I'd say 3 mm OD pipe is about right for that engine (which looks great BTW).
You might consider mating bronze flanges at each end of the pipe, with 3 or 4 screws securing them. They are easy lathe turning and drilling and can be designed with a groove to hold a small o-ring for sealing. A gasket can also be used between the flanges. If you use a short length of pipe out of the boiler with a flange soldered on it, and same out of the engine, the pipe between just needs the flanges soldered on aligned so the screws line up. Extreme accuracy is not needed usually as the pipe can be tweaked a bit to rotate the flanges a few degrees to align them if need be. Such flanges are used on full size steam plants almost exclusively, in sizes above 2" dia pipe.
For fastening, if you use bolts and nuts or studs and two nuts no tapping is required and lineup/assy is simpler.
Be sure to drill the holes accurately so that any flange fits the pattern on any other and no matching is needed.
Link below is to a video showing some model flanged pipe work and some good ideas on simple ways to make them.