The fresh water produced by the desalination plant has the potential to minimise the dependence on the Morgan to Whyalla pipeline, with an opportunity for Whyalla, as well as Port Augusta and Port Pirie to capitalise on this project.

The project proposes a world first to combine solar energy based power generation, desalination and commercial salt production processes in a single $370 million industrial complex.

The proposal is forging ahead in partnership with Port Augusta City Council and Origin Energy, and predicts to save thousands of tonnes of greenhouse gas emissions and millions of dollars in regional water subsidies.

Acquasol plans a $6 million initial public offer in March or April 2007 to fund the completion of all pre-development work ahead of financial close of the project by the end of 2007.

Managing director Michael Fielden said Point Paterson would be a world first in combining a large solar power station technologies and water desalination in a stand alone, near zero greenhouse gas emission facility.

"Unlike conventional desalination processes, Point Paterson will reduce or eliminate the need to dispose of by-product waste brine back into the sea," he said.

"At the end of the day, Point Paterson presents the first Australian environmentally and cost competitive alternative to climate change issues confronting the driest state and its reliance on fossil fuel-based power and stressed natural water resources."

The brine by-product of the desalination plant will be stored and harvested in solar salt ponds on site by commercial salt producer Cheetham, rather than returned to the sea.

"The power needed to pump water hundreds of kilometres along the Morgan Whyalla pipeline creates significant greenhouse emissions yet this project provides environmental relief to the river," Mr Fielden said.

"The whole idea is to put the water back into the pipeline."

Mr Fielden said Acquasol placed a greater focus on power production, receiving no water customer, with the exception of the City of Port Augusta who has said they will willingly make use of the water produced by the desalination plant.

The possibility of using the Point Paterson desalination plant in conjunction with BHP Billiton, who have also proposed a desalination be constructed at Port Bonython, was discussed by the two companies, but Mr Fielden said the BHP plant was purpose specific and the two companies had different agendas.