Multiple chemical processes rely on multistream heat exchangers (MHEXs) for heat integration, particularly at cryogenic temperatures. Owing to their geometric complexity, the detailed design of MHEXs is typically iterative: the exchanger geometric parameters are selected to match process specifications resulting from a flowsheet optimization step; then, the flowsheet is reoptimized with the predictions of the MHEX model, and these steps are repeated until a convergence criterion is met. This paper presents a novel framework that allows—for the first time, to our knowledge—for the simultaneous optimization of the process flowsheet and the detailed MHEX design. Focusing on spiral‐wound MHEXs, we develop an equation‐oriented exchanger model using industry‐accepted heat transfer and pressure drop correlations for single‐phase and multiphase streams. We embed this model in our previously developed pseudo‐transient equation‐oriented process simulation and optimization framework. We demonstrate our approach on an industrial case study, the PRICO® natural gas liquefaction process. © 2017 American Institute of Chemical Engineers AIChE J, 63: 3778–3789, 2017