NorthernLights
REGISTERED
First time poster, I have been looking around for help and found this. If this is the wrong post for this forum, please let me know and I apologize in advance. If there is a better place to ask for advice on this topic also feel free to redirect me 
House is ~15 years old located in southwestern Ontario Canada. The basement walls have had a half blanket insulation on the top half of the basement walls for all of that time, floor joists are on sill plates with poured concrete basement walls.
I am wanting to finish the walls in the basement. The plan was rigid foam board on the concrete sealed up nicely, simple wood frame with batt and drywall. Basically following section 6.2.4 at this link and using this product.
The problem I have run into is in one corner where the walls meet there is an HVAC pipe that runs to the upper floors. This gives me only 1.5 inches clearance from the concrete wall to the HVAC which would just fit the foam board. I have assumed that I can't have foam board insulation touching the HVAC that carries hot and cold air, I assume that is not to fire code. So my question is: what is the correct way to deal with this? I have been reading this part of the Ontario Building Code and it appears section 3 is relevant to my situation but I was wondering if anyone had real world experience to share.
My plan was to cut out the rigid insulation, frame around the HVAC and insulate it like the blanket has been for the last 15 years. So working from the wall out it would be: concrete wall interior -> batt insulation -> vapour barrier -> frame around HVAC -> drywall around the frame.
Is this a legit solution or is there an easier way to do this without the frame?
thank you for your time and experience,
-nl

House is ~15 years old located in southwestern Ontario Canada. The basement walls have had a half blanket insulation on the top half of the basement walls for all of that time, floor joists are on sill plates with poured concrete basement walls.
I am wanting to finish the walls in the basement. The plan was rigid foam board on the concrete sealed up nicely, simple wood frame with batt and drywall. Basically following section 6.2.4 at this link and using this product.
The problem I have run into is in one corner where the walls meet there is an HVAC pipe that runs to the upper floors. This gives me only 1.5 inches clearance from the concrete wall to the HVAC which would just fit the foam board. I have assumed that I can't have foam board insulation touching the HVAC that carries hot and cold air, I assume that is not to fire code. So my question is: what is the correct way to deal with this? I have been reading this part of the Ontario Building Code and it appears section 3 is relevant to my situation but I was wondering if anyone had real world experience to share.
My plan was to cut out the rigid insulation, frame around the HVAC and insulate it like the blanket has been for the last 15 years. So working from the wall out it would be: concrete wall interior -> batt insulation -> vapour barrier -> frame around HVAC -> drywall around the frame.
Is this a legit solution or is there an easier way to do this without the frame?
thank you for your time and experience,
-nl