Water Heaters - Questions - Replacing Thermostat in Gas Water Heater

I am replacing the thermostat on a gas water heater. Can someone explain to me how to approach the small piece of pipe that is circled in the image below?

Essentially, I am wondering how to tighten this piece into both the gas supply line, and the thermostat, simultaneously, with the supply line and thermostat already in place.

Is it a matter of screwing the pipe further than necessary into the supply line, and then backing it out, while simultaneously threading it into the thermostat? I hope I explained that correctly...

Or is there a better approach? It seems like backing a pipe out will make the plumbers putty that will be on the pipe ineffective.

Thoughts?

http://farm4.static.flickr.com/3473/3399989614_9d72a782b9_o.jpg

Up higher on the pipe drop should be a union that allows you to split the pipe and dissasemble, and then after reinstalling gas valve work back torwards it as your are reassembling the piping.

If you cant isolate the gas shutoff or have no union, your work is cut out for ya

why are you replacing the gas valve? did you get the whole kit?

this is a sealed combustion chamber and the seal is not supposed to be reused not that any i have replaced came off without tearing anyway