Blend all the ingredients for the curry paste to a smooth paste by adding required quantity of water. Store in an air-tight container to be used later.
Heat oil in a pan and add the panang paste. Cover and cook on a medium flame for 2 minutes.
Add the chicken and mix well. Cover and cook for 2-3 minutes.
Then add 1/2 cup water, salt, chilies and kaffir lime leaves.
Mix everything well and simmer, covered till the oil starts to float on the surface and the chicken is almost tender.
Add 1 cup coconut milk and simmer, uncovered on a medium flame for 2-3 minutes.
Serve with plain steamed rice.
