Run subprocess and print output to logging

You could try to pass the pipe directly without buffering the whole subprocess output in memory:

from subprocess import Popen, PIPE, STDOUT

process = Popen(command_line_args, stdout=PIPE, stderr=STDOUT)
with process.stdout:
    log_subprocess_output(process.stdout)
exitcode = process.wait() # 0 means success

where log_subprocess_output() could look like:

def log_subprocess_output(pipe):
    for line in iter(pipe.readline, b''): # b'\n'-separated lines
        logging.info('got line from subprocess: %r', line)

I am sure that there is the way to do it without creating temporary file to store process output

You simply have to check for the documentation of Popen, in particular about stdout and stderr:

stdin, stdout and stderr specify the executed program’s standard input, standard output and standard error file handles, respectively. Valid values are PIPE, an existing file descriptor (a positive integer), an existing file object, and None. PIPE indicates that a new pipe to the child should be created. With the default settings of None, no redirection will occur; the child’s file handles will be inherited from the parent. Additionally, stderr can be STDOUT, which indicates that the stderr data from the child process should be captured into the same file handle as for stdout.

So you can see that you can either use a file object, or the PIPE value. This allows you to use the communicate() method to retrieve the output:

from StringIO import StringIO
process = subprocess.Popen(arguments, stdout=subprocess.PIPE, stderr=subprocess.STDOUT)
output, error = process.communicate()
log_subprocess_output(StringIO(output))

I'd rewrite your code as:

import shlex
import logging
import subprocess
from StringIO import StringIO

def run_shell_command(command_line):
    command_line_args = shlex.split(command_line)

    logging.info('Subprocess: "' + command_line + '"')

    try:
        command_line_process = subprocess.Popen(
            command_line_args,
            stdout=subprocess.PIPE,
            stderr=subprocess.STDOUT,
        )

        process_output, _ =  command_line_process.communicate()

        # process_output is now a string, not a file,
        # you may want to do:
        # process_output = StringIO(process_output)
        log_subprocess_output(process_output)
    except (OSError, CalledProcessError) as exception:
        logging.info('Exception occured: ' + str(exception))
        logging.info('Subprocess failed')
        return False
    else:
        # no exception was raised
        logging.info('Subprocess finished')

    return True