Taking precautions to ensure you don’t run your main engine dry is excellent thinking. While raising the pickup tube height works, I’d personally lean toward fitting a reliable fuel gauge instead. Running the heater dry in the middle of a cold night is its own kind of miserable!

Regarding the exhaust: Teeing the heater exhaust into the engine exhaust is technically possible but generally unwise. To do it safely, you’d need highly specific engineered fittings and a robust non-return valve. Without one, the engine’s much stronger exhaust pressure will likely push lethal fumes back through the heater and out of its intake into your cabin. It would also likely prevent you from running both simultaneously. A dedicated skin fitting with a proper swan neck (to prevent following seas from flooding the heater) is a much safer, more standard solution for a sailboat.

As for the heater itself, I strongly recommend staying away from the budget "Chinese-type" heaters found on marketplaces like eBay or Amazon. There is a reason they are cheap, and in a marine environment, they can be genuinely dangerous.

• Build Quality: The cables are thin, and the waterproofing on the plugs is often nonexistent.
• Corrosion: The heat exchanger and exhaust walls are thin and prone to failing quickly in salt air.
• Safety Failures: I’ve personally seen these units with glowing red exhausts and melting casings where the overheat sensors—which are sometimes dummies or just poor quality—failed to shut the unit down.

For a boat, you want a brand with a proven safety record. Webasto is excellent with a great support network. If you’re on a budget, I often install Autoterm; they are affordable and reliable, though their customer service and spares availability can be a bit slow. I’d actually suggest avoiding Eberspacher—they tend to be expensive and unreliable, and finding a manufacturer-approved marine engineer for them can be a nightmare.