  Hysteresis in the pressure-saturation relation in unsaturated porous media,
which is due to surface tension on the liquid-gas interface, exhibits strong
degeneracy in the resulting mass balance equation. Solutions to such degenerate
equations have been recently constructed by the method of convexification. We
show here that the convexification argument works even if the permeability
coefficient depends on the hysteretic saturation. The problem of uniqueness
remains open in this case.
