Close but no cigar.

Code requires a full bore shutoff valve (ball valve or gate valve)on the cold water supply line.

Code prohibits installing CPVC or PEX within 6" of a gas water heater flue pipe. Typically the water line connections on a water heater are only 4" on either side of the flue so it becomes necessary to install a short section of metal pipe from the water heater vessel to the PEX or CPVC. You may then use galvanized iron pipe, brass pipe or copper pipe to make the transition connection.

Code prohibits directly coupling copper to ferrous metal (Galvanized iron pipe or a steel water heater vessel).

Code also requires a union on both the Hot & Cold water lines within 12" of the water heater vessel.

Under the International Residential Code if the water lines enter and leave the water heater location horizontally at an elevation less than 12" above the top of the water heater vessel you are also required to install "Heat Trap Nipples" or a "Heat Loop". A heat loop is an inverted U section of pipe that rises above the line bends over and back down to the line. (Where required you can usually find a preformed copper U heat loop in the hardware or home supply stores.).

When connecting to PEX or CPVC the easiest and often the cheapest solution is to use an 18" copper flex connector. You begin by installing the heat trap nipples or dielectric nipples (dielectric nipples now come prepacked with most water heaters). Connect the copper flex connector to the nipple and run it vertically then bend it 180deg down and turn and turn it 90deg horizontal where you connect it to the PEX or CPVC. This flex connection will then meet the requirement to keep the PVC or PEX away from the flue, provides the required heat loop and is accepted as a union function.

Under the Uniform Plumbing Code you are not required the heat loop but both the Hot & Cold water lines must be insulated within 5 feet of the tank with a minimum or R-4 insulation.

The heat trap nipples came with our hot water heater but no instructions as to which end goes up? Also, do they both face the same way or does the hot water heat trap go one way and the cold water heat trap the other?