Partial upgrading of viscous heavy oil, such as bitumen extracted from Canadian oil sands, to meet the specifications of pipeline transportation is highly desired. Conventionally, this is achieved by catalytic hydrotreating under a hydrogen pressure of 15-20 MPa, which consumes naturally unavailable hydrogen. Recently a novel methanotreating technology using methane, the principal component of natural gas, as the hydrogen donor has been explored over metal modified zeolites to catalyze the upgrading process. In the present work, the formula of the catalyst was optimized in terms of the species of metal cations, morphology of the support materials and acidity of the support. The catalytic performance was evaluated by comparing the viscosity and coke formation as well as compatibility of the product oil upon methanotreating. When a silver and gallium cation modified ZSM-5 with a silica to alumina ratio of 30:1 was used to catalyze the upgrading of heavy oil at 380 degrees C and 5 MPa, the viscosity of heavy oil was reduced to 278 mPa.s at 25 degrees C with an acceptable coke yield of 0.8 wt.% and without compromising the compatibility of the resulting oil product, which were desirable for pipeline transportation and downstream refining. This study demonstrates the feasibility of upgrading heavy oil with natural gas at fairly mild operation conditions instead of expensive hydrogen at rather stringent ones. (C) 2016 Elsevier B.V. All rights reserved.