Hello. Based on NEC Article 450.23:
Indoor installations are permitted under the following conditions:
- In Type I or Type II buildings, in areas where all the following requirements are met:
- The transformer is rated 35,000 volts or less.
- No combustible materials are stored.
- A liquid containment area is provided.
- The installation complies with all the restrictions specified in the listing of the liquid.
- Informational Note: Such restrictions may include, but are not limited to, maximum tank pressure, use of a pressure relief valve, appropriate fuse types, and proper sizing of overcurrent protection.
- If an automatic fire extinguishing system and a liquid containment area are present, provided the transformer is rated 35,000 volts or less.
- If the installation complies with 450.26.
NEC Article 450.26: Oil-insulated transformers installed indoors must be installed in a vault constructed as specified in Part III of this article.
NEC Article 450.41: Vaults must be located where they can be ventilated to the outside air without using flues or ducts wherever practicable.
NEC Article 450.42: The walls and roofs of vaults must be constructed of materials with adequate structural strength and a minimum fire resistance of 3 hours. The floors of vaults in contact with the earth must be made of concrete at least 100 mm (4 inches) thick. If the vault is constructed with a vacant space or other stories below it, the floor must have adequate structural strength for the load imposed and a minimum fire resistance of 3 hours. For this section, studs and wallboard construction are not acceptable.
NEC Article 450.23 does not specify a particular distance; it directs us to consult the Factory Mutual Loss Prevention Data Sheet 5-4. This document includes Table 5 in Section 2.3: Separation for Exposure Protection of Main Building Walls. But to know the distances to the wals for an exterior or an interior transformer we need to know if the transformer is FM Global listed. Do you see that when add an oil transformer to inside a building?