Any final decision to buy Palestinian gas through the British energy company BG Group PLC would have to be approved by the cabinet because of the political and strategic issues involved, a senior government source said Wednesday night following reports that progress was being made in the negotiations of the deal that would earn the PA about $1 billion in royalties. BG is hoping to secure a 15 to 20-year contract to supply Israel with gas from its Gaza Marine field, which is controlled by the Palestinian Authority, off the coast of the Gaza Strip. "Negotiations continue with the Israelis," the company said Wednesday. "There are still commercial issues to be finalized, but the fundamental point is that any project will be the result of a bilateral agreement between the Palestinian Authority and the Israeli government." The Times newspaper reported that BG was poised to agree on the terms of a $4b. deal to supply gas to Israel, with representatives from the British energy company scheduled to meet Israeli negotiators next week. Israeli officials said that about a quarter of the profits would go to the PA. Last month the cabinet approved continued negotiations with BG over purchase of the gas, a decision that necessitated a previous ban on buying natural gas from the PA. The change of heart, government officials said, was simply the product of economics, since buying the gas from Egypt, another option, would cost twice as much. Under the proposed deal, BG would transport gas from the Gaza Marine field through an undersea pipeline to Ashkelon. The field, which BG purchased in 2000, contains 1 trillion cubic feet of natural gas.