Is it normal to "extract a paper" from a master thesis? I have finished my master thesis and now a couple of colleagues who were involved (one of which was the supervisor) are interested in "extracting a paper" from it. We have already written one paper on a topic covered in the thesis, but in a bit more detail. I am worried that this would be considered self-plagiarism since I have already done the thesis and am only really summarizing one part of the thesis.
It is plagiarism only if you do not properly cite it.  

If you have not published the thesis itself, of course you can publish parts of it or summaries of it or even the whole thing unchanged.  The requirement to avoid "self plagiarism" is to cite.  For example, in the introduction write:


  This paper is taken from my thesis [title] done in [date] at [school] under the direction of [advisor].