In conventional heterodyne phase-sensitive optical time domain reflectometry (Φ-OTDR), the optical path difference (OPD) between sensing and reference arms deteriorates the signal-to-noise ratio (SNR). We counteract this effect by introducing a loop path in reference arm. This facilitates the use of laser source with low coherence length. Compared with an ordinary Φ-OTDR system, SNR increased from ~1 dB to 5 dB. Regardless of OPD compensation features, the probability to getting a better output increases by generation of multiple reference beams (and consequently multiple beat signals), as compared to conventional systems. The method is cost efficient and suitable for practical purposes.