Go to Junon and start traveling to the underwater reactor. Once te are on the long underwater path before te actually enter the reactor te will get in somewhat frequent battles with a large barca with a skeleton on the front and it performs an eject sposta with it's paddle. Morph it and te get a book of some sort can't remember the exact name.
Then te take that book to Kalm and in the, kinda superiore, in alto right corner there is a house. Go in that house then go up stairs and there will be a guy there. Give him the book, he gives te the underwater materia. (also give this guy the rose obtained from beating ruby weapon and te get a oro chocobo but da that time I definitely have one]
