CORRECTED - U.S. official says EU needs no "gas pipeline war"

(Corrects name of U.S. official in para 2 to Dan Fried from Dan Brown.)

BUDAPEST, Feb 28 (Reuters) - Gazprom's (GAZP.MM: Quote, Profile, Research) South Stream gas pipeline project should not torpedo the European Union's (EU) plans to build the cheaper Nabucco pipeline so as to cut reliance on Russian gas, a top U.S. official said on Thursday.

Assistant Secretary of State for European Affairs Dan Fried said in an article published in Hungarian daily Nepszabadsag that South Stream was aimed at crushing competition.

"The U.S. view is that we don't want a 'gas pipeline war' (in Europe)", he said.

"Only Nabucco will promote conditions needed for competition, protect Hungary and other EU states against supply disruptions and increase transparency in the energy sector."

Hungary said early this week that it would join a rival of Nabucco, the 10 billion euro ($15.10 billion) South Stream project, which would be a second pipeline to supply Hungary with Russian gas.

Hungarian Prime Minister Ferenc Gyurcsany is expected to officially sign up to South Stream in Moscow on Thursday.

His government, which has built friendly ties with both the U.S. and Russia, has said it remained committed to Nabucco but it expected rising energy demand in Hungary and Europe to support both projects. (Reporting by Sandor Peto; Editing by Ben Tan)