A novel liquefaction and distillation process has been proposed and designed for the typical oxygen-bearing coal-bed methane (CBM), in which the impurities of the oxygen and nitrogen components are removed in the distillation column. The flammability limit theory combining with HYSYS simulation results are employed to analyze and calculate the flammability limits and the results indicate that no flammability hazard exists in the stages of compression, liquefaction and throttling. However, flammability hazard exists at the top the distillation column because the methane mole fraction decreases to the value below the upper flammability limit (UFL). The safety measures of initially removing oxygen content from the feed gas combining with the control of the bottom flowrate (flowrate of the liquid product at column bottom) are proposed to ensure the operation safety of the liquefaction process. The results reveal that the operation safety of the whole process can be guaranteed, together with high methane recovery rate and high purity of the liquid product. The applicability of the liquefaction process has also been analyzed in this paper. The simulation results can offer references for the separation of oxygen from CBM, the analysis of flammability limits and the safety measures for the whole process. (C) 2011 Elsevier Ltd. All rights reserved.