A woman from Taupo could face up to twelve years in prison in Bali after being arrested for allegedly taking drugs into Indonesia.

Myra William, 27, was arrested at Denpasar Airport on Wednesday, arriving from Melbourne.

Officials in Bali said they believed she was drunk, and was yelling and talking a lot when she was arrested.

Forensic tests on a pouch she is alleged to be carrying are said to have revealed just under half a gram of the drug methamphetamine.

Police say other tests revealed marijuana and ecstasy in her system, and they claim she's admitted drug use going back eight years.

William faces the prospect of being charged with drug possession, which could lead to a sentence of four to 12 years in prison and a fine of almost $830,000.