This audio is auto-generated. Please let us know if you have feedback. Award: Pipeline conversion for water conveyance
Value: $403.3 million overall
Location: Southern California
Client: Fenner Gap Mutual Water Company
A major but controversial water pipeline conversion project in the Southwest is one step closer to turning on the tap.
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An affiliated unit of Los Angeles-based water infrastructure firm Cadiz has executed guaranteed maximum price construction contracts for its Northern Pipeline conversion project, according to a July 28 news release.
The contracts and other components bring the project’s total estimated cost to $403.3 million.
The initiative’s goal is to convert a 220-mile natural gas pipeline to a water conveyance system from Cadiz, California , in the Mojave Desert to Inland Empire communities in San Bernardino County, according to Cadiz.
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Cadiz affiliate Fenner Gap Mutual Water Company signed construction manager at-risk contracts with W.M. Lyles and Mike Bubalo Construction, according to a July 27 Securities and Exchange Commission filing .
Both contracts cover engineering, procurement and construction on the Northern Pipeline, according to the filing.
For Fresno, California-based Lyles, which is also acting as construction manager on the project, the agreement covers $218.9 million for pump-station facilities. Meanwhile, Baldwin Park, California-based Bubalo won a $54.9 million contract for pipeline replacement and related facilities to convert the pipeline for water conveyance.
Cadiz allocated an additional $129.5 million for owner-procured pumps, replacement pipe and power generation equipment, necessary additional wellfield facilities and customary project contingency, according to the filing.
Mojave Groundwater Bank
The conversion of the pipeline represents a key part of Cadiz’s Mojave Groundwater Bank, one of the largest new water supply and groundwater storage projects in the Colorado River Basin , according to Native News Online.
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The project provides an alternative source to supply water from the firm’s Cadiz Ranch property to areas that now rely on water imported from Northern California through the California State Water Project, according to Cadiz. The potential total capacity of the Northern Pipeline is estimated at 25,000 acre-feet per year, according to the SEC filing.
Cadiz CEO Susan Kennedy wrote in a May letter to shareholders that the company’s approach can help supply Southern California’s ever-growing demand for water in a more cost-effective way. But the firm’s critics, including environmental group the Sierra Club , contend the company’s initiatives threaten to further stress an already overburdened groundwater system.
Despite that opposition, the project has continued to gain momentum this year.
In February, the U.S. Environmental Protection Agency gave the Northern Pipeline a green light to apply for a low-interest loan of up to $194 million to fund capital costs under the federal Water Infrastructure Finance and Innovation Act. Then, in July, the U.S. Bureau of Land Management approved the pipeline’s right-of-way to operate on federally owned lands.
Water projects have been big business for infrastructure construction firms in recent years, and deal flow in the space has continued to grow .
Meanwhile, the proposed Water Resources Development Act of 2026 currently before Congress could supply more than $30 billion in federal funds to communities for critical water infrastructure.
Though Cadiz didn’t set a timeline for construction to start in its release, the SEC filing said the agreements reflect pricing and scheduling assumptions based on a September 2026 notice to proceed.
