NOVELTY - Method for converting natural gas (NG) into a hydrocarbon liquid and water involves separating a stream (12) of NG into feed stream (FS) (14) and burn stream (BS) (16). A furnace (10) burns BS and heats FS to form hydrogen (H) and reactive products (RP). RP is quenched with H and conveyed to reactor (30) supplied with NG and a catalyst which reacts RP and NG to produce H and hydrocarbon liquid (HL).    USE - For conversion of natural gas to hydrocarbon liquid and water.    ADVANTAGE - Heat produced from the fuel cell is used to generate additional electricity. The electrical power is used to increase the temperature of the natural gas stream entering through high-temperature reactor. Plasma temperatures are higher than the preferred temperature range for the gas reactions, so a more energy-efficient process is achieved without bringing the natural gas to plasma temperature. The higher temperature produces extra components in the product stream that require a great deal more energy and makes the process energy efficient. Diverted NG is burnt preferably with oxygen enriched air, hence NOx production from combustion furnace is decreased. Heat generated by fuel cell or turbine is used to boil the water exiting in fuel cell, forming stream which is used to generate electricity, e.g. in a steam turbine. The heat generated by fuel cell or turbine is used in heat exchangers to raise the temperatures of streams in the preheater. Electrical generator is eliminated entirely so as to maximize hydrogen production. The vapor pressure of 1 naphtha or gasoline is about 1 bar at 40 degrees C. Thus, it can be transported via truck or ship. The reaction to produce naphtha or gasoline is thermodynamically favorable. The equilibrium thermodynamics for the reactions of acetylene and ethylene with methane are more favorable at low to moderate temperatures. The reaction of acetylene and ethylene to benzene is suppressed and the reaction of reactive hydrocarbons with methane is enhanced.    DETAILED DESCRIPTION - Method for converting natural gas (NG) into a hydrocarbon liquid and water involves separating a stream (12) of natural gas (NG) into a feed stream (14) and burn stream (16) which are conveyed to a furnace (10). The furnace burns the burn stream and heats the feed stream to form hydrogen (H) and reactive products (RP) comprising acetylene fractions. RP is quenched with H and RP and H are separated. RP is conveyed to a catalytic liquefaction reactor (30) which is provided with NG and a catalyst such that RP and NG react to produce H and hydrocarbon liquid (HL). HL is conveyed to storage or transport.    DESCRIPTION OF DRAWING(S) - The figure shows the process diagram of conversion of natural gas to hydrocarbon liquid and water.    Combustion furnace (10)    Feed stream (14)    Burn stream (16)    Catalytic liquefaction reactor (30)    Electrical generator (50)