The water soluble gas is another very important kind of unconventional natural gas resources with a wide distribution. The soluble gas contained in the big water body well connected to a gas reservoir bears potential influence on the gas reservoir and is likely to become the replenishment of gas source for the reservoir, however, the conventional material balance equation never considers this impact of water soluble gas. Thus, based on the Moore Conservation Law, a material balance equation is developed for condensate gas reservoirs that considers the water soluble gas, and according to the phase equilibrium principle, the improved PR equation of state is adopted to calculate the solubility of the multi-component natural gas in formation water. Through the comparison of the calculation results of the material balance equation with those of the water-bearing core test, the influence is further discussed of water soluble gas on a gas reservoir. The research results demonstrate that this newly formed material balance equation is reliable and the water soluble gas does influence the total reserves and deliverability of a gas reservoir, the influence degree of which is related to formation temperature, strata pressure, water body size, and the difference in components between water soluble gas and condensate gas. This study is of great value in providing reference for improving the development level of condensate gas reservoirs with a water body.