JUNEAU, Alaska (AP) — Gov. Bill Walker vetoed legislation Friday that sought to temporarily restrict participation of a state-sponsored corporation in an alternate gas pipeline project that he proposed.

The veto was expected, though Walker has had talks with House Speaker Mike Chenault and Senate President Kevin Meyer on whether there might be a way forward that would bring both sides a measure of comfort.

No agreement had been reached, Walker spokeswoman Grace Jang said Friday afternoon.

However, Walker, in a release, said the veto “in no way means the end of discussions with legislative leadership” on the issue.

Any veto override would require the support of 40 of the Legislature’s 60 members. Thirty-seven lawmakers voted to pass the bill, while 21 voted against; two House members were excused the day the vote was taken on that side last month.

Supporters of the bill, sponsored by Chenault, said Walker’s proposal cast uncertainty over Alaska LNG, the major liquefied natural gas project the state is currently pursuing with oil and gas companies, TransCanada Corp., and the state-sponsored Alaska Gasline Development Corp.

The bill sought to restrict AGDC from planning or taking steps to develop an alternate export or liquefied natural gas project until the state or one of the oil and gas companies pulls out of Alaska LNG, Alaska LNG enters its next phase, or July 1, 2017, whichever comes first. Walker, in his veto message, said the bill would unnecessarily limit the state’s ability to have a backup plan.

The veto came late in a day marked by hours of waiting for lawmakers to emerge to continue work on the state spending plans. The capital and operating budgets are among the biggest pieces still in play as the scheduled end of session looms.

Contentious issues, including proposed cuts to education and ferry system funding, remained as House and Senate negotiators were scheduled to meet late Friday to try to tie up the operating budget but that meeting was canceled.

The group Great Alaska Schools — which has opposed proposed cuts to school funding — held a small rally on the steps of the Capitol.

The day began with Walker revoking a proclamation he had issued calling the House and Senate into joint session to consider for confirmation his new Cabinet-level department heads and appointments to boards and commissions. The House and Senate balked at that and planned to meet Sunday instead.

Walker has said he was motivated to flex his constitutional authority to call a joint session after lawmakers canceled the original joint session, which had been scheduled for Friday. He said he was worried, too, about a February legal memo requested by the Senate president’s office on what happens if the Legislature doesn’t meet to take up appointments.

Chenault, R-Nikiski, said he had given Walker his word that confirmations would be taken up.

Walker said he had been put at sufficient ease to revoke the proclamation after meeting with Chenault and Meyer, R-Anchorage, early Friday. He called the revocation an important step toward a positive relationship with legislative leadership.