When you look at the documentation for the pipeline model from the hydraulic domain, you will find the following: <http://www.mathworks.de/de/help/physmod/hydro/ref/segmentedpipeline.html>
Hydraulic pipelines, which are inherently distributed parameter elements, are represented with sets of identical, connected in series, lumped parameter segments. It is assumed that the larger the number of segments, the closer the lumped parameter model becomes to its distributed parameter counterpart.
It will be the same way with thermal liquid elements, but how could you determine the right n? At a certain point your model gets quite lame...