Synthetic natural gas (SNG) based on biomass is a secondary energy carrier with a lot of advantages. The methane synthesis reaction conditions are mild and the process is uncomplex. The whole natural gas infrastructure can be used for storage, distribution and application. In addition, methane is much easier to handle than hydrogen. In the SNG process synthesis gas will be converted to mainly methane and after a processing unit it could be fed into the natural gas grid. Air gasification technology is state-of-the-art and a low cost gasification technology. The synthesis gas out of an air gasifier is highly diluted with nitrogen and thus just used for combined heat and power production (CHP). The current SNG concepts need synthesis gas from a much more complex gasification with oxygen or steam. Because no literature could be found which analyzes the effect of nitrogen in the methanation unit, this paper will show first results in this field. Synthesis gas with different nitrogen content was tested in a fixed bed methanation reactor at different temperature levels, using a commercial 20 wt.% Nickel catalyst. The nitrogen content has the positive effect to limit the temperature increase by the strong exothermic reaction. Full carbon monoxide conversion and high methane selectivity was observed. It can be shown, that the methane selectivity is independent up to 50 Vol.% of nitrogen in the feed gas. An occurred side reaction is the ammonia production. The highest ammonia concentration, 614 ppm, was observed at the lowest nitrogen content. The same experiment shows the highest methane selectivity of 90% and methane content of 30 Vol.%. With increasing dilution, the ammonia formation falls off. The shown influence of nitrogen on the methanation reaction should point out the chances and risks for methanation of a diluted synthesis gas derived from biomass gasification, especially in small sizes, like decentralized air-gasification plants. (C) 2014 Elsevier Ltd. All rights reserved.