Crush the peanuts till fine in a food processor.
Chop the spice paste ingredients corasly and blend in a food processor till very fine. Add a few tbsp water to help blending.
In saucepan heat the oil on medium and add spice paste. Add two of the strips of lemon grass. Fry until aromatic and smell spicy.
Add ground peanuts, water, tamarind, salt, palm sugar, coriander powder and sweet soy sauce. Stir to combine well.
Reduce the peanut sauce on medium-low heat, stir continuously for 5-10 minutes or until the peanut sauce thickens to your desired consistency, or until the oil and the peanut sauce separates.
Let cool to room temperature and serve with satay chicken.