Abstract: This invention relates to a process for converting solid carbonaceous material, such as coal, to liquid and gaseous hydrocarbons utilizing methane, generally at a residence time of about 20-120 minutes at a temperature of 250.degree.-750.degree. C., preferably 350.degree.-450.degree. C., pressurized up to 6000 psi, and preferably in the 1000-2500 psi range, preferably directly utilizing methane 50-100% by volume in a mix of methane and hydrogen. A hydrogen donor solvent or liquid vehicle such as tetralin, tetrahydroquinoline, piperidine, and pyrolidine may be used in a slurry mix where the solvent feed is 0-100% by weight of the coal or carbonaceous feed. Carbonaceous feed material can either be natural, such as coal, wood, oil shale, petroleum, tar sands, etc., or man-made residual oils, tars, and heavy hydrocarbon residues from other processing systems.