The joint venture, India Gas Solutions, will also develop infrastructure for transporting and marketing natural gas in the country, and pursue other opportunities including import of liquefied natural gas (LNG).
All existing supply contracts to customers of gas from the KG D6 block, off India's east coast, will also be taken over by the joint venture, the statement said.
The two firms had announced plans for the joint venture in February, when BP acquired a 30 percent stake in 23 oil and gas blocks owned by Reliance, in a $7.2 billion deal.
"Demand for gas has been growing at an exponential rate and we anticipate natural gas to emerge as the preferred choice of fuel..," Reliance's executive director P.M.S. Prasad said in the statement.
Reliance, India's largest listed company, has seen its growth outlook marred by falling gas output from its huge KG D6 gas fields and its market value has plunged by nearly a quarter this year.
Earlier this month, India's upstream regulator said Reliance was producing 42 mscmd (million standard cubic meters per day) from its main D6 block, much lower than the 60 mscmd it was producing a year earlier and far off the planned peak capacity of 80 mscmd.
On Friday, the two companies said the new joint venture will start operations with 30 employees seconded from both firms, and its board will comprise six members with equal representation for both Reliance and BP.
Earlier this year, BP's India head Sashi Mukundan told Reuters the joint venture could build an LNG terminal and pipelines if it did not find capacity at India's existing facilities.
Prior to the announcement, Reliance shares had closed 0.2 percent lower in a weak Mumbai market.
