NOVELTY - Microchannel apparatus (100) comprises a conduit including mixing, reaction, heat transfer and separation section. The microchannel mixing section includes direct injection inlets. The separation and mixing section both are downstream from the reaction section. The reaction section includes a catalyst supporting an oxidative coupling of methane reaction. The separation section is adapted to carry out at least one of phase separation, adsorption, absorption, distillation, or membrane separation. Each section includes microchannels (106, 128, 130).    USE - For oxidative coupling of methane for converting natural gas streams or other methane-containing streams into higher molecular weight hydrocarbon products including ethylene, ethane, acetylene, propane, propylene, higher hydrocarbons (such as butane and C4+n, where n is any integer), acetic acid, and oxygenates. Also produces less desired products, such as carbon monoxide and carbon dioxide, amine, oxygen or sulfur having at least a portion in a gaseous state (claimed).    ADVANTAGE - The apparatus recovers higher fraction of methane i.e. greater than 90 (preferably 92, 95, 97 or 99)%; has increased absorption capacity, thus improves the ease of efficiently capturing more of the methane in a one-pass system. The counterflow absorption system enables multiple stages for separation, thus the apparatus reduces the requirement of the ionic liquid.    DETAILED DESCRIPTION - Microchannel apparatus (100) comprises a conduit including mixing, reaction, heat transfer and separation section. The microchannel mixing section includes direct injection inlets. The separation and mixing section both are downstream from the reaction section. The reaction section includes a catalyst supporting an oxidative coupling of methane reaction. The separation section is adapted to carry out at least one of phase separation, adsorption, absorption, distillation, or membrane separation. The apparatus also comprises a second microchannel reaction section downstream from the microchannel reaction section, where the separation section interposes the microchannel reaction section and the second microchannel reaction section. The conduit and the separation section are integrated within a single device. INDEPENDENT CLAIMS are included for the following:    (1) method of operating the microchannel apparatus involving directing first reactants into communication with a first reaction microchannel; reacting at least a portion of the first reactants with second reactants to form first products, reaction output of the first reaction microchannel comprising first reactants, second reactants and first products, where the first reactants within the output have a first downstream reaction concentration; separating at least a portion of the first products from the reaction output within a separation section, where the first reactants within the separation output have a separation concentration higher than the first downstream reaction concentration; and reacting at least a portion of the first reactants of the separation output within a second reaction microchannel to form additional first products. The step of separating some of the second products from the first products using a separation medium. The first reactants comprises hydrocarbon (preferably methane) molecules. The second reactants comprises at least one of diatomic oxygen and molecules including oxygen. The first separation includes utilization of an ionic liquid; and    (2) method of carrying out an oxidative coupling of methane reaction within the microchannel apparatus involving mixing a methane-laden stream with an oxygen source stream, reacting at least a portion of methane within the methane-laden stream in the presence of a catalyst to form hydrocarbons greater than 4C, separating at least a portion of the hydrocarbons greater than 4C while the hydrocarbons flow through microchannels; or reacting reactants in the presence of a catalyst within a microchannel to form products comprising at least one of ethane, ethylene, acetylene, propane, propylene, and hydrocarbons greater than 4C, where the contacting of the reactants with a catalyst is carried out for 0.1-100 milliseconds.    DESCRIPTION OF DRAWING(S) - The figure shows a schematic view of microchannel chemical process.    Microchannel apparatus (100)    Feed process channels (102, 104)    Reaction product process channels (106, 128, 130)