Underwater
In the Underwater Reactor, find a creature that looks like a ghost ship, hence its name Ghost Ship. Morph it and get a Guide Book. Now, take the book to the Kalm Traveler, a man located on the top floor of the rightmost building in Kalm. He will trade you the Guide Book for the Underwater materia. You can't do anything with the materia unless you decide to fight Emerald WEAPON. If you do, the materia will eliminate the timer.