The distributed optical fiber sensing system based on Mach-Zehnder interference principle has the ability of warning the potential sabotage acts to oil and gas pipelines, and the distributed location technology is one of the key technologies. Based on the correlation theory, the location theory has been studied, the experimental system based on virtual instrument platform has been established; Several experiments has been carried out at eight different locations across 20 km sensing fiber, the results show that the positioning error could be controlled within 149 m,which can meet the practical positioning needs.