Federal approval for conversion of pipeline clears path for construction
LOS ANGELES, July 10, 2026 /PRNewswire/ -- Cadiz, Inc. (NASDAQ: CDZI/CDZIP, the "Company") is pleased to announce today that the U.S. Bureau of Land Management ("BLM") issued a final decision approving the right-of-way ("ROW") grant that allows the Company to begin construction on conversion of the Cadiz Northern Pipeline from natural gas to water conveyance. BLM's approval of the ROW, when fully executed by the Company, authorizes the conversion and operation of the Northern Pipeline for the conveyance of water on BLM-managed lands under the authority of Title V of the Federal Land Policy and Management Act ("FLPMA").
"We're excited to achieve this pivotal milestone," said Susan Kennedy, Chair and CEO of Cadiz. "After many years of planning and environmental review, the project is now ready to begin the construction stage."
The Northern Pipeline will convey water from the Mojave Groundwater Bank, one of the largest new water supply projects in the Colorado River Basin, to High Desert and Inland Empire communities in California's San Bernardino County, and is expected to provide one of the lowest-cost sources of new water in the drought-plagued Southwest.
"With long-term offtake agreements and construction contracts in place, this federal permit marks a key milestone as we finalize project financing with prospective investors."
Cadiz completed the purchase of the existing 220-mile Northern Pipeline from El Paso Natural Gas ("EPNG") in 2020. The buried steel pipeline was maintained as a natural gas pipeline under a 30-year Mineral Leasing Act ROW that was renewed in 2020 and assigned in part to Cadiz in 2023. Last year, Fenner Gap Mutual Water Company ("FGMWC")—the mutual water company formed by Cadiz in 2010 to manage and operate the Mojave Groundwater Bank, applied for a FLPMA ROW to change the use of the pipeline from gas to water including the construction of pump stations and related facilities, The decision by the BLM announced today approves a new FLPMA ROW authorizing the conversion of the existing pipeline.
The ROW authorizes use of the pipeline to convey water across BLM managed lands and permits the long-term operation of the Northern Pipeline. The ROW will extend for 50 years after the grant, based on the projected operational life of the pipeline.
In 2024, Cadiz entered into commercial water supply agreements with public water agencies and investor-owned utilities to provide dedicated water supplies through the Northern Pipeline under long-term contracts. The Mojave Groundwater Bank is supported by fully adjudicated water supply permits, completed environmental studies, and is in advanced stages of engineering, procurement and construction contracting. When placed into service, the Northern Pipeline will enable delivery of up to 25,000 acre-feet of new water supplies annually, with the ability to expand as additional Mojave Groundwater Bank facilities are developed.