Desalination could provide the largest new supply of fresh water for Hong Kong - at a cost, according to the Water Supplies Department.
But water from the mainland should adequately meet demand for the coming two decades, it says in a paper.
A pilot study last year tested desalination technology at Tuen Mun and Ap Lei Chau and found it could produce 'hundreds of million cubic metres per year and theoretically as much as needed'.
But the process is expensive, consumes a lot of time and electricity, and could possibly hurt marine life.
'In light of this, we will keep the option closely in view for future preparedness, including searching for means of alleviating environmental issues and improving financial viability, taking account of advancement of technology and overseas experience,' the department paper says.
The Advisory Council on the Environment will discuss the paper today.
The process is based on reverse osmosis and involves pumping seawater at high pressure through a semi-permeable membrane to separate out the salt.
Despite the steep energy requirements, desalination is growing popular in arid regions such as Australia and the Middle East as a way to meet fresh-water needs.
Saudi Arabia's desalination plants provide about a quarter of the world's total output. The neighbouring United Arab Emirates is home to the biggest desalination plant in the world, the Jebel Ali Desalination Plant, which can produce 300 million cubic metres of water a year.
It is estimated Hong Kong will need 1.3 billion cubic metres by 2030, when the city's population is expected to be 8.4 million.
According to the paper, Hong Kong used 951 million cubic metres of fresh water last year. Domestic use accounted for 35 per cent, while non-domestic consumption made up 25 per cent.
Leaky pipes accounted for 23 per cent of the total, while fresh water is also used for flushing and fire-fighting.
The government's HK$15.7 billion programme to replace and repair 3,000km of water mains will be completed in 2015.
But cutting seepage is not expected to offset rising demand from then on, the paper says.
Up to 80 per cent of Hong Kong's water is imported from Dongjiang, up to an agreed maximum of 1.1 billion cubic metres. So far, the most imported in a year was 808 million cubic metres, in 2004.
The paper says supplies from Dongjiang are adequate to cope with estimated demand in the next 20 years.
Environmentalists have warned that the plentiful source of seawater could distract from conservation efforts, and have warned that large plants should only to be built where there is dire need.