The black liquor gasification based bio-fuel production at chemical pulp mill is an attractive option to replace conventional recovery boilers increasing system energy efficiency. The present paper studies circulating fluidized bed system with direct causticization using TiO2 for the gasification of the black liquor to the synthesis gas. The advantage of using direct causticization is the elimination of energy-intensive lime kiln which is an integral part of the conventional black liquor recovery system. The study evaluates the effects of gasifying medium i.e. oxygen or air, on the fluidized bed gasification system, the synthesis gas composition, and the downstream processes for the synthesis gas conversion to the synthetic natural gas (SNG). The results showed higher synthetic natural gas production potential with about 10% higher energy efficiency using oxygen blown gasification system than the air blown system. From the pulp mill integration perspective, the material and energy balance results in better integration of air blown system than the oxygen blown system, e.g. less steam required to be generated in the power boiler, less electricity import, and less additional biomass requirement. However, the air blown system still requires a significant amount of energy in terms of the synthesis gas handling and gas upgrading using the nitrogen rejection system.