Cadiz Acquires 220-Mile Pipeline Asset

Cadiz Inc. "the Company," announced that it completed the acquisition of an existing 220-mile pipeline, the Cadiz "Northern Pipeline," making final payment of $19 Million to El Paso Natural Gas ("EPNG").

As California continues to address supply inequalities, infrastructure challenges and intensifying drought, the Northern Pipeline can provide new water conveyance access and supplement California's water infrastructure along an underserved, growing east-west route with additional regulatory approvals.

The Northern Pipeline extends southeast from California's Central Valley near Bakersfieldand terminates at the Company's Cadiz Ranch agricultural operations. The pipeline crosses underserved and disadvantaged communities as well as existing water infrastructure including the State Water Project, Los Angeles Aqueduct, and the Mojave River Pipeline. The existing 30" steel pipeline has the design capacity to convey up to 30,000 AFY transferred between communities along the route and can bring others together across California through water exchanges.

"Cadiz is deeply committed to enhancing California's water transportation network to improve water access for underserved communities," said Scott Slater, Cadiz CEO & president. "For more than a decade we have worked to identify opportunities to put existing pipelines to work delivering water to California communities who desperately need access and look forward to continuing to execute on this vision with this unique pipeline asset." 

Since Cadiz began the process of acquiring the Northern Pipeline in 2011, California's systemic water shortages have worsened, with disproportionate impacts being borne by disadvantaged communities, and it has become an important public policy issue for the State.  More than 1 million Californians now lack access to clean, safe, reliable water particularly in state-designated disadvantaged communities, such as the areas accessible to the Northern Pipeline route.  

"Our existing infrastructure and water supply cannot reliably serve all communities, particularly working-class communities that have grown and developed since the State's systems were first built," said Jon P. Preciado, business manager, Southern California District Council of Laborers. "Retrofitting existing infrastructure to improve access to water is a step in the right direction in ensuring all communities have affordable water for their families." 

The 30" steel Northern Pipeline was originally part of a 1,250-mile oil pipeline stretching from Texas to California constructed in 1985 by Plains All American Pipeline Company ("AAPL").  It is located within a 50-foot-wide corridor with few surface features adjacent to existing roads, railroads, and other pipelines.  

With the purchase of the Northern Pipeline, Cadiz has cemented its presence in the water conveyance market and has diversified its business opportunities. The pipeline offers an opportunity to move water between parties with access to the route.

In December 2020, the U.S. Bureau of Land Management assigned to Cadiz EPNG's existing right-of-way for the pipeline and granted a separate right-of-way for the route that authorized water as an approved substance to be conveyed in the pipeline.  Any commencement of water conveyance through the Northern Pipeline will comply with all appliable local, state, and federal laws. 

To learn more about the Northern Pipeline please visit our website at www.cadizinc.com.

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