I had to replace my Hot Water Heater and chose a unit that was a bit larger than the old unit. Because there was a difference in height between the old and new, I had to "punch" a new hole into my chimney for the exhaust. The old set-up had my furnace exhaust and water heater exhaust connected to a "Y" and then into the chimney. This "Y" connection is connected to a flexible, accordion style, pipe that runs up through the middle of the chimney.

My question is: Do I need to cut a hole into the flexible pipe running up the chimney, and run the new exhaust pipe for the hot water tank into it? Or can I just place the new exhaust pipe into the chimney and seal it? There is space in the chimney, around the flexible, for the fumes to exhaust.

The chimney was lined for a reason. You need to connect to the liner directly.

Dave, the reason for the according type vent in the chimney(should be double wall) is to keep the discharge gases hot to lift the gases up and outside, these gases are heavier then air and will drop if not kept hot. A brick chimney is a very poor vent because it takes a long time to get hot and a lot of heat to stay hot if the gases cool off due to the cold brick the gases will drop.The vent riser needs to be sized accordingly from the appliance to the point of termination(roof) I would suggest you do it to code to prevent an equipment and health hazard. Poor venting has killed a lot of people, I can't stress this enough. Mike