From Unofficial Stationeers Wiki
You can obtain water by smelting or crushing Ice (Water) using a Furnace or an Ice Crusher, or by combusting Volatiles and Oxygen using the Kit (Atmospherics) H2 Combustor. Filtering is no longer required as the Furnace and Ice Crusher now contain separate outputs for liquids and gasses.
Water needs to be consumed by the player in order to stay alive. It is also used to grow plants in a Hydroponic Tray or a Hydroponic Station.
Water can only be consumed from a Water Bottle, which can be filled using a Water Bottle Filler
Water has a specific heat of 72 Joule / mol making it great for cooling.
Water was previously treated as a Gas. It could be part of the atmosphere, and could be stored in gas tanks and pipes. However, since with "Go with the flow" update, a new system for liquids has been introduced, including separate pipes, tanks, pumps, etc for liquids. Water is currently the only available liquid.