The Azores archipelago is located in a complex geological setting dominated by the American, African and Eurasian
plates boundaries interplay. Terceira island lies in the central part of the so-called Terceira Rift, a north /west and
south/east structural line that extends from the Mid-Atlantic Ridge into the east/west Azores-Gibraltar Fault.
http://www.hasslberger.com/terceira/pages/volcanoes-terceira.html

http://www.earthzine.org/2011/04/12/geological-hazards-and-monitoring-at-the-azores-portugal/

The main tectonic features that dominate the Azores region are the Mid-Atlantic Ridge (MAR), which crosses the archipelago between the islands of Faial and Flores with a general N-S direction, and the Azores-Gibraltar Fracture Zone that constitutes the Eurasian-Nubian plate boundary and extends from the MAR to the region of Gibraltar. This boundary includes the Terceira Rift (TR) and the Gloria Fault (GF). The Terceira Rift is a complex structure trending NW-SE extending from the MAR to the Gloria Fault along a line defined by Graciosa, Terceira and São Miguel islands and by several submarine banks and basins, including, in a broad sense, the WNW-ESE fracture systems of Faial, Pico and São Jorge islands. Impressive submarine and subaerial volcanic rift zones and central volcanoes extend along the MAR and the TR.

A submarine volcano lies apprx.10 km NW of Terceira is now just 200 m below the surface of the sea..
Previously it is suggested it was 700 m below the surface.
This volcano is far out in the Atlantic Ocean in the Azores Islands group, and it has during the past few months (2000)
shown signs of new life. Floating pumice, degassing and smoking have been a normal sight recently.
Several pictures have been taken by submarine cameras

April 30th, 2000
News to day reports continously activity, but it is still 200 m below sealevel, but now distance from nearest
island is given as just 5 kilometers. Could it be that there are more than one volcano there?
(SWVRC)

March 27th, 2000
The eruption that began late 1998 is still going on, with unregular sights of gases and volcanic debris. The latter is
flowing up as pumice. (See the picture below).

Photos Courtesy of Civil Protection of the Azores.

The submarine eruption that started on December 1998 from multiple vents along the Serreta Volcanic Ridge,
about 10 km W of Terceira Island, Azores, continued through March 2000. Vents along the ridge were very active
between December 1998 and September 1999. Activity then declined to very low levels with rare surface manifestations
through December 1999. Activity increased again in late January 2000.

In April 1999, a volcanic plume just above an active eruptive center at about 380 m depth was discovered.
This plume was formed by volcanic particles of ash and lapilli size along with gas bubbles and lava balloons
up to 2 m in diameter.

A floating lava block from Serreta (Terceira), 80 cm maximum diameter, collected on 10 February 1999. Such blocks have been termed a "lava balloons." Courtesy of the Center of Volcanology of the Azores University (CVUA).

A sub-spherical floating block (a "lava balloon") from the Serreta eruption collected on an undisclosed day. Taken from Radiotelevisão Portuguesa (April 1999); URL: <http://www.rtp.pt>.

March, 1999
During February and March 1999 the submarine eruption that began late 1998 continued at the Serreta volcanic ridge,
~9-14 km W of Terceira island (BGVN 23:01; Luis and others, 1999). The activity decreased slightly until the end of
February, but eruptive areas clearly defined two main volcanic trends in both NE-SW and NW-SE directions .
In March, activity became less vigorous and observers saw sea surface manifestations only during intermittent short periods.

January 1999
A small seismic crisis during November 1998 was monitored by the Azores Seismological Surveillance System (SIVISA).
It was centered W of Terceira Island on the E of the so-called Graciosa Trough [38.783°N, 27.483°W; submarine vent
at -500 m]. After four days of major activity seismicity decreased and remained at normal levels until 18 December;
then, a few microseisms were registered by SIVISA and white vapor columns were reported by fishermen to be rising
from the sea 8 km W of Terceira island. These phenomena were discontinuous but persisted until the night of
23 December when local residents observed orange lights several miles W of Terceira.

View of the eruption site as photographed by João Gaspar from a helicopter during an overflight on 8 January 1999. Courtesy of CVUA.

Although no unusual seismicity was noticed in the following interval, on 8 January fishermen again reported white vapor
columns on the sea. Scientists from the Center of Volcanology of Azores University (CVUA) using a helicopter of the Portuguese Air Force took the first pictures of the phenomenon (figure 1). Lava blocks reaching a maximum of 3 m
in length rose gently to the surface where they floated for a few minutes. White steam columns resulting from contact
between hot lava blocks and seawater were observed, rising about 10 m above the surface of the sea.
During the night the same activity was observed from the W coast of Terceira island and six different areas
of incandescent, dispersed lava blocks were identified along a NE-SW axis. Activity continued at the same
level until 13 January after which only intermittent short-period events were observed.
(This is just what happened outside the island of El Hierro, Canary Islands, late 2011 and first part of 2012.)