A method of producing a fuel additive includes passing a feed stream comprising C4 hydrocarbons through a hydrogenation unit producing a hydrogenated stream; passing the hydrogenated stream through a distillation unit producing a first stream and a second stream; producing an isobutylene stream by passing the first stream through a molecular sieve unit; passing the isobutylene stream to a hydration unit as a feedstock for the fuel additive; and forming the fuel additive in the hydration unit.