The U.S. Bureau of Reclamation has awarded an $81 million construction contract to Carstensen Contracting, Inc. for the Block 2-3 pipeline, part of the San Juan Lateral of the Navajo-Gallup Water Supply Project (NGWSP) in northwest New Mexico. The agency characterizes this as the last large-scale contract needed for the lateral, moving the system past the three-quarter mark toward completion and advancing a project designed to deliver a reliable municipal water supply to nearly 250,000 people under a longstanding water rights settlement.
The Block 2-3 segment extends from the Frank Chee Willetto Reservoir, located east of Shiprock, south to the San Juan Lateral Water Treatment Plant. The scope includes installation of 42-inch and 48-inch buried transmission pipeline, regulating tanks, crossings, valves, and cathodic protection. The work also provides for supervisory control and data acquisition (SCADA) and fiber‑optic systems to enable remote monitoring. This is Carstensen’s first contract on the NGWSP, and it is funded through the Reclamation Water Settlement Fund.
The NGWSP was authorized in the 2009 Omnibus Public Land Management Act and is built around two major branches: the Cutter Lateral to the east and the San Juan Lateral to the west. The project addresses community water needs across a region where many households lack indoor plumbing and depend on hauled supplies. When both branches are complete, the overall system will comprise roughly 300 miles of pipeline, two water treatment plants, 19 pumping plants, and multiple storage tanks to improve supply reliability for the Navajo Nation and regional partners including the city of Gallup.
Construction on the Cutter Lateral began in 2015, with water deliveries commencing in October 2020 and later extending to the Jicarilla Apache Nation. The San Juan Lateral, the larger and more complex branch, has been under construction since 2012. According to the agency, the lateral is now more than 75% complete.
Progress on the San Juan Lateral has advanced through a series of awards in recent years. In 2021, a $76 million contract went to SJ Louis Construction for the Navajo Code Talkers Sublateral. In September 2022, Archer Western Construction received a $73.1 million contract for Pumping Plants 2 and 3 on the San Juan Lateral. In March 2023, SJ Louis Construction was awarded $66.8 million for Reaches 4A and 4B of the lateral.
Further milestones include a 2024 award of $267 million to Jacobs to design and build the San Juan Lateral Water Treatment Plant. In late 2025, a $62 million contract was awarded to Ames Federal Contracting Group for a San Juan Lateral pumping plant, followed by a $67.7 million award in April 2026 to the same contractor for the San Juan River intake and pumping plant. In June 2026, Flatland Energy Services secured a $75.5 million contract for trenchless drilling along the Block 2-3 corridor. The September 2026 $81 million award to Carstensen Contracting covers construction of the Block 2-3 pipeline segment.
With the San Juan Lateral now reported to be more than 75% complete, initial water deliveries on that branch are planned for late 2028. Full completion of the NGWSP is targeted by the end of 2029, pending successful execution of remaining construction activities and commissioning.