To place an Oxygen Pipe, simply point at a solid surface, or a suitable machine or another pipe of same kind and right-click. The pipes will self-connect if placed next to another pipes or a suitable machine.
No tool is required to break pipes.
Dyed Oxygen Pipe
It is possible to dye oxygen pipes just by applying dyes directly on them. Simply right-click on a pipe with the desired color of dye on your hand. One piece of dye will be used for each piece of pipe to be dyed. Since pipes of different colors will not interconnect, this method can be used to keep the pipes apart and separate supply systems when there is not enough space.
Breaking a dyed oxygen pipe will drop the pipe itself with no color and the dye.
Note: the recipe output was 4 Oxygen Pipe prior to Galacticraft 184.108.40.2060.