| To install a gas water heater, the building must be equipped  with a gas supply, a flue connection to vent out carbon monoxide and a cold  water supply. To begin, you'll need to shut down the water, power, and gas  supply valve (if you're replacing an older, less-efficient gas heater). Drain  the tank of water and use pipe wrenches to disconnect the gas line, then the  water lines. Unscrew the gas exhaust vent from the top of the flue and remove  the old water heater.  Put the new water heater in place, turning it so the burner  and the controls are easily accessible. Make sure it is level by placing a  level against the side of the heater. With Teflon tape, wrap the fittings for  the cold water inlet and the hot water outlet, connect the fittings into the  outlets, and tighten. Then, use flexible copper pipe to make the new water line  connections. To connect the gas supply, use galvanized pipe with piping  compound brushed on the threads to make the new connections.    
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