A comparative analysis suggests that conversion of natural gas primarily to diesel fuel is more attractive thermodynamically and economically in terms of transport to a market than the construction of a pipeline, liquefaction, the production of electricity by combustion and expansion through a turbine, or conversion of the natural gas to methanol or gasoline. The process consists of the conversion of methane and steam to H2 and CO by means of an ion-transport membrane, their reaction by the Fischer-Tropsch process to produce a mixture of long-chain hydrocarbons (paraffinic wax), which is then converted to shorter and branched chains by hydrocracking. The effluent is separated into fuel gas, naphtha, kerosene, diesel fuel, and heavy oil by steam-distillation. The heavy-oil fraction is recycled to the hydrocracker. Some of the high-pressure steam, which is a byproduct of the Fischer-Tropsch process, is recycled to the ion-membrane reactor and the excess is used to generate electricity. The diesel fuel, which is the primary product, is of premium grade and can be used for blending with poorer grades because of the absence of sulfur and aromatics. The unique characteristic of this process is the use of the ion-transport membrane for the production of syngas by partial oxidation, thereby avoiding the need for cryogenic separation of O2 from air, and is superior to steam reforming or dry reforming in that it produces the optimal 2/1 ratio of H2 and CO for the Fischer-Tropsch reaction. The overall process results in a lesser loss of exergy than the alternatives and is appears to be attractive economically.