financing through the U.S. Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act program.

Reducing construction risk through maximum price guarantees is also expected to advance ongoing discussions with potential equity investors in Cadiz’s water infrastructure projects. The contracts establish a benefit-sharing mechanism to incentivize its construction partners to further reduce the project’s total cost.

Information for this article was sourced from Cadiz, Inc.