A carbonaceous fuel gasification system for all-steam gasification with carbon capture includes a micronized char preparation system comprising a devolatilizer that receives solid carbonaceous fuel, hydrogen, oxygen, and fluidizing steam and produces micronized char, steam, volatiles, hydrogen, and volatiles at outlets. An indirect gasifier includes a vessel comprising a gasification chamber that receives the micronized char, a conveying fluid, and steam. The gasification chamber produces syngas, ash, and steam at one or more outlets. A combustion chamber receives a mixture of hydrogen and oxidant and burns the mixture of hydrogen and oxidant to provide heat for gasification and for heating incoming flows, thereby generating steam and nitrogen. The heat for gasification is transferred from the combustion chamber to the gasification chamber by circulating refractory sand. The system of the present teaching produces nitrogen free high hydrogen syngas for applications such as IGCC with CCS, CTL, and Polygeneration plants.