Question

In an attempt to produce premium oysters, a firm in Scotland has developed a prototype of a submersible oyster farm, sitting below the surface of the ocean, and it provides ideal conditions for the mollusks' growth.

• A. farm, sitting below the surface of the ocean, and it provides
• B. farm, sitting below the surface of the ocean for providing
• C. farm that sits below the surface of the ocean and providing
• D. farm that sits below the surface of the ocean and provides

Answer 1

The correct option is D farm that sits below the surface of the ocean and provides

If you use COMMA + ING, you are modifying the whole preceding clause. This is mainly used to presents the results of an action, to add info to the preceding clause.
A. farm, sitting below the surface of the ocean, and it provides
B. farm, sitting below the surface of the ocean for providing
Options A B use that, and it's clearly wrong.
Now, the remaining options start with "that" <==a noun modifier so we are referring to the "submersible oyster farm" alone.
The only parallel option is D, hence is the correct one. The verb must be parallel as both express an idea about the "submersible oyster farm".