I don't see why it wouldn't. MuAn and MuCo effects that change Size, change the mass as well as volume.
In fact it would probably be a higher magnitude effect if it didn't change the mass when it changed the volume.
Actually I would consider the base to be much lower. I would go with MuCo B2 "change someone to give them a minor ability" since this is the base used to acquire other (non soak-oriented) animal traits like Eyes of the Cat. Call it The Camel's Continuous Libation or The Camel's Cistern...
MuCo Lvl 8
Req: An
R: Personal D: Sun T: Individual
Base 2, +2 Sun, +4 levels constant effect, req free
Gives the caster the water retention ability of the camel allowing for extremely long intervals between water sources even under extreme conditions.
No need to bother with Touch Range since each soldier could cast this on himself without the bother of lowering parmas et al.
Yeah, I agree. It seems like an effect like Eyes of the Cat is a good model.
Of course, this doesn't actually mean that they can survive without water, just that they need it less frequently. So, you may still need to carry some water with you. So, in some circumstances it might not solve the supply problem.
It could be handy to cast it at Touch range on grogs and companions though.
Given that you have added 4 levels for constant effect, you seem to be creating an item. This needs to be Touch Range, as otherwise it effects the item, not the person holding onto the item.
You're correct, an oversight on my part. Yet to my defence I only borrowed the formulaic idea from YR7s post. It can thus be even more economical at a mere level 4 rather than 8. More a cantrip than a spell and easy for Tremere apprentices to learn as they will certainly need its benefits in the course of their more rigorous training.
alternately use it to weave a story about an elite inner core of Tremere soldiers who bear the bracelets of the sands which confer this sort of endurance effect with other interesting effects perhaps aimed around desert fighting (Levant, Alexandria, further east?) the special forces if you will. Just a thought.
Yes, it can be very cheap.
I think that you would need to specify exactly what it lets the character do though. It's not entirely clear what "the water retention ability of a camel" is.
Something like the following seems sensible:
"Increases the critical time for Water Deprivation from 1 day to 1 week, see ArM5, Deprivation rules."
Or perhaps it gives the character a bonus (+6?)to the Deprivation roll.
It also gives warping points in the long run, don't forget that.
I thought about Eye of the Cat, but this seemed like a rather bigger change. Perhaps it isn't.
EotC also hints that there would be a physical side-effect, which in this case I imagine will be the camel's hump. So the target will become a haunchback for the duration of the effect, which I reckon can have a rather unpleasent Warping effect in the long run....
So it's cheap, but does have a disadvantage.
Salvete Sodales!
This MuCo(An) is nice, but don't forget that you just change your body in a way that simulates the camel's capability of storing water. This is mainly done in those big fleshy humps on it's back; so a user of the spell will inevitably earn a kind of hunchback. Doesn't look nice and encubers significantly.
Vale,
Alexios ex Miscellanea
Not to mention that is probably not cool when the Wind of Mundane Silence destroys it......
Sure, but only if used for a very long time. You have to be effected for a whole year.
Yep. The MuAn guidelines do too.
Maybe ... but every spell or item can be dispelled or destroyed.
Well having looked up the camel on wikipedia before posting that I should have perhaps elaborated a bit more on the possible effect of the spell.
From what Ive read, camels do not store water in their hump as is commonly believed. Their water retention ability is more a matter of highly effeicient fat storage and consumption added to a particular blood composition which avoids the typical blood thickening caused by dehydration. Camels are able to sweat far more of their total body mass without succumbing to deprivation or cardiac arrest.
So, with due reference to YR7's follow up comment about the spell causing a humpback on the target, my thought is that this spell effectively alters one metabolic process and blood composition to maximise bodily hydration. The end result being equally fine if represented by a prolongation of deprivation checks or a plus to said rolls. Let the number crunchers alter it to suit their preferred mechanic I say. 
That's all fine and good, although "what is commonly believed" might well be what happens in Mythic Europe?
Yup, the ArM4 Medieval Bestiary just said that the camel "puts up with his thirst" for up to four days but "drinks deeply when he can". A spell to give that ability might not be very pleasant and still require some strength of will not to go and seek water in spite of there being limited physiological effects.
People are free to take or leave this option as they see fit. Whilst i can appreciate that Mythic Europe realities can be different, I am of the opinion that far too much is swept under that carpet already. A camel is a camel and regardless of what people believe (or believed) about its humps, the physical reality of the camel's physiology is now as it has ever been from the time Adam first named the beast.
With all due respects to ARM4, that was then, this is ARM5 so Ill stick to my effect, even if I stand alone 