  In this paper we present Monte Carlo N-Particle (MCNP) simulations of the
system for underwater threat detection using neutron activation analysis
developed in the SABAT project. The simulated system is based on a D-T neutron
generator emitting 14~MeV neutrons without associated $\alpha$ particle
detection and equipped with a LaBr$_3$:Ce scintillation detector offering
superior energy resolution and allowing for precise identification of
activation $\gamma$ quanta. The performed simulations show that using the
neutron activation analysis method with the designed geometry we are able to
identify $\gamma$-rays from hydrogen, carbon, sulphur and chlorine originating
from mustard gas in a sea water environment. Our results show that the most
efficient way of mustard gas detection is to compare the integral peak ratio
for Cl and H.

Instrumentation and Detectors