This months PCGamer has confirmation from Ritual Entertainment that Sin 2 is indeed in the piplines, the twist here beign that it will be available vias Valve's Steam conent delivery and game management system in smaller episodic parts, each offering roughly 6 hours of gameplay for about 20 dollars.

As you might have guessed, Sin 2 will use the Source engine, customised no doubt.

Source: Eurogamer