Periodic infinite plane wave slab calculations were performed, in conjunction with density functional theory and ultrasoft pseudopotentials to study the adsorption of CHx (x = 1, 2, 3) species on the Ni(lll) surface. The potential energy diagram is presented for the overall reaction of surface carbon with dihydrogen to methane or, equivalently, the conversion of methane to surface carbon, including all adsorbed intermediates and transition states. All CH, intermediates prefer threefold sites. The transition states involve the formation of C-H bonds on top of a Ni atom, with the reaction coordinate being primarily a C-H stretch. The calculated activation energies to form the C-H bond are near 70-85 kJ/mol for different CH, species. To illustrate the new possibilities offered by detailed potential energy diagrams, the results from the quantum chemical calculations are combined with experimental results in the literature to make initial estimates of kinetic parameters involved in the methanation of CO over nickel. Sensitivity analyses in this region of parameter space are used to assess the effects of these kinetic parameters on the overall rate of methanation. A good description of the experimental methanation reaction kinetics (D. W. Goodman et al., J. Catal. 63, 226 (1980)) is achieved by adjusting the sensitive kinetic parameters within reasonable ranges. The kinetic analyses shows that adsorbed CO and CH are the most abundant species on the surface, and the energies of the transition states to form methyl species from methylene species and to form methane from methyl species appear to control the rate of the overall reaction. (C) 2000 Academic Press.