It's set in-between the first and second game. Not a bad idea, I don't want to see a "Baldur's Gate 3" since the story ended but a Baldur's Gate game that is tied in with the baalspawn saga, set in-between the games could work without it coming off as a cash-grab (which is so far what Beamdog has been for me, with their enhanced editions of two classics).
This is certainly their chance to show if they're capable of making a quality RPG without relying on the foundation of already existing games and it'll be built on the new upgraded Infinity Engine too right? That could only be a good thing. Who knows, maybe it'll kickstart a new series of Infinity engine games again.
Edit:
These are some images of the game:



Well it certainly looks like Baldur's Gate...