DCP Midstream announced it will build the 720-mile Sand Hills NGL Pipeline that will transport liquids from the Permian basin and Eagle Ford shale to Gulf Coast markets.

The pipeline will have an initial transportation capacity of 200,000 barrels per day (b/d) and can be increased to 350,000 b/d. The first phase of the three-phase project is scheduled to be completed in Q3 2012, timed to coincide with increased volumes out of the Eagle Ford. The second phase could come online by Q2 2013 to bring volumes from the Permian basin into the system.

“DCP will support Sand Hills with a significant commitment for capacity to ship DCP’s growing Permian and Eagle Ford NGL production,” Bill Waldheim, DCP’s northern business unit president, said in a news release. “As the largest NGL producer in the Permian and with a growing processing position in the Eagle Ford, DCP has a strategic imperative to provide an industry solution to the growing capacity bottlenecks and is pleased to join with other processors in supporting and making Sand Hills a reality.”