An improved process and apparatus for upgrading coal gas to methane is provided by a simple and efficient methanator comprising an open-ended enclosure submersed within a liquid bath and carrying a catalytic insert having increasing degrees of controlled reactivity which the said gas contacts as the gas travels through the enclosure. In the presence of the catalyst, heat is generated from the methanation reaction at a controlled rate and substantially dissipated by the liquid bath so that substantially all the gaseous reductants, CO and H.sub.2, are reacted to methane at a relatively low controlled temperature.