There are several methods liked by members here, but mine is pre turbo at the "Y". Also drill the diameter you need for pipe thread dia. But do not penetrate. Then slowly increase the bit size till you got at the proper dia. Keeping bit cool and dry vacuuming a lot during drilling the penetration. Tap with dry tap using vacuum technique as well.
On edit, make sure you have 1/8" NPT and not 1/8" BPPT (British Paralell Pipe thread) like mine was. It's a good thing I did a test thread in a block of aluminum.