Cadiz Signs $403M Deals to Convert Gas Pipeline to Water Line in San Bernardino County
Cadiz affiliate Fenner Gap Mutual Water Company has signed construction manager at-risk contracts worth a combined $403.3 million to convert a 220-mile natural gas pipeline into a water conveyance system, Construction Dive reports.
Deal Details
Fresno-based W.M. Lyles, also serving as construction manager on the project, secured $218.9 million to build pump-station facilities. Baldwin Park-based Mike Bubalo Construction won a $54.9 million contract covering pipeline replacement and related facilities. Both contracts, disclosed in a July 27 SEC filing, cover engineering, procurement and construction on the Northern Pipeline. Cadiz set aside another $129.5 million for owner-procured pumps, replacement pipe, power generation equipment, additional wellfield facilities and project contingency.
The pipeline runs from Cadiz, California, in the Mojave Desert to Inland Empire communities in San Bernardino County and is a core piece of Cadiz’s Mojave Groundwater Bank, one of the largest new water supply and storage projects in the Colorado River Basin. The line’s potential capacity is estimated at 25,000 acre-feet per year, according to the SEC filing. The project has cleared several regulatory hurdles this year: the EPA approved it in February to apply for up to $194 million in low-interest federal financing under the Water Infrastructure Finance and Innovation Act, and the Bureau of Land Management approved its right-of-way on federal lands in July. Cadiz CEO Susan Kennedy told shareholders in May the approach offers a cost-effective way to meet Southern California’s growing water demand, though the Sierra Club has raised concerns the project could further stress an overburdened groundwater system.
Cadiz has not announced a construction start date, but the SEC filing says contract pricing and scheduling assume a September 2026 notice to proceed.
What It Means for Subcontractors
- Pump-station work under the $218.9 million Lyles scope opens mechanical, electrical and civil subcontract packages in San Bernardino County once notice to proceed is issued, targeted for September 2026.
- Bubalo’s $54.9 million pipeline replacement contract signals near-term demand for pipefitting, welding and trenching crews along the 220-mile Mojave-to-Inland Empire corridor.
- The $129.5 million owner-procured allocation for pumps, replacement pipe and power generation equipment means additional supply and installation subcontracts could be issued directly by Cadiz rather than through the two primary contractors, worth tracking as a separate bid channel.
- Firms with gas-to-water pipeline conversion experience have a specific edge here, since the scope includes retrofitting existing gas infrastructure rather than new-build construction.
- Federal financing tied to the project, including the pending $194 million WIFIA loan, means schedule and funding could shift; subs should confirm notice-to-proceed status with Lyles or Bubalo directly before committing crews.
