The exergy analysis of a direct method for the conversion of natural gas to methanol is reported in this work. The study is part of a process development effort to identify areas of improvement to the technology of direct conversion of natural gas to methanol. Prior to the exergy analysis, different configurations of the direct conversion process were developed and simulated. Two heat-integrated configurations designated as Case I and Case II were considered plausible. The exergy efficiency, excluding exergy of the rejected heat, of Case I and Case II were determined as 33% and 36%, respectively. The 9% increase in efficiency of Case II relative to Case I did not justify the installation of an expander and was therefore screened out. Exergy balance in Case I showed that a total of 56% of the exergy input was lost to internal consumption. The majority of exergy destruction was found to be due to the methanol synthesis reactor (36.0%), heat exchangers (30.1%) and combustion (25.0%). Further analyses of the losses across all heat exchangers indicated a nonlinear relationship between exergy destruction contribution and minimum approach temperature (ΔTmin), with a minimal at ΔTmin of 10 °C. The methanol product was determined to represent 18% of exergy input, excluding the air separation unit. The overall process efficiencies were found to be 18% (LHV) and 24% (LHV) for recycle split fractions of 90% and 98%, respectively. The results of this work would provide further insight into the exergy viability of the technology of direct conversion of natural gas to methanol.