The present invention relates to a process for producing methanol (MeOH) and hydrogen (H.sub.2) from methane, comprising the steps: a) providing a gaseous feed stream comprising methane; b) reacting said gaseous feed stream with at least one halogen reactant (X.sub.2), under reaction conditions effective to produce an effluent stream comprising methyl halide (MeX), hydrogen halide (HX); c) separating from the effluent stream obtained in step b): (i) a methyl halide (MeX) stream, optionally comprising unreacted methane; and, (ii) a hydrogen halide (HX) stream; d) reacting the methyl halide (MeX) stream separated in step c) with a solid metal hydroxide (MOH.sub.(s)) under reaction conditions effective to produce metal halide (MX) and methanol (MeOH); and, e) decomposing by means of electrolysis said hydrogen halide (HX) stream separated in step c) under conditions effective to produce a gaseous hydrogen (H.sub.2) stream and a stream comprising halogen reactant (X.sub.2).