Your first choice will work well. The two tanks can be side by side or on top of each other. It doesn't matter. This engine has a pump in the carburetor that will suck gasoline out of the first tank no matter where it is. As fuel is sucked out of the first tank it will then create a suction that will pull fuel out of the second tank. Do you know how long this engine will run on 100 oz of fuel? I think about 2 or 3 hours.