Underground salt rock is considered as a perfect medium for underground oil and gas storage.[1] It is of perfect impermeability, low penetrability and well damnification self-concrescence. The underground gas storage in salt caverns has potentially high provision capability like a hermetic container. So it is especially adapt to be used as short-term adjustment gas storage. According to thermodynamics, transfer calorific, hydrodynamics and dynamics theory, this paper presents a dynamic mathematic model for simulating circle running thermodynamic performance of underground gas storage in salt caverns based on characteristics of gas flowing and heat transfer in the cavern and the well bore. Considered cavern, well bore and surrounding salty formation as one integral system and some operation limits such as temperature, pressure etc., the model can simulate and forecast circle running thermodynamic performance in underground gas storage in salt caverns, judge the hydrate form and analyze the influence of some correlative factors. At the same time, corresponding numeric simulation software is also developed. Therefore, the research results can be used to instruct design and layout of gas storage, comparison of different running projects and operation of gas storage. Furthermore, it provides a theory analysis base for ground system optimum design of gas storage and offers technology help for research on gas storage in salt caverns of China in the future.