If you are installing a gas-fired boiler in place of the oil-burner, FORGET about a standalone hot water heater, and use an indirect-fired HW heater running as a zone off the boiler instead. It'll supply far more hot water at much higher efficiency and usually last longer than any standalone tank (except possibly a condensing tank hot water heater, at more than 2x the cost of an indirect.)
Under no circumstances should you vent a sub-50,000 BTU hot water heater into a chimney unless you run the appropriate sized liner all the way to the top. [edited to add] Venting hot water heaters into oversized flues results in condensation in the flue and erosion & failure of the flue liner. With atmospheric drafted units there's a real risk of backdrafting too, but not with a power-vent.





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