A thermodynamic engine cycle can be implemented by exploiting the temperature difference existing between the warm surface seawater and cold deep seawater. It employs a working fluid that evaporates by warm seawater, produces work in an expander device, such as a gas turbine and finally condenses by cold deep seawater. A new Carnot-based cycle for OTEC applications, called CAPILI cycle is presented. In this new engine cycle, work is produced by the movement of an inert liquid through a hydraulic turbine. This inert liquid characterized by a very low saturation pressure and immiscibility with the working fluid, acts as a liquid piston that moves alternately between two insulated cylinders. The insulated cylinders are connected alternately to an evaporator and a condenser, each of them operates at different pressure and temperature levels. A performance study which consists in a steady state energy balance is realised first to select the most suitable working fluid for this specific application. It was found that the best fluid is the HFC refrigerant R134a. A dynamic modelling based on the concept of equivalent Gibbs system is carried out to appreciate the dynamic behaviour and the performances of this new thermal conversion process. (C) 2012 Elsevier Ltd. All rights reserved.