The present work is motivated by the engineering need to simulate the multiphase flows in the course of the start-up of a long-distance crude oil pipeline. We propose a model for compressible multiphase flows with heat and mass transfer and diffusion processes in elastic pipelines. The model is derived with two approaches, i.e., (a) the spatial averaging procedure of a single phase model and (b) the Arbitrary Lagrangian Eulerian (ALE) formulation of the Baer-Nunziato model with quasi-1D approximation. The diffusion processes include the viscous dissipation, wall friction, heat conduction, and heat exchange with external environment. In particular, the wall friction consists of steady friction term calculated by Darcy-Weisbach formula, and the unsteady friction determined by the instantaneous-acceleration-based (IAB) model. The unsteady friction modifies the characteristic structure of the hyperbolic part of the model. For the solution of the hyperbolic part, we propose a three-wave approximate Riemann solver incorporating the unsteady friction term. Mass and heat transfer are realized via instantaneous relaxations of the chemical potential and temperature, respectively. Efficient iterative relaxation procedures for N-phase flows have been proposed. We have validated the proposed model and numerical methods against some benchmark multiphase problems and applied the model to calculate the start-up of a realistic liquid pipeline with intermediate pump station boundary condition. •The derivation of the quasi-1D BN-type model with diffusion physics and its reduction.•The development of a HLLC Riemann solver taking into consideration the unsteady wall friction term.•Efficient pressure and temperature relaxation methods for N-phases.•The application in simulating realistic pipe-startup problem.